An annual dilemma

Christmas is coming, and that means it’s time to think about rates again, so I think it’s time I mentioned them on this blog. I’m not going to talk about what you ought to charge or how you ought to calculate your rates. There are plenty of blogs that do that much better than I could. Anyway, that’s all very well when you’re starting out. When you’re an established translator things are a little more complex than that. You want to increase your rates, of course, but you also have long-standing customers who you want to keep, and imposing a new “ideal” rate out of the blue is hardly the way to do that.

In the (still short) tradition of Only Human Translators, I’m going to speak from my own experience in the hope that others will a) find it interesting and b) be able to draw their own conclusions about whether I’m getting it right or wrong. Who knows, it might even help me to reach a decision, because this year’s decision about what to do with my rates is a delicate one. Let me explain. Last year I put them up for the first time in five years. Yes, I know, I should have been gradually increasing them all the time, but I hardly need to say that things have been very tough, economically, since 2007, particularly in Spain, where I live and where most of my customers are. Until last year I simply felt grateful to be maintaining a decent income and, apart from tweaking my minimum rate, I didn’t feel I could justify an increase, at least not for existing customers.

But last year I thought the time was right. Firstly, I was only too aware that, considering inflation, every year I didn’t put up my rates I was effectively taking a pay cut. I had to start again sometime. Secondly, the economy was beginning to pick up and I had an feeling that customers were more likely to accept higher rates than they would have been in previous years. Finally, I was becoming overwhelmed with work. Towards the end of last year I was so busy that I was finding myself working more hours than I wanted to and still having to turn away jobs I’d really have liked to do from customer’s I’d have liked to work for. It was time for action.

Increase

So I put up my rates. Some customers simply accepted the increase. Others complained, but I remained firm, and I was glad I did, because even most of the complainers have stayed with me, although it is true that some of them have been sending me noticeably less work than before. For the first two or three weeks of the year, however, I thought I’d made a dreadful mistake. I had very little work and I began to worry, preparing myself to take lower-priced work if it went on much longer. Then things began to pick up and I eventually saw that the dry period was really a seasonal lull which has affected me before in January, and had very little to do with my new rates at all.

That brings me to where I am now. I’ve had a busy and successful year, but, as we all know, it doesn’t ever pay to stand still, and if I’m going to freeze my rates again I want it to be a conscious decision, not mere inertia. I was aware that successive annual increases still might be hard for some of my customers to swallow and my initial idea was to hold the rates for existing customers while increasing them for new ones. This is something I’d tried before in 2013 with some success. It has the advantage that you can find new customers who are willing to pay your higher rate without any risk of losing your existing ones, with the consequent positive effect on your income and also on your confidence to make increases for all customers in the future. However, over the last few weeks I’ve been just as busy as I was at the end of last year, and I found myself wishing I could damp down the demand for my services just a little, so I didn’t have to keep saying “no” to my best customers. That pointed to the need for another rate increase across the board.

Survey

But obviously one thing was reducing demand a little, another was losing my existing customer base. I started reading articles on the Internet in an attempt to resolve the dilemma. One of them, by Sara Colombo, said something that I initially thought was ridiculous: why not ask your customers how they’d react to an increase? “Well, of course,” I thought, “they’re going to tell you not to do it, aren’t they?” And then I thought a bit harder. What if I could offer something in return? The idea came to me as I was turning down a translation from one of my

Sara Colombo: gave me the idea to ask my customers

favourite agency customers: they send me interesting projects, they pay my rate happily and they pay my bills promptly, but on this occasion I simply didn’t have time to accept their job. So I wrote them an e-mail asking whether they’d be prepared to pay a bit more for my services if I was likely to be more available to take on their work. Then I extended the idea. In total, I picked five of my biggest agency customers in terms of volume, who also happen to be among my favourites to work with. I’d had to turn down work from all of them at various times recently. Would they accept a price increase if it was going to make that less likely?

Well, if I was expecting a clear, easy answer, I was quite mistaken. It’s true, customers don’t vote for a price increase any more than turkeys vote for Christmas, but that doesn’t mean my little survey was a complete waste of time. Four out of the five agencies responded, and I found out, for example, that, for the majority of my favourite agency customers, I am already on the expensive side. One of them told me that any price increase would seriously affect their chances of offering me work. Two more said that it would have an effect, but it would not put me out of contention for all jobs. Only one believed it would have no effect at all on their ability to give me work.

On the other hand, all the agencies that replied were very keen to carry on working with me, and in some of the messages there was a tone of resigned acceptance that I was inevitably going to increase my rates at some point, possibly moving out of their reach. One agency went further, paying me what I took as a great professional compliment when it explained that it could accept a small increase because it was not a normal translation agency and because it didn’t consider me to be an ordinary translator.

Options

The decision on rates remains to be made, however. As I see it, I have five options:

1. Do nothing. This is my least favourite option for reasons I’ve already been through.

2. Stick to my original plan. That means freezing rates for existing customers and raising them for new ones. It isn’t a bad option, but I don’t believe it will resolve my problem of having too much work most of the time. And, apart from the problem of having to say “no” much more often that I’d like, having too much work is going to affect my chances of looking for and finding new customers who are willing to pay higher rates.

3. Bring in different rates for different customers. In other words, I could simply increase them for the customers who I think are going to accept them but leave them untouched for those who probably wouldn’t. To some extent, like most translators I know, I already have different rates for some customers. But this idea doesn’t appeal very much, not least because it won’t have any effect on reducing my workload.

4. Impose a strict across-the-board rates increase. My little survey tells me I will lose work and possibly even some customers altogether. Past experience tells me that many customers will probably accept it better than I expect. Will the overall effect be beneficial or prejudicial? That, of course, is the big unanswered question.

5. Soften a rate increase with flexibility. This is a viable option. The idea would be to raise rates, but to make the increase easier for long-term customers to bear by, for example, dropping minimum charges in many cases. At the same time, flexibility could mean not sticking too strictly to the new rate if necessary – being more prepared to negotiate on price for specific projects, particularly if I find I’ve miscalculated and the sought-after reduction in demand becomes a full-scale famine. This has the advantage that it would probably increase income without so much of a risk of losing business, as I would get some higher-rate jobs even if I sometimes had to work at my old rate. I’d also be able to decide for myself whether I was reaching the ideal volume of work: too much and, having announced the new rates, I could apply them more strictly; too little and I could negotiate more customer-friendly prices. It may well be the way I decide to go.

So what conclusions can we draw from this little experiment? Rates are certainly a problem. One thing is what you’d like to do, another is what is achievable in practice. Without a little ambition and desire to make progress, your real income will inevitably fall every year. But without a degree of realism you run the risk of pricing yourself out of the market you’re in. True, all the arguments in favour of specialising and looking for better-paying customers make a lot of sense and it is a desirable aim. But while you are chasing that Holy Grail you still have to make a living and the balance you find – the balance I’m looking for – will inevitably be somewhere in the middle of that scale running between ambition and realism.

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