How to Increase Your Freelance Rates (8 Tips)
Asking for more money is one of the most daunting challenges facing freelancers. At the same time, however, it’s one of the most significant obstacles for you to overcome. After all, your earning potential is directly influenced by your freelancing rates.
I don’t know what it is about negotiating rates that turn a freelancer weak at the knees. Perhaps it’s the fear of a client getting angry and dismissing you – this almost never happens. Or maybe it’s the uncertainty around what it’s “okay” to charge.
Personally, I used to worry about how to react if the client said “no” – I didn’t want to stop working for them, but if I continued at my old rates, would I look like a pushover?
Whatever your reason, today, we’re going to attempt to solve this conundrum: I’m going to share eight actionable strategies for increasing your freelancer rates.
Before we start, in my mind, there are two opportunities to increase your rates:
- Request a rate hike from existing clients.
- Quote higher rates to prospective clients.
In this article, we’ll be covering both options. Oh, and it should go without saying, but quality work, a solid reputation, and an impressive portfolio are prerequisites for earning the big bucks.
Let’s say you run a self-improvement blog, and you’re looking for a writer to expand your content output. Which of the following writers would you hire?
- Someone who approaches you offering to write about dog training, gardening, sports, dating, and anything else you’ll pay them to write about.
- Someone who markets themselves as a self-improvement specialist, who spends the majority of their time writing self-improvement based content.
In other words, the age-old question: do you go with the Jack of all trades or a renowned specialist? And, more importantly, which of these applicants are you likely to pay more?
Of course, the answer is simple – the specialist.
Unfortunately, many freelancers take the “all-rounder” approach, at least initially, wrongly believing that this is the best way to land clients.
This is way wide of the mark. The truth is, you’re more likely to secure customers when you market yourself as a specialist, and, more importantly, you’re also likely to earn more per hour.
I experienced this first-hand when I started freelancing. Initially, I offered to write about any topic under the Sun, meaning I was effectively marketing myself as a homogenous SEO article writer – these writers are a dime a dozen. This drove my rates down and gave me little opportunity to differentiate myself.
Only after I switched to a specialist approach did my freelance career take off – as did my rates.
2. Increase Rates Gradually
Here’s another strategy I use myself. It came about as, when I first started out, I had no idea how much to charge, or how much the market would be happy to pay – here’s a hint: it’s probably more than you think.
With my first few clients, I negotiated an overly-cautious rate. However, this confirmed to me that my low rates were acceptable – and perhaps people would be willing to pay more, too.
This led me to implement the following strategy: once two clients had accepted my current rates – thus validating my prices – I would quote future clients 10% higher. Rinse and repeat! I coined this my 2 + 10% rule.
This allowed me to climb the pay scale relatively quickly, consistently swapping low-paying clients with higher-paying ones until I reached a point where I was happy. Of course, you might prefer to increase your rates for every client, or every third client, and who says you can’t raise your rates by more than 10% at a time?
3. Perfect Timing
If a business experiences higher costs, it, in turn, will increase its prices to protect margins. This means that gradually rising costs are just a part of business – also known as cost-push inflation.
Your clients will be aware of this and probably increase their prices annually to reflect this. As a result, they should understand that their contractors are likely to do the same.
The key is to request your pay rise at a time of year that “makes sense” – ideally at a time when all businesses are contemplating their prices. This way, your clients can absorb their increasing costs into their new prices.
In other words, don’t ask for your pay rise on a random Wednesday in mid-August. Wait for a time of year when increasing your rates is expected – the end of the calendar or financial year, for example.
Clients are likely to respond better to this expected behavior, as you appear less like a money grabber trying to pull a fast one, and more like someone implementing their year-end strategy. Clients may also be more understanding at these times as they are in the process of renegotiating prices themselves.
As an added tip: always give your clients at least one month before implementing price hikes – it’s just common courtesy!
4. Reduce Hours
Many inexperienced freelancers attempt to increase their earning potential by working all hours of the day. After a few months of this, most of us realize it’s no fun, and try to cut back to a healthier working schedule.
Anyone with any understanding of economics knows that by cutting supply, prices increase. When you reduce your working hours – a decrease in supply – this should be accompanied by an increase in your rates.
Of course, this needs to be framed correctly for it to work. You could tell your clients that you’re cutting back your hours so that you can focus on just one or two clients – thus increasing the quality of your work and giving you the opportunity to improve communications with your select group of clients. To make this possible, you’re increasing your rates.
When worded this way – and by highlighting the value proposition – a client is more likely to accept.
Of course, you can’t just say this to every client and then not cut back on your hours – that’s unethical. However, it is an excellent way to increase your rates and redress your work-life balance in one move.
5. Avoid Problem Clients
Regular readers of the Elegant Themes blog will know that we’ve already covered how to identify and avoid problem clients in detail – if you haven’t read the post already, it’s well worth a read.
As experienced freelancers will tell you, most “bad” clients are overly concerned with money. There’s nothing wrong with being prudent, of course, but when a client tries to squeeze every last cent out of you, that should set alarm bells ringing.
When you work only with “good” clients – clients who appreciate you and can understand the value you provide – you give yourself more rate flexibility down the line.
If you do a top job consistently, these clients won’t fight you for a small annual raise. They will understand that the value of your time increase with experience, plus they will want to reward you for the stellar job that you’re doing so that they can retain you for longer.
For the record, you have almost zero chance of getting a raise from problem clients, which further highlights the importance of due diligence.
I also recommend experimenting with the rates you quote your clients. This strategy is especially viable if you are already booked solid, giving you the freedom to try new things without too much fear.
For example, you might decide that the next three enquiries you receive, you will quote rates equivalent to $50, $75, and $100/hour. Perhaps the $100/hour seems too high to you right now – but how do you know clients will baulk until you’ve quoted it to a real person?
If you really don’t want to risk pricing yourself out of legitimate business, wait for opportunities you feel indifferent about. We all get them: inquiries that, for whatever reason, don’t excite you as much as they should – perhaps the work is slightly outside your usual scope, or you don’t get an overly positive vibe from the client.
Ask yourself: how much would I have to charge to get me excited to take on this project? Then, go ahead and charge it – you have nothing to lose, as you probably wouldn’t have accepted the project at your regular rates.
If the client responds positively, you have your first super-high-paying job, and you have tangible evidence that some clients can afford to – and will – pay those rates.
7. Expand Your Services
I’m aware that this strategy contradicts my earlier point about being a specialist. However, once you’ve established yourself, there’s no reason you can’t expand the services you offer – slowly.
Ask yourself why you think clients pay good money for your services. Sure, high quality work is important, but they are also paying you for convenience. They want you to get on with the job without causing them any extra hassle – I know from personal experience, I’m prepared to pay a freelancer considerably more for a completely hands-off experience.
With this in mind, think about how you could present your expanding range of services to a client. Off the top of my head this could include:
- Synergies – for example, a content writer could offer social media management to provide extra value.
- Better working relationship – by working more closely, you will better understand the client’s needs so that you can deliver a tailored service.
- Long-term relationship – by increasing your workload for a particular client, you’ll become more committed to that client.
- Convenience – the client only has to deal with one contractor, rather than one for each separate service.
If you promise to help scale a client’s business without requiring any more of the client’s time, trust me: they will be more than happy to pay your higher rates.
8. Stop Offering Discounts!
This is one of the most frequently-made freelancer mistakes: just because a client asks for a discount, doesn’t mean you have to give them one!
Your rates are what they are. If the client isn’t prepared to pay, you should politely turn them away – they are likely to be a “problem” client.
Some clients might ask you for a discount if they can guarantee a high volume of work. From their point of view, this seems completely reasonable. However, from your perspective, they are asking you to work for longer at the lower rate – never a good idea.
If you currently offer clients discounts just because they ask, stop. By refusing to reduce your rates, you’ve effectively increased them in a split second.
As a freelancer, you have three ways you can earn more money: take on more clients, work more hours, or increase your rates. In my opinion, increasing my rates is by far the most desirable of the three.
Increasing and renegotiating your rates is a skill that all freelancers must learn. With a bit of trial and error, you’ll figure out what works and what doesn’t.
Remember, though: sometimes a client will decline, not because of anything you did wrong, but because their budget just won’t stretch any further. When this happens, don’t beat yourself up about it – it happens.
For now, though, I want to hand over to you. Do you have any strategies you use to increase your freelancing rates? What works and what doesn’t in your experience? Share your thoughts in the comments below!
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