How to Overcome the Fear of Raising Your Prices
Let’s be honest, raising your prices can feel scary. It’s not easy to tell a customer that you’re going to start charging them more, especially when you’ve created a relationship with them over time. You are essentially bringing about change in that relationship, which could ultimately put it at risk. The client is always free to turn down a rate increase if they don’t want to pay it, and you have to be aware of that possibility so you can decide what to do if this does end up happening.
That said, you shouldn’t let this prevent you from raising your rates! Increasing your prices is essential if you want your business to grow and support you in the long term. It’s far too easy to find excuses not to put your prices up when you know you should. Whether you’re telling yourself that you don’t have time to ask properly, you haven’t got another client who can replace this one if they say no, or that now’s just not the right moment, it’s important that you recognise the narrative you’re telling yourself, and then raise your prices anyway!
The problem with not pushing yourself outside your comfort zone is that, if you don’t, you won’t remain comfortable for very long. Due to inflation or suppliers putting their prices up with you too, your costs will undoubtedly increase over the years. This means that if you don’t raise your rates with your customers, you’ll inevitably end up losing out and will have to work longer hours to cover your expenses.
In this blog post, I’m putting together some suggestions to help you overcome the fear of raising your prices and push ahead regardless. So if you, like most freelancers, have found yourself putting off a rate increase at one time or another, here are some things you can try to make sure your next price increase happens first time!
How to raise your prices
1) Acknowledge that it’s scary for all of us
We can’t ignore our feelings around money. From our upbringing to our previous experiences, there are so many things that feed into our emotions when it comes to our finances and how much we earn. But being aware of our feelings and accepting them doesn’t have to lead to inaction.
Raising your prices with clients is scary for all freelancers. Hopefully, knowing that all of us are going through the same thing will make it easier for you to take action and raise your rates as well.
2) Look at your testimonials for a confidence boost
One thing you can do that often helps is to look back over testimonials or kind words you’ve received from customers in the past. This can give you a real confidence boost because they show that the work you do is valued and appreciated (something that’s easy for us to forget!).
3) Start small and pick one client
If you've decided to increase your rates across the board, pick one client to raise them with first. That way, you're minimising the risk if the client says no and walks away.
I always recommend to my mentees that they carry out a full client assessment, looking at how much they’re earning per hour with each customer and how much they enjoy working with them. If there’s someone on your list who is paying less than you need to be earning and who you don’t really like working with, they’re the perfect client to raise your rates with first! If they say no, it won’t be such a loss to you, and you’ll free up some time to look for a new client you enjoy working with who is willing to pay your rates. On the other hand, if they say yes, it will give you a confidence boost to approach the customers you’re more afraid of losing.
4) Ask for a testimonial first
If you haven’t got a testimonial from the client you want to raise your rates with, ask them for one before you tell them you’re increasing your prices. First of all, if they provide you with a nice testimonial, it proves that they value the work you do for them. Secondly, any testimonial they give will tell you precisely what it is they value about your services. You can then build this into your messaging when you inform them that you’re raising your rates. And finally, if they say no to your rate increase and you decide to walk away, at least you’ll have gained something from the relationship beforehand.
5) Think about the worst-case scenario
What’s the worst that could happen? I always talk this through with my mentees when they tell me they’re nervous about raising their rates with a specific customer.
Let’s imagine the client says no to the rate increase and decides to look for someone else who is willing to provide a cheaper service instead. Would this actually be such a bad thing? If you weren’t working for this client anymore, you’d probably have more time to seek out a better-paying client. And sometimes, this is exactly the motivation we need!
However, more often than not, the client won’t want to lose you. Having to find someone to replace you and then familiarise that person with their company, products and/or services would take time, effort and resources, meaning that it’s in their interest to keep you on. If they don’t want to pay your higher rates, the likelihood is they’ll try to negotiate on the price rather than cutting ties. And this is where my advice about quoting higher than your minimum comes in!
As you can see, once you’ve considered all the possibilities, and decided how you’d deal with each eventuality, raising your rates probably isn’t quite as scary as you originally thought.
6) Treat it like giving yourself a pay rise
If it helps to reframe your rate increase in your mind, you can think of it as giving yourself a pay rise. If you were in salaried employment, you’d be likely to get a slight salary increase every year or two in line with inflation. Alternatively, you might get even more if you received a promotion or moved up a pay bracket within the company.
If your clients are employees themselves, they might be able to understand this perspective better than you simply increasing the price you’re charging them for your service. If you think it might help to explain it to them this way, give it a go and see how they respond.
Of course, there are many ways you can go about framing your price increase. If you’d like some precise ideas to help you word your request or decide how to do things, I’m happy to help through my One Client, One Rate Increase package.
This offering has been designed to help you come up with a plan of action for your unique circumstances. After you tell me about your situation, I’ll provide strategy advice to help you overcome your fear so you get paid the rates you deserve!