Supplier or demander?

When it comes to raising your translation rates, what’s the correct strategy: ask or tell? A colleague and I talked about this at length today, and it struck me as good food for thought.

In one sense, other professional service providers don’t phone you up and ask if it’s OK with you if they raise their rates. When you go to get your teeth cleaned or your taxes done, it generally costs more than the last time you went, but most of us simply accept this without question. We don’t haggle with the dentist about why a cleaning has gone from $150 to $175 in six months, we just write out the check or hand over the credit card and pay the bill. It would seem odd if these service providers made too much of an issue about rates; if I called my accountant and he said “Just to let you know, I’m now charging $10 an hour more than last year, do you still want to come in?” it would give me pause, not because of the money but because of his calling so much attention to a relatively small increase.

Clearly, these people view themselves as suppliers, and as such they raise their rates without consulting their clients. The mobile computer support consultant doesn’t call us up and ask if we’ll stick with him if he charges 25% more, and the bookkeeper doesn’t solicit our input before upping her fees; they just do it, and we decide whether to continue using them or not.

Translation is a little different. While the average dentist’s or accountant’s or bookkeeper’s income base is probably made up of hundreds or even thousands of clients, each of whose contribution to the service provider’s income is relatively small, the average freelance translator probably has fewer than 10 regular clients, and may even earn 50% or more of his/her income from one or two major clients. For a translator, the loss of a major client can be catastrophic, or at the very least result in a need to quickly find new clients to make up for the loss of income.

In our industry, it’s also not uncommon for the rates we charge longstanding clients to fall behind the rates we charge new clients. Most of us are as busy as or busier than we want to be, so it’s not much of a risk to quote new clients a higher rate than what our existing clients pay. But when we reach a situation where a major client is paying substantially less than our other clients, do we: a) take the dentist’s approach and simply start issuing invoices for a higher amount without saying anything, b) ask the client if they will agree to a raise, explaining that we’re now charging everyone else more than what we charge them, c) notify the client that as of X date, our rate is increasing, or d) another approach entirely?

I think that translators resist increasing their rates with existing clients partially because our per-word pay amounts are so small compared to a yearly salary. If we had a salaried job, most of us would see a $2,000 raise as real money, something worth haggling over. But if you translate 200,000 words a year for your top clients, a raise of 1 cent per word comes out to that same $2,000; a raise of 2 cents per word would put $4,000 in your pocket. So I think that too often, we avoid increasing our rates with longstanding clients because we tell ourselves that “it’s only 1,2,3 cents per word,” when in fact that adds up to a lot of money.

In the conversation today with my colleague, one barometer we came up with is our replacement value with our existing clients. For example, could those clients replace us with a translator of similar skill level at the same rates we charge? With some clients, the answer is clearly yes. If we’re honest, I think that most of us will admit that sometimes, we lob out a higher than usual rate because it’s Friday afternoon and we need some time off, or because we’re overworked and don’t feel like negotiating, and the client says yes anyway. In other cases, the answer is clearly no; we’re giving a client great work and fast turnaround times at below market rates, and we need to make a balanced business decision on when and how to try to change things.

5 Responses to “Supplier or demander?”
  1. Ryan Ginstrom August 29, 2008
  2. Judy Jenner September 2, 2008
  3. Kevin Lossner September 16, 2008
  4. Karen Tkaczyk September 30, 2008

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