No matter how long you’ve been a freelancer, rates are always a source of intense stress: charge too much, and you’re afraid of having too little work. Charge too little, and you’re afraid of not earning enough. There are lots of ways to think about rates (see my previous post about deciding how much to charge) and about raising rates, but let’s take a shot at the basics. Here’s a question I often get from other freelancers: how do I raise my rates, and what’s the best time to raise my rates? My take:
If you’re talking about raising your rates with existing clients, my two word answer is: you can’t. That’s a little harsh, but think of it this way. If you have a salaried job and you want to make 30% more than you’re making right now, you’re unlikely to get that raise in your current position. To make that jump, you have to change jobs. And so it is with freelance rates: a longstanding client is probably not going to agree to a significant rate increase, so you just have to look elsewhere. But let’s say you’re talking about a modest increase. A few options here; some may be nothing you’d ever say, and some might work for you:
- You could use Chris Durban‘s suggestion and invoke a third-party authority, like “My accountant has brought it to my attention that you’re my last client paying X cents per word/hour.” This can be a good tactic because the mythical third party is the bad cop, and you get to be the good cop and tell the client how much you love working with them, and that you really hope you can continue the relationship.
- You could try a human-to-human conversation with the client, like “I love working with you because you offer so many advantages : your staff are so helpful and easy to deal with, your projects are interesting and you always pay on time. At the same time, looking at my bottom line, you’re now my lowest-paying client, which means that I only accept work from you when I have nothing else in the pipeline. I’d really love for you to be one of my preferred clients, and the rate that it would take to get here is X.”
- You could just impose the rate increase and see what the client does; send an e-mail saying “As of March 1, 2014, my base rate will increase to X. Please let me know if you have any questions.”
- If you sense that the client could pay more but for some reason is resisting, you could try asking them for the truth (always a dicey proposition, but worth a try!). Such as “I’d like to ask for your feedback on what it would take for me to move into your top tier of translators. I love working with you and am committed to always doing excellent work, so this type of feedback would really help me move my business to the next level.”
But my succinct advice on how to really raise your rates remains: look for new clients.
Now, on to the question of when to raise your rates. Short answer: with new clients, and when you’re already really busy. Why? Because then, if the new potential client says no to the higher rate, you’ve lost absolutely nothing. You’re still really busy and you have enough work. And if the new potential client says yes to the higher rate, you know that at least some portion of your target clientele will bear that rate. Try 15% or 25% higher than you’re charging right now; heck, even try 50% higher and just see what happens. If you believe that you deserve that rate and that your work is worth it, there’s a good chance that the potential client will believe it too. And do not forget that if 100% of potential clients accept your rates without negotiating, you could be charging more. That’s not business advice, it’s just a fact. If literally no one thinks that you are too expensive, you’re leaving money on the table.
Here’s another rate truth: I work with both agencies and direct clients, and I like them both for different reasons. With my agencies, I just translate, and sometimes that’s just what I want to do. With my direct clients, I’m in the thick of the action, usually dealing with either the person who wrote the French document or the person who’s going to use the English document, and sometimes that’s just what I want to do. But here’s a truth of the agency market: you can only compete on quality and service to a certain point. Once you hit the agency’s rate ceiling, you’re stuck. For example I recently wanted to raise my rates with one of my agency clients, but they told me (and I believe, honestly) that they’re already paying me 2 cents per word more than any of their other French to English translators, so I can either continue at the current rate or not work for them anymore. This is not to say that direct clients will blindly agree to every rate increase, but they generally have more flexibility to move money from other budgets and allocate them to translation if they really want to retain you.
Readers, any thoughts on this? Any rate increase techniques that have worked for you?
Thanks for raising such a “controversial” topic, Corinne! Just asking: don’t you think a 25 or even a 50% increase is a lot, especially with agencies? How would you react if your coworking office space would raise their rent along those figures? For me, it’s a nice way of saying “I do not want to work for you any more unless you pay a high price”. Instead, a 10% increase would mean “I am getting better at what I am doing, and I would like my rate to reflect that professional development”.
What do you think?
Thanks Veronique! The size of the potential increase totally depends on what you’re charging now. I agree that with agencies, the range is smaller, but there are also a lot of translators who radically underprice their services. And I like your quote at the end!
Sound advice, as always! I think most of us track things like our average rates, average hourly income, annual revenue, and cash flow. I recently started tracking my order backlog, too. Every week, stated as a number of days of revenue and as a percentage of my target annual revenue. This really gives you some interesting insight about “how busy” you are…you might even be pleasantly surprised…enough maybe even to “dare” to raise your rates 🙂
This is really brilliant, SFM, I love it!
Thanks Sara! That is *brilliant*! That’s a blog post in itself, if you want to write a guest post!
Corinne, it will be the subject of a post in French on La Marmite, feel free to translate it for use here when I get it published (someday…ha ha).
I once got a very straight answer from an agency I’d been working for as a subcontractor from the very first : “I’ve been wondering how you could still work for us at this rate, so OK to raise it, actually to what we pay your colleagues, which is more than you asked.” She added that she was transferring this to other agencies she knew I worked for. Bit by bit this helped.
Nontheless, the worst client I ever had as for rates was the French state. I often worked for them as an interpreter, almost always in drugs smuggling cases. They paid about a third of what was then the current hourly rate even as a subcontractor. The person in charge of their accountancy told me that this was because their rates had not been adjusted since 1968…
Hmm, interesting on all counts, thanks for your comment!
“If you’re talking about raising your rates with existing clients, my two word answer is: you can’t.”
This is generally true, but there exception to this rule of thumb.
I agree that it is generally next to impossible to rate your rate to an agency. The one exception would be if you were stupid enough to be charging the agency less than a competitive rate for some reason. A small increase might or might not be tolerated in such a case. But even in this case, the agency is likely to drop you like a hot potato once they find somebody who can do the same kind of work for a cent less.
When you (slightly) raise your rate to a direct client, at least a certain type of direct client, the chances that you will not be replaced. Since agencies live off the difference between what they get for your work from their clients and what they pay you, if you raise your rate to them, you are taking money straight out of their pocket. To them, it’s almost like stealing.
But although I have been gradually raising my rates to my direct clients gradually over the last 20 years, most of them continued sending me the work anyway.
Since my direct clients are mostly patent law firms, they don’t pay me out of their own pocket. They usually run my cost estimate by their client and it is really their client who pays me.
So as long as their client does not think that my rate is too high, they don’t really care that much how much it costs – it is not money out of their pocket.
But the truth is that I have not dared to raise my rates in the present economy to my direct clients for quite a few years now and only started doing so now … timidly … very slowly …. and only for some languages.
Thanks Steve! I agree that thinking over my own rate increases, I can’t say that I’ve ever lost a direct client over a rate increase, and I do try to raise rates incrementally rather than do a big leap at once. Excellent point about agency margins too!
“Since my direct clients are mostly patent law firms, they don’t pay me out of their own pocket. They usually run my cost estimate by their client and it is really their client who pays me.
So as long as their client does not think that my rate is too high, they don’t really care that much how much it costs – it is not money out of their pocket.”
I don’t know why I didn’t pick up on this last time around, but … are you sure? Certainly in the UK my experience is that translations are a nice little earner for patent firms, and, just like an agency, they will put a significant markup on whatever you charge, so putting your costs up does have an effect on their profit margins. When I was an in-house translator, I was instructed not to use a particular one of the big patent translation companies as backup because they were in fact charging us more than we charged the end client!
I don’t know, you could be right and I could be wrong.
Let, see if other people want to weigh in.
I agree with the suggestion to look for new clients (has worked for me), and I somewhat agree with the thought that you can’t raise rates for existing clients (though a modest increase of 10% has worked for me here), but I don’t agree at all with the suggestion to invoke a third-party authority. It makes you look weak and unable to speak for yourself and not competent enough to take care of your own business. A statement like this basically tells the client: “Look, I have no idea how much to charge and how much I’m earning — or could be earning –, and I leave these difficult matters to other people. Please, abuse me and impose your low rates or other restrictions on me.” It’s a bit of an exaggeration, of course, but that’s essentially the message you’re sending when you’re a freelancer but use other people’s advice as an excuse. Stand up for your own decisions and show that you yourself know what you’re worth!
Thanks Simone! I actually see that situation differently. I see what you’re saying, but I would see the “third party” technique as allowing the client to save face. Instead of saying “you, cheap client, are the lowest-paying client on my roster and that’s got to change,” you’re saying “huh, by the way, my accountant pointed out that…” But I agree with you that it’s a personal decision!
I wouldn’t say that *you can’t* raise your rates with existing clients – in fact I think that ideally you should aim to do this each year. But I agree that you will only be able to raise them by a certain percentage, and there will be an upper limit. Asking new clients for a higher rate is very good advice, and I like the idea of doing it when you’re already busy. But goodness me, a 50% increase would take quite a bit of courage – I’m impressed by your bold suggestion! 🙂
Jane, I agree that 50% is a lot, but not at all out of the question. And the real point is whether you try 10% more or 50% more or 100% more (which I’ve also done…I guess I like to live on the edge…), always ask for more money when it’s not a huge deal if you don’t get the job.
Dear Corinne —
A corollary to the “find new clients” advice. When raising rates, one must always be prepared to lose a client and move on. This is not a bad thing. Leaving behind those who drag revenues dangerously close to (or below) the break-even point is healthy.
I have stopped raising rates, although I did so incrementally for many years. Instead, I post my rates on our website and review them quarterly. They do go down as well as up, and I do not miss an opportunity to advertise on the home page when they go down. Beneath the variations, there is a subtle rise, which is less than the rate of inflation, housing costs, and other indicators, but it is still there.
All jobs are negotiable, so intelligent clients know that the posted rate is just a starting point. Nevertheless, the conversation starts at a different place than the “old rate that I now need to raise.”
Another perceived advantage of posting my rates publicly is that it discourages bottom-feeders from even contacting me. Now, the only unrealistic “offers” I get are from mass emails, from agencies I never heard of.
SR&T, Jonathan.
Thanks Jonathan for that great point: I think a lot of translators live in terror of ever losing a client, whereas the reality is that maybe they and you are just not right for each other anymore. And awesome tip about avoiding “the old rate that I now need to raise.” You should write a book about this 🙂
“… but I don’t agree at all with the suggestion to invoke a third-party authority. It makes you look weak and unable to speak for yourself and not competent enough to take care of your own business.”
Not at all.
Inflation is also a sort of a third-party authority. Everybody knows that inflation is a reality of life, and that the official inflation statistics are basically a big lie. They keep telling us that “inflation was 2 or 3%” year after year, but from this official statistic they first exclude things like foodstuffs, heating, healthcare, and other crucial items because these items items are “volatile”, which makes the whole exercise pretty ridiculous as these are the items that are most affected by inflation.
So if you invoke inflation, a reasonable person would understand that you are basically just making sure that you will be able to stay alive for a few more years.
Also, the easiest way for agencies to invoke a third-party authority is to say “our precious translators have increased their rates to us due to inflation”, whether it is true or not (usually not these days).
I did it last year on a long-term project in which I have been functioning as an agency for several years (although the bit about the translators was not true). The client was clearly peeved based on their e-mail response, but they accepted the increased rates, and the work still keeps coming because we do good work and the client needs us.
Invoking increases based on a third-party as a sort of a force majeure is a good way to increase your rate because it makes you seem less greedy.
But of course, you need to be very apologetic about it and you should make it clear that you are doing something like that very, very reluctantly!
A little while ago you gave me some really good advice: instead of starting with the rate you are charging, go up to X and then you can feel comfortable if they take you back down to what what your previous rate was. If there is no bargaining, then you just got yourself a better rate. If there is bargaining, it’s a win-win as you are seen to be flexible and accommodating.
Excellent article Corinne and plenty of food for thought! As you say, it is critical to understand market rates and what others in your field are charging, since undercharging can be perceived as unprofessional and overcharging can alienate potentially interested clients.
With some of my more “rate-sensitive” clients, I have found that implementing increases (5-10%) on a two-yearly basis works well and allows you to underline that it has been two years since the last adjustment. Writing into your Ts & Cs (and appending these to *every* quote & invoice) that rates will be adjusted annually in line with inflation is a good tactic with direct clients. Make incremental increases the norm and people will appreciate that you are running a professional business rather than a hobby.
To sweeten the pill, one could try highlighting to the client the times when they have benefitted (e.g. has your translation won the agency a new account? Are you their preferred supplier for XYZ?); or add a line about new CPD you have undertaken, to underscore your professional commitment. Essentially, make the client think they are getting value for money (i.e. a professional subject expert charging appropriate fees) and they will be open to negotiation.
Translation should not be a commodity but is often sold that way. It’s our responsibility to educate clients about the huge advantages that a professional translation offers them and help them see the bigger picture.
You are totally, rates are very important and it takes a lot of thinking before quoting…
You are totally right..
Interesting article. I mostly agree. As far as people working in different places of the world, I agree with patenttranslator about inflation. We are in an area with high inflation, and the agencies we work for get paid in USD by US agencies, and then pay their translators in the local Argentine currency. If our rates stay the same, we are making 25% less money by the end of the year, so we have to watch the inflation and rate of exchange. Just thought that may be helpful to translators working overseas. We just write a direct email stating to our clients (whom we have trust with because we have done our due diligence in translation work) our fees for translation are now xx per word.
It’s always interesting to try out a higher rate with a new client. Last year, I got a request from a new client, Agency B, to work on another section of a large report (split up amongst several agencies) that I was already working on for another agency, Agency A. Since the rate I was getting from Agency A was not that great, I decided to try asking for almost 50% more from Agency B. Agency B didn’t even bat an eyelash. They accepted the rate, gave me lots of work and paid within two weeks of invoicing. So, you never know. The thing is, if prices on everything else in the world are constantly going up, why shouldn’t translation rates go up too? I’m not a big fan of following the “rules.” It was the same when I had my house up for sale in the wake of 9/11. There were a lot of houses for sale on the block, and everyone started dropping their prices. I wasn’t desperate to sell, but I wanted to, so I dropped mine to compare with the neighbors, but after having a look at the neighbors’ houses, I realized that I had something that was worth more. So, against my realtor’s advice (you can’t raise your price… especially after you’ve lowered it… it’s just not done!), I went back to my original asking price. Nothing happened right away, but then, suddenly in one weekend, I got three good offers and ended up selling for the asking price. So, I say… it never hurts to try. (with the caveat that price hikes for existing clients should be moderate).
Thanks Barbara! Fascinating case study!
It looks like I’m the only (former) LSP owner posting here in the comments right now, so perhaps my most valuable contribution to the discussion might be from the other side of the table.
But first, this news flash — for the first time in recorded history, I’m going to actually disagree with Chris Durban. 🙂
I’m a bit surprised that Chris would encourage a translator to fabricate a fictional story to tell a client on the subject of raising rates, which is almost holy canon to her. She’s all about taking responsibility for that transaction.
The idea of citing a fictional discussion with your accountant (in my view at least) abdicates responsibility — it’s hiding behind somebody else’s authority.
The only way I can imagine her suggesting this is as baby steps in the direction of eventually taking responsibility yourself — training wheels, perhaps, but never as a way to engage another professional in a serious discussion about translation rates.
Also, at the risk of stating the painfully obvious, deception is never, ever a good idea (ever, ever) in a professional relationship, no matter how small or seemingly benign. The ONLY exception is when the deception serves to spare another’s feelings or fears (not your own) or perhaps to help somebody through a sensitive personal decision.
(If you think I’m overstating the magnitude of this, imagine that in a real discussion with your own accountant or attorney, they fabricate some story to tell you that is not the truth, but is designed to make them feel better about telling you something you don’t want to hear. Then later you discover through some slip-up that the story they told you was actually a lie. How do you feel about them now? Do you trust them more or less? It’s a little easier to understand the thinking on this when you’re on the receiving end.)
Sure, not the end of civilization, but there is no slope more slippery than making somebody else be the fall guy for something you don’t want to talk about. Pretty soon your accountant is going to be responsible for missing your deadlines (or eating your homework — that’s the other test — would you advise your children to do this?)
On the rate discussion, and wearing my former LSP-owner hat, here are my observations, FWIW:
1. Higher rates are earned, not just quoted. Instead of making the discussion all about your own business needs (or a fictional discussion with your accountant) make it about the added value you are bringing to your customer. It’s easier to sell higher rates to a customer when you argue from the high ground of selling a better product.
2. All rate discussions are negotiations, as others have pointed out. You do need to be prepared to walk away from the table, though, if you do not find common ground. Make that decision before entering the negotiation.
3. Respect the business model of your customer and the economics of that business. There is a huge amount of disparagement and hostility to LSPs in the industry in general and this environment can be corrosive to relationships. If you have any rate-related hostility about being unappreciated or undervalued, leave that hostility at the curbside with the trash and keep it out of your rate discussion.
4. Put yourself in your client’s shoes. How do you feel when your property taxes go up, or your mortgage rate rises? A little tight in the stomach, right? That’s how your client is feeling about a rise in your rates. Maybe their first instinct is to replace you — just like your first instinct might be asking the city or county to reconsider that increase in property taxes.
We all know the primary reason translators fear raising their rates is that their customer will replace them. This is absolutely true and it’s not doing anybody any favors to pretend that this is not a reality.
Your best ammunition in this discussion is to anticipate this emotional reaction — to put yourself in those shoes — and sell yourself and your special expertise in the context of making your customer’s product more valuable and their business more highly respected.
Thanks Kevin! Great to have the company owner perspective!
I think Chris mentioned this when I saw her, too, and it was presented more as a baby-step option for the excessively timid. The method I have used in the past with some agency clients is “It’s unfair on my other clients and it’s going to start affecting my availability for you.” Of course, it’s best if this is actually TRUE!
Agreed on higher rates being earned. I have seen this discussion among copywriters recently, too. The advice to charge respectable, professional rates is sound… But people should be realistic about where their skills are at. Some people will only be WORTH x amount to a client, because they just aren’t as good as this other person, who is worth y. Some people only feel they need the quality that corresponds to x rates, even if it isn’t the case.
Ultimately, the higher rates need to earned by ensuring you are really at the top of your game. That means educating yourself: both formally and informally, in your specialist area, your source language and your target language. That means reading specialist journals, engaging with your source and target languages in some way on a regular basis. Further, often overlooked, is taking care with your target language – learning more about writing, style, grammar and trends does not go in any way amiss. But I’m sure your readers know all of this. I just felt like repeating it. 🙂
Kevin, I think that affordable prices are a benefit for the client alongside quality, service, speed and everything else. When a translator gets to the point of needing to cite his own needs, business or otherwise, necessitating higher rates, then it basically means the translator’s ability to provide that particular benefit simultaneously with all others has ceased. This should be especially understandable to a client who received a bottomline bargain a longer time ago in different conditions, especially after asking for a ‘best price’. Still, I’d advocate making any special deals explicitly temporary and not permanent. Also, I wonder what’s your opinion on inflation indexing. On the one hand, buyers can’t expect to be able to escape inflation permanently. On the other hand, the mortgage/tax-like sting which you mention will still be there to some extent even in those situations when you and your client agreed on the indexing already on the onset of your relationship.
Thanks everyone for your comments! Just to clarify, I wasn’t intending to say “Chris Durban says the best way to raise your rates is…” She just mentioned this in a seminar that I attended, as *an option* for talking to clients about rates. Thanks so much for all of your thoughtful comments!
Corinne, is it possible she was suggesting this as “training wheels” only? It just strikes me as something Chris would never say — like a Catholic priest whispering to you in confessional, “Hey, that whole Holy Trinity thing? LOL!” 🙂
Kevin, I especially agree with your 3rd point about unnecessary hostility — in fact, I just wrote a blog post about that that exact issue, which, as it happens, was inspired by Corinne’s advice “don’t take it personally”. And thank you Corinne, for another post with good advice.
Thanks Marie! Glad the “Don’t take it personally” advice was helpful!
Quick one (still under water over here): actually, Corinne has got the guts of my argument right. I was addressing the case of translators who have the jitters so bad that a good cop/bad cop option might encourage them to engage. There’s so much moaning and groaning out there — once you see that prices can be raised, it gets easier.
OK, training wheels, if you like. 🙂
That said, I see nothing wrong with referring to an outside expert in discussions with clients, and in this particular case my accountant did mention to me at one point that my price spread seemed pretty wide. Whence the initial idea. (Incidentally, the same accountant has *several times* pointed out that the annual fees charged by national translator associations are very low compared with professional associations in other industries. Now that’s food for thought, no?)
I will have to ponder the pros and cons of making up stuff in discussions with clients. Not a good idea to pitch skills or expertise you don’t have, for obvious reasons. But frankly, there are quite a number of situations where I see no problem at all.
For example, as you know, I attend client industry events to keep up to speed in my specialisms, but also to meet new (and old) clients; if another attendee asks what I’m doing there, I can say either that (= I track their industry regularly as a matter of course) or start with that and tack on “and I’ve got an important job coming up next week, want to be sure I’m on top of things” to nudge the conversation forward. Or, at an industry event, ask a question of a round table in a plenary context and preface my query with “I’m a financial translator, and I’m here because a number of my clients are interested in what you do.” That grabs everyone’s attention, which is usually what I want. It may not be true, strictly speaking, and you don’t want to overuse it. But I don’t see anything wrong with it. (And when I do relay info gleaned back to my clients, they are usually very interested indeed.)
A next-to-final point: can we please all keep in mind that LSP is not synonymous with “translation agency” or “translation company”. Read the texts, people (starting with, say, the European standard). I am a freelance translator and I am an LSP — I provide language services. Full stop. Big mistake for freelancers to let agencies take over LSP for reasons that I have already explained elsewhere.
Re rates in general, I find it endlessly fascinating to see how many agencies and companies seem intent on competing with each other at fairly arbitrary prices — prices that they then drive down mutually. This when the clients at the top end of the market are in a completely different place (and prepared to deal with expert translators as providers of high-end intellectual services who charge corresponding prices).
Thanks Chris! Perfect!
I have found that small increases every year (at least up to a point) has worked for most of my clients. I have motivated the increases with continuing education,upgraded tools and to adjust to inflation. Most of my clients have stayed, but not all. I do continuously market though and have gained new clients for new prices. I find it hard to keep track of different rates for different clients and try to be democratic and have the same rate for most.
Thanks Tess! Great point about small but steady increases. For example even if you raised your rate half a cent per year, in 4 years you’d be 2 cents higher. Whereas a lot of people have probably not raised their rates for 10 years (seriously). Thanks for the comment!
I think this applies to freelancer who find their own clients. Those working through agencies can’t really contact them and ask for higher rates, well they can but they will probably lose that pipeline. I do love the advice of asking for higher rates when you are busy. I never would’ve thought of that.
Thanks Dorin! I do agree that pricing strategies in the agency and direct client markets are really different. Realistically, it’s in the agency’s best interest to use the least expensive person whose quality fits what the agency needs.
I have raised my rates by 7% on Jan 1 of this year for all my long-standing (direct) clients. I didn’t announce it, and none of them has even mentioned it. And I know for a fact that I wasn’t cheap before. I truly think there’s no general rule. Since I cater to a clientele that is very quality-oriented, price is secondary as long as it’s realistic – and chances are they have all raised their prices recently, too.
Great point, Fran! Here’s another observation: many professionals, like my accountant (whose name is also Fran!) raise their rates 5%-10% per year *without calling attention to it at all* and just notifying clients of the new fee. My accountant has me sign off on her fee schedule every year, and this year she raised her rate from $200 an hour to $220. In my mind, more than worth it; but I agree with your idea that “price is secondary as long as it’s realistic.”
Fascinating discussion indeed — on one of my favorite topics! Great post, Corinne. We usually adjust our rates for inflation at the beginning of each year, which is just a very slight increase that’s never been challenged by any of our direct clients (they adjust their own rates, too). It’s just a standard business practice, but yes, of course, it’s very difficult to substantially raise your rates with existing clients. You might enjoy this tidbit: several of our clients actually approach us every year saying that they would like to pay more — really! Quite lovely. They usually say that we solve their problems and make them look good, so we are worth every penny. That’s music to our ears.
Hello Corinne,
Thanks for this great post. Raising rates may be regarded as a double-edged sword, because most existing clients are reluctant to paying more than what they used to. For me, this has worked mostly with new clients and sometimes I raised my rates to let go of some wily (agency) clients. But we know that, even beyond language and translation circles, money issues have always been “sensitive”. So, in my humble opinion, raising one’s rates deserves good preparation, a well-planned strategy and a timely implementation.
Hi Corinne,
I agree the easier way to rise rates is by finding new customers, and this is what I have done mostly… but I don’t think it is impossible to rise rates for old customer, even when they are LSP’s.
I’ve done it – though, admittedly, not frequently – two different ways:
1) If it is an old customer that has not kept up a steady flow of work (e.g., a customer for which we worked two years ago, but nothing ever since): if they contact me again for new work, they get the current rate for new customers, without discounts.
2) If it is an old customer who has continued to send us a steady flow of work, in some instances I’ve been able to increase our rate by sending messages along the lines of “We’ve enjoyed working with you for x years, and have kept your rate unchanged all these years. Considering the increase in the cost of living, we can no longer afford to work for you at that rate, but we can still offer to you, as an old and valued client, a discount from what we charge new customers: instead of our [current rate for new customers], we’ll charge you [discount rate for old customer]. As you can see, although we are rising the rate we charge you, you’ll still enjoy an x% discount from our full rate,” and I finish the message mentioning new tools or services we can now offer that we couldn’t before.
Thanks Riccardo! Great tips!
What a smart and sensitive way of treating an old customer. 🙂
Hi Corinne,
Really fantastic post – and so useful for so many. I get asked this type of question a lot and you presented the matter very accessibly.
Some comments on some points that I thought were particularly useful:
“If you’re talking about raising your rates with existing clients, my two word answer is: you can’t.”
– Absolutely true. It’s very hard to raise rates with existing clients. You can, and I have done. I simply said: “You’re the last one who I am charging X to, and it’s a little unfair to my other clients. It’s also going to start affecting my availability for you.” The fact is that here you actually have to be telling the truth. If you’re bluffing, they’ll beat you down, because they really will call your bluff. Sometimes it’ll appear you lost, but they’ll come back later saying that actually, that alternative they tried was not as good. For it to be true, you have to be charging that to new clients and that must already be working.
“Now, on to the question of when to raise your rates. Short answer: with new clients, and when you’re already really busy.”
– Also a really good answer. Because only then you really are prepared to take it or leave it.
“But here’s a truth of the agency market: you can only compete on quality and service to a certain point. Once you hit the agency’s rate ceiling, you’re stuck.”
– And yes, this is also true. If you realise you’re massively undercharging, like I did a few years back, and you want to double your rates, then you have to seek new clients. I was SO busy from agencies on my lower rates, or even the rates that were about 30% more than what I started off charging. Now, less so, since I’m simply beyond what some agencies are willing to pay. You can’t compete on quality with people who have a fixed upper limit. You also can’t compete on quality very easily when the agency and client are not in a position to recognise it: think fresh graduates who are not native in your language and have no understanding of your specialist fields. If you want to get beyond that ceiling, you have to find the (direct) clients who are more interested in quality – either because it’s how they see themselves (therefore selling the “idea” of quality may be enough), or because they actually know what quality is (because they know what a good translation in that language, in that field, actually looks like).
Really good post. Great work! 🙂
Great approach, Riccardo. I guess most direct clients want to believe they’re our favourite (at least mine do). And depending on the countries where they’re located, inflation is a huge issue, as well as changes in tax and social security rules. For instance, now, in Chile, freelancers are being forced to pay a percentage of their income towards local health insurance and retirement funds –even if we’re based abroad. Due to that, I had to increase my rates for Chilean clients, to cover the extra expense.
Brilliant, Corinne! Thank you so much for posting about this issue. Believe me, you helped me a lot with it. A few days ago, I decided to increase my rates because I felt confident enough to proceed, but didn’t know if I was doing the right choice. French and Spanish are languages often used in a pretty competitive market. Unfortunately, many FR and ES translators (mainly the latter one) don’t raise their rates afraid of getting less projects and losing customers, but I totally encourage them to lose that fear and go ahead with it. You know? experience makes us wiser, we have invested so much in education, and we totally deserve it :).
Great food for thought, Corinne (and everyone else participating)! I just want to say that in my experience, you *can* raise your rates with agencies (and current clients), but as with anything else in the business world, you have to be careful – careful with how, when, and how frequently you do it. Almost all of my current clients are (unfortunately) agencies, so I know what I’m talking about. I won’t go into detail because I think the others commenting here have covered the main issues, but my point is one of encouragement: Don’t give in, don’t give up! Even if you weren’t continually improving your knowledge, skills, and abilities (you are), the prices you pay for whatever you need to live are almost certainly going up. Get in there and fight the good fight! 🙂
1. The agency top ceiling is a very tricky place to be in. You can actually be earning less than a step or two below because of the complexity of work you receive. Even where the end clients are high payers, simpler translations are likely to go to less expensive translators. You can end up being paid 20% but putting in 80% extra time (Pareto rule).
2. Some agencies won’t send you inquiries even a cent below your rate, in.al. as a matter of professional courtesy and respect. I sometimes wonder what jobs I’m missing out on, especially easier jobs I could do much faster and earn more money doing.
3. I’d prefer more flexible arrangements, but those are hard to get right. Some agencies will use the knowledge that you can and will in some situations go below your normal rates. Others might even possibly respect you less as some less serious and stable, more flickery and a little on the con side if you propose a more fluid deal like this.
4. Still, I let agencies know that I’ll help friends out of trouble when really necessary, without abusing the leverage found in such a situation. This has always been my way.
5. I let them know that lower rates are possible where the end-client is a non-profit, so if I have a worse months I might accept such jobs, or if they’re simply interesting jobs, but for non-profits or legitimately struggling companies or startups, not for companies playing hardball with translation agencies.
6. Quoting one-size-fits-all ballpark rates for new agencies is a nightmare. I’m finally coming to terms with the idea of just phoning them and requesting an honest conversation instead if the relationship’s going to have any future.
7. Rates being rates, direct clients may be more amenable to surcharges or a combination of per-page (preferable) or per-word billing with billable hours (research, editing etc.) than agencies are. Also, clients may be used to paying them more than you’re used to receiving them… agencies which pocket the difference are probably not just an urban legend.
8. End clients may be more amenable to a full-way quality option, notably one putting your favourite proofreading or editor in the loop, making all three of you happy and drawing benefits.
9. A lawyerly trick. If you need to let a client go, pass the client on to a younger sidekick, or a less financially successful colleague who charge less. Especially true for clients whose fields you no longer work in and prefer to leave behind.
10. In an honest conversation, you can always say, truthfully, that you decided that giving your client a chance was better than leaving him in the dark and not accepting his jobs, making him wonder what’s going on etc.
11. Some clients can be talked into reducing the workload involved in earning your current fee (e.g. for-publication editing of something which is going to be read just once for internal needs). Or delegating some of your simpler jobs to someone less qualified instead. Or delegating their own support staff to help out with hoops.
12. As an added benefit, a lawyer lending you his intern for terminological research could start seeing you as his own equal, not the intern’s.
13. ‘Just translating’ is not that rare with end clients, or ‘just translating’ plus research. Technohoops are generally involved in mass orders involving an MLV and a corporate giant, software localisation, custom inhouse CATs and such like. Even formalities should be easier with end clients.
18. Agencies have a harder time being unique than we do, and they cannot rely on the uniqueness of their freelance collaborators for obvious reasons. So you simply aren’t going to be paid for your USP. If your USP is strong and convincing and you have what it takes to sell it, chase direct clients instead. Agencies may still cave in and ask you to work for them at those new high rates, especially in rare language pairs and speciality fields.
19. I use Latin to experiment. Clients are poorer than for PolishEnglish, inquiries are scarce, jobs are difficult, but competition is practically nonexistent. I’ve seen agencies approve some really nice rates.
Sorry, just in case I wasn’t clear enough: Latin gives me a taste of what it feels like to negotiate when there’s no competition. This will probably prepare me to identify such situations in Polish-English and English-Polish.