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?