How to raise your rates

Greetings, readers! Our final master class of the year is next Monday (December 11)! For all of you beginning and aspiring subtitlers and audiovisual translators, guest instructor Molly Yurick will teach Breaking into the subtitling market, a two-hour class packed with practical advice on the key concepts of the subtitling market, free and paid subtitling tools, pricing models, and how to pursue training and find clients. Registration ($75) includes the recording and we hope to see you there!

This week, let’s talk about how to raise your rates, because the end of the year is a good time to strategize about this topic!

Most importantly, it’s rare to make a big rate jump with an existing client, and how/when to raise your rates depends mostly on how much you need or want to hold on to that client’s business. Here’s what I mean:

• In many professional service businesses, it’s common to raise rates without specifically notifying your clients. My accountant, my dentist, my graphics person, all seem to raise their rates every year, but without drawing too much attention to it; I just notice that the bills from them are suddenly somewhat higher. I would say that this is uncommon in the language professions; it’s usually on us to specifically get the client’s approval before we start billing them more, unless we bill them on a per-project basis, in which case they may not notice the increase.
• In a sense, this is an argument for per-project billing. I’m not sure that I’ve ever encountered an agency that accepts per-project billing, but lots of direct clients do. I think that some direct clients even prefer per-project billing, because it gives them one number to focus on: “How much is this going to cost us?”
• This also means that big rate jumps normally come from new clients. If your current clients are paying 15 cents per word and you’d really like to be making 25 cents per word, you’re simply going to need to find new clients.

Assuming that you’re billing clients per word/hour/page/day (anything other than per-project), you’ll probably need to inform your client ahead of your rate increase and get their approval. How difficult that is and how carefully you need to handle it depends on how price-sensitive the client is, and how much you need or want their work. Let’s go in order of difficulty, from easy to difficult.

• The easiest way to raise your rates is to simply inform the client of your price increase. “Just checking in, to let you know that as of January 1, my per-word/per-page/hourly/daily rate will increase from X to Y.” The hard part is that if you’re going to use this strategy, you have to be willing to lose the client, because you’re essentially saying, “take it or leave it.” In my experience, this technique works well with a) clients you’re not particularly concerned with retaining, b) clients who merit an “annoyance fee,” because they are difficult to work with (you’re not interested in working with them unless they’re willing to pay the annoyance fee), and c) clients who you perceive are willing to pay more than you’re currently charging.
• A little more on the annoyance fee. I’m a pretty tolerant person, but every once in a while, I work with a client who is…just…difficult. An example for me is clients who call on the phone with a frequency that I would consider excessive. Years ago, I worked with a client who would call me (no kidding) three to five times a day whenever I was working on a project for them. This was a direct client with a large budget, and finally I told them, you can call once a day and talk to me for up to five minutes. After that, every phone call will be billed at $75 per 15 minutes (note that I was getting paid well to translate for them, but not $300 an hour). And, guess what, they kept calling. The eventual bill just for the phone calls was in the thousands of dollars. That’s an example of how an annoyance fee can be beneficial.
• A middle of the road option is to discuss the rate increase with your client, and see what they say. “In looking over my accounting records, I see that I haven’t raised my rates with you in over three years. I really enjoy our work together, and I appreciate the large volume of work that you send me. All new clients that I’m onboarding this year will be paying X; would it be in your budget to pay that amount, or would you be able to let me know how that type of increase might affect my work volume from you?” This strategy is tricky, because the client now knows that you perceive that they’re underpaying you, which isn’t something you want to convey without thinking it over. I’ve had successes and failures with this strategy, partially because it feels vague and waffle-y on the part of the freelancer, and because a lot of agencies simply won’t tell you (and they’re not obligated to tell you) what they’re paying their other translators. I’ve had clients who wouldn’t give any sort of substantive response (“It’s up to you” type of thing, which, in a way, is true); clients who said “You’re already at the top of our rate range,” and a very few clients who said, “That would work for us.”
• The hardest situation is when you have a client who is paying you less than you’d like to be making, but you’re very dependent on their work. Honestly, a lot of freelancers are in this situation: they have a dominant client that also pays poorly. In this situation, make sure you’re not trying to get blood from a stone. Many low-paying clients’ business models are based on paying low rates: they simply cannot pay more if they want to retain their own end clients. As frustrating as this is (you feel taken advantage of, you’re getting burnt out), you are ultimately responsible for accepting or declining any given client’s work. If you’re in this situation (big client, low rates), it’s time to vow that you will not be in the same situation a year from now. You will start doing at least a small amount of marketing every day. You will Always Be Marketing.

I’m also guessing that in the current climate, some agencies may tell you that they’re under a lot of downward price pressure from their end clients due to various factors, including MT and AI. Remember that their business is their business, and your business is your business. A client telling you this is like you telling a client that you need to raise your rates because you bought a new car: not their problem. If your agencies are pushing their own rates down, that’s up to them, but you have a choice to accept or decline those rates.