Strategies for Increasing Prices as a Freelancer Without Losing Clients

As a freelancer, one of the challenges you’ll likely face is deciding when and how to increase your prices. It is common to be hesitant and even have anxiety over increasing your prices, thoughts like… “Will I lose my clients?” or “Will this ultimately kill my business?” are most likely going to plague your mind. While it can be intimidating, it’s essential for your career’s growth and financial stability. However, you don’t want to risk losing your hard-earned clients in the process. 

In this article, we’ll explore four strategic approaches to help you increase your prices without driving clients away.

 

1. Gradually Approach, with communication and Consideration

   Raising your rates suddenly can shock your clients and lead to dissatisfaction. Imagine yourself as a buyer, and your service provider initiates a sudden switch of a price you had come to be used to, my guess is you will be a bit reluctant to accept the new price if you will even accept it at all.

   So to mitigate this, opt for a gradual approach. Start by informing your clients that your prices will be increasing in the near future.

   Give them time to adjust and prepare for the change. You can even give them a grace period to access your services at the current price before it goes up. This not only shows professionalism but also allows you to maintain transparency in your business relationships.

   Effective communication is key when you decide to increase your prices. Reach out to your clients individually, explaining the reasons behind the increase.

   Of course, you don’t want to go overboard with explaining why the prices are going up, you simply want to highlight any improvements in your services, experience, or additional value they can expect. Make it clear that you’re committed to providing exceptional quality and that the price adjustment reflects the value you offer.

   Also, be open to discussing the increase with clients who may have concerns or questions because yes, you want to be firm but not too rigid and authoritative, you must exhibit a decent amount of consideration and communication.

2. Value-Based Pricing
   

If you charge hourly rates, consider shifting from an hourly model to a value-based pricing strategy. This approach focuses on charging clients based on the specific value they receive from your services. I have never been a fan of the hourly rate pricing model, I find it confusing and it makes little sense to me.

If a project should normally cost $1000 and I’m able to complete it in an hour and my hourly rate is $200, does it not feel like I’m getting punished with losing $800 for being so good at my job that I can complete it in very little time?

The Fixed rate and open negotiation models cut out all the complexities while allowing you to make more from your services.

In open negotiations with your clients, you can talk about the tangible benefits they’ve gained from your work and based on that premise vary your prices from client to client, as each client will not derive the same value or impact on their business from your service as another might.

Similarly, clients have varying purchasing powers, and because service-based businesses are fluid in nature, you can make substantially more by negotiating prices differently with every client.

A good example will be working for an individual vs working for a business, a business will pay you substantially more, sometimes even higher than your asking price. I’ve had businesses reach out to me on Fiverr and end up paying 3 to 5 times more than the price they clearly saw on my fixed rate gig.

While individuals are often only looking to cut cost, businesses might want higher priority of their project from you, quick turn around time, or better quality work overall because they are a business and will probably already be making more money from the service you offer them when they plug it into their business. But besides the individual vs business comparison, some individuals have higher purchasing powers than others and are willing to pay more and you can tap into that to increase your prices.

Align your pricing with the impact you’ve made on their projects or businesses. Clients are often willing to pay more when they can see a clear return on investment, but using an hourly pricing model can rob you of that opportunity.

• Split Existing Packages
  

  If you offer packages, consider splitting them into smaller, more affordable options. This provides your clients with flexibility. They can choose the elements they need most, allowing you to increase your income while accommodating their budgets.

  Here’s how I used this strategy in my freelance business as a singer, songwriter, and music producer.

  Previously I’d charge a fixed fee for working on “A SONG” which included three services that could stand alone when I thought about it.

  –  Lyrics Writing
  – Melody Recording
  – Access to Vocal Stems

  Once I split the services this way I increased my price by 3x without it seeming like I was actually increasing my price.

  This strategy can also attract new clients who may have been deterred by the previous all-inclusive pricing.

• Experiment Long Enough
  

  It’s essential to test your new pricing structure and give it some time. Don’t be discouraged if you experience a drop in clients initially. It’s a natural part of the process. Monitor your client retention rate and the response to your new pricing over a few months.

  You may find that the clients who stay are often more committed and value your services more. In the long run, this can lead to better working relationships and a more stable income.
  Expect Customer Drop-off and That’s Fine! But a drop in customers does not mean a drop in income, nine times out of ten, you do less or the same amount of work for more money.

 

CONCLUSION: 

Increasing your prices as a freelancer can be a daunting task, but it’s necessary for your professional growth. By implementing the strategies mentioned above, you can raise your rates without losing clients. It’s crucial to approach the change gradually, communicate effectively, offer flexibility, and give your new pricing structure time to yield results. Remember that not all clients will stay, but that’s perfectly fine. Embrace the clients who appreciate your value and are willing to invest in your services. As you continue to refine your pricing, you’ll attract clients who align with your true worth and build a more sustainable freelance career.