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Freelancers interested in earning big should always be looking for opportunities to raise rates. Luckily, if you're reading this in the fall, you're at one of the easiest times of year to get a raise.
I'll explain why in a minute.
But first, let's talk a little economic reality about why you need to get aggressive about asking for a raise.
Freelancers need to continuously raise rates, because the cost of living isn't stable. The price of oil and corn are both going up as I write this, for instance.
You need your rates to rise a bit just to keep up with inflation -- and they need to go up more if you want to get ahead.
Fortunately, the approach of a new year sets the stage for pitching clients that you deserve higher rates.
Fortunately, the approach of a new year sets the stage for pitching clients that you deserve higher rates. If like me, you have a goal to earn more money from freelancing each year, rate hikes are key.
I know what you're thinking: Asking for money makes you feel weird.
But standing up for what we're worth is the only way freelancers end up earning fair wages. Companies won't necessarily volunteer to pay you premium rates -- but they might give them to you if you ask them the right way.
How can you get your clients to pay you more? Here is my list of effective ways to get a raise:
Raise Your Rates for New Clients
This one's easy -- simply increase the rates you offer to new prospects, effective in January. Start turning down clients who won't pay that rate. Remember, it's always better to come in at a high rate than to have to renegotiate for more money later.
Ask Existing Clients for a Raise for Next Year
Note that you should not try this if you aren't ready to walk away if this client won't pay your new rate.
If you can make a firm "raise or leave" offer, then mid-November is the ideal time to employ this strategy.
If you ask for more money and they say no and then you stay, you will be this client's doormat forever. They now know you'll work for peanuts and have no self-esteem!
No client is likely to double what they pay you overnight.
Next, don't ask for too big of a raise all at once. No client is likely to double what they pay you overnight. Think more in the range of 10-15 percent. If the existing rate was very low, I've known clients to spring for 25-50 percent more. But smaller raises tend to be more readily accepted, so be careful.
Notifying clients of a rate hike that won't take effect for six weeks gives the decision-makers time to absorb the idea -- and to budget a little more for you in next year's budget, which they are likely working on now. The fact that they don't have to start paying more right away helps make that rate-hike news more palatable.
The trick is to make the client feel special, before you drop the news on them. Then, make it look like they are still getting a deal at the new rate.
I use a script that goes like this (bracketed parts give the rationale behind each statement):
My business has grown substantially over the past year. I've loved working with you, and over the months I've learned a ton about your business/publication. [Translation: I'm reminding you I'm worth more to you now than when I started -- and it would involve a time-wasting ramp-up to break in a new writer.]
My rates have increased as the year rolled along, but because of our great relationship, I've kept you at your original rate. [I've given you special treatment!]
However, as of the new year, your current rate will be below my floor. That's why starting in January, my rates will be X.
I appreciate your business and look forward to our continued relationship. Please let me know if you have any questions about my new rates.
By being confident and clear about what raise you need and when it will take effect, you come off professional. Giving the client lots of notice also helps keep clients from feeling sandbagged.
If you really want to ease them into it, add a sentence that says, "My rates in January will be X, but because of our relationship, I'm willing to extend you at your current rate until Feb. 1." That will give them yet another whole month at the existing rate.
When you ease them into the new rate in your February billings, they'll likely hardly raise an eyebrow. You've taken a rate raise and spun it into a 1-month discount, so the client can still feel like they're getting a deal.
Pitch Higher-Paid Services to Existing Clients
A writer might make $50 a blog post, but pitch a special report or white paper to that same client, or a rewrite of their website, and you might snag a project worth $1,500-$5,000 or more.
If necessary, learn new skills in order to offer services that command better rates. Upselling current clients is easier than finding a new client, every time.
Offer Volume or Package Discounts
If you think the client might balk, offer more than one option. Perhaps if they'd sign an ongoing contract that guarantees you more work than you got previously from this client, you'd discount that new higher rate a bit.
This one's a win-win -- you still make more and you get additional work volume, while the client avoids having to pay the highest new rate you had in mind.
Become an Agency
If you've been a solo freelance writer or graphic designer, consider teaming up with others to form a virtual agency. Creative teams and agencies often command double or more the fees of freelancers who are positioned as solopreneurs.
Offer to help that client by bringing on a designer or writer and managing the whole package for them. Less hassle for the client = higher fees for you.
Find More Clients Yourself
Lots of writers fall into an easy rut of getting work through intermediaries -- agencies or job platforms such as Elance or Guru.com. Just remember, every time you do that, you're likely giving up half or more of the income from that gig, as I just mentioned above.
For instance, when content mill Demand Media filed to go public, its data revealed that it was paying writers $15 for a typical article, while bringing in an average of $54 in ad revenue.
Up your marketing game and pitch clients directly (or drive traffic on your own niche websites and put up your own ads) and you could keep all the revenue instead of just getting a portion. It's more work than sitting at your computer browsing opportunities on some aggregator platform, but proactive marketing can pay off in better-quality clients and substantially higher pay.
Use the 1-Year Anniversary
If it's not year-end when you read this, know that there is one other natural opportunity to begin a discussion of rates -- and that's on the anniversary of when you started working for this client.
Surely you are a better writer and know more about your topic now than you did then, so you deserve a higher wage. Keep a calendar of when you started with each client, so that you don't miss an anniversary.
Drop Fixed-Rate Clients
If you're freelancing for mills or other places where getting a raise is impossible because the client only pays one set, low fee to everyone regardless of ability, this is the wrong type of client. Start laying the groundwork now with your marketing to leave your fixed-rate clients. This time next year, you want to be writing rate-raise letters to the sort of clients that will pay you more as your knowledge of their business increases.
Drop Your Lowest Payer
Nearly every freelancer I know has one client they know they should dump. The rate is too low, and often this client is also their most difficult to work with, too. If this client's rate is below all your other clients, they are dragging down your average pay. They're also probably dragging down your self-esteem, too.
Dropping your bottom-feeder will instantly boost your self-confidence, along with your regular wage. Killing off your time-sucker client also frees you to do more marketing activities that might bring in a better-paying client.
How will you raise rates as we head towards 2013? Leave a comment and let us know your strategy for the coming year.