Work smarter – not harder: that should be the aim of any freelance consultant or consulting agency out there. Instead of finding new clients, the better way to increase your revenue is by raising your consulting rates and charging your existing clients more. However, it’s easier said than done. A lot of times, we’re scared to increase our rates because it may drive away our existing clients and prevent us from booking new ones. However, it’s a necessary step for growing your business and freeing up more time.
Here are a few ways you can command higher fees as a freelancer, consultant or agency.
1. Start with a rate you want
Many consultants make the mistake of starting with a lower rate, hoping that over time, they’ll be able to ask for more money for the same work. The truth is, most clients stick to your initial price and they won’t negotiate in the future.
Let’s say that you start out with an hourly rate of $50 and you start pitching potential clients. When they consider whether to accept your rate or not, they think of those $50 an hour in terms of return on investment for their business. As for the bad clients, they’ll think of it as a cost and they will try to lowball your rate at any time possible.
For example, they could tell you that you should lower your rates by 30% because they will have “more business for you” or that it could turn into a “long-term relationship”. These are mainly excuses to get you to lower your initial offer.
There are two ways to get the rate you want from the start:
The first one is to choose a rate you want ($50 an hour) and stick with it, no matter what, even if it means not getting the job.
The second one is quoting slightly higher (e.g. $60 an hour) so you’re ready to drop the price to your desired rate and make the client feel like they got a great deal.
Unfortunately, there is no single solution that works well here – you’ll just have to wing it. From my experience, you’ll be able to get a good feel for what the client would want to pay by looking at their website, social media profile and the same type of work someone else did for them before. As a writer, I would go to their blog and look at their previously published content – who wrote it, when they wrote it, what it’s like. Then I could determine my starting rate when I start negotiating.
2. Convince them with value
If you want to charge X amount of money for a service or product, the client will see it as a cost. However, if you show them (from previous experience) what that money can bring them in terms of new leads and business, they will see it as an investment rather than a cost.
Maybe they’re not interested in another content writer offering his services. But a writer who grew traffic by 30% and increased MRR by 9%? That will get their interest. Now you’re no longer considered a cost – you’re an investment.
An example of an article I wrote a while ago – it netted over 1,000 backlinks and ranks for almost 500 keywords – enough to convince any client about my work.
For this part of the plan, you really need solid data from previous clients. Whenever you do long-term work, make sure to ask your clients for the results that your work brought them. Whether this is marketing, design, web development or something else, it’s crucial to have the data before and after your work.
One practice that we advise for anyone sending business proposals through Better Proposals is to always include a section for proof. Here you can include reviews, testimonials, case studies, customer videos and anything else that shows what you did and how it helped a client. Sometimes, just having a great testimonial will be enough to convince the client to start working with you.
3. Offer upsells
One of the easiest ways to charge more for your work is to create packages and offer add-ons to your existing clients. It’s much easier to upsell an interested client than sell to a cold audience. If you know that a potential client is interested in a service such as a redesign of their website, you can offer them to redesign the featured images for their blog too.
As a writer, you can upsell clients pretty easily. If you’re pitching someone for blog writing, you can offer additional services such as:
- Optimizing the articles for specific keywords
- Finding/creating images for the blogs you write
- Uploading the articles to the clients’ websites
- Writing the email/social media copy to promote the article
- And more
For each of these, I had an additional price on top of my baseline. For busy founders (especially if they had no marketing team), it was only logical to purchase the whole package instead of just getting a Google Doc with a finished article.
4. Stay firm and don’t apologize
If you’re raising your consulting rates, you’re doing so to provide a better service or product for your clients. Don’t budge and lower your new rates and never apologize for doing a great job.
If you’ve had a client with you for a few months, you may want to increase your rates to reflect the new skills you acquired or to justify your new business expenses. You may think that you need to apologize to your customers because they signed up for a different price, and it’s normal to feel that way.
However, you’re leaving the impression that you’re unsure of your own consulting rates and processes. Give them a choice to stay with you with the new pricing or leave. You want to leave the impression that you have clients willing to pay more.
5. Charge per project instead of per hour or day
If you can’t charge per value (which is ideal), the next best thing is charging per project. You’ll get more money for a smaller amount of work and the client will feel like they’re getting more value for their money.
Most consultants keep a track of all their activities and notes using free project management software. With that, the work becomes more organized. Project management software with a portal for clients simplifies the collaboration process even further.
As I recently wrote, there are numerous ways to price one and the same service. Ideally, you have a value that you know you provide and all of your prices are based on this value. However, some clients just prefer other ways of payment.
If you charge per hour or per day, you have no motivation to get the job done more quickly or with better quality. The longer you take, the more the client has to pay and no one wins in this situation.
Instead, charge one fee for a whole project, e.g. designing a landing page. That way, the client pays for the full package rather than billing hours or days. You’re motivated to get the job done more quickly and the client knows that the job isn’t done until they’re completely happy – and they immediately know what their total cost will be.
Increasing your consulting rates is never easy, no matter what you do and whoever your target audience is. However, it’s a necessary process for growth. Not only will raising your consulting rates help you earn more money, but you will also be able to get better clients as time goes by. If you’re uncertain about raising your consulting rates, try it out with a client or two and you’ll quickly realize that it’s easier than you ever thought. Good luck!