Seriously. Have you? Many of use are not charging what we are worth. Coaches, consultants, speakers, web designers – most independent professionals I speak with are not charging enough for their services. Some of you know you are not charging enough, some of you do not.
Take a look at your market, are your rates lower than most of your competitors? A lower rate is not a competitive advantage. It may bring you volume but volume is not how you grow your business.
It is important to think about customer perception when reviewing your rates. If the going rate for a web designer in your area (whether that’s regional, statewide, or national) is $90 – $110 per hour and you are charging $85 per hour your pricing is probably in a pretty good range, if you are less experienced than the average web designer. If you are an experienced web designed you should be charging closer to the $110 mark. If your clients tend to be large corporations with large projects your pricing should be even higher.
If your rate is below the average the customers perception will be1. You are not experienced, 2. Your work is not as good 3. You just aren’t worth the money or 4. You are not confident about what you can provide. I doubt this is the perception you want your customers to have about your business.
If you are working with large corporations make sure your pricing is competitive. In this environment competitive, not low pricing is crucial. In addition to your actual experience corporations have almost an unacknowledged predisposition to exclude anyone with a price that is too low. What you can do is offer an average price and add features to your offering. From the customers perspective this is a vastly different tactic and adds benefit for them.
How do you go about raising your price? You raise it gradually. Let’s say you are an experienced web designer and your going rate should be $105, right now you are at $85. Raise your rate to $95. Let your clients know that your rate is going up to $95 as of a date that is 30 days away. Make sure you stick to that date. Do not waffle because a few clients are annoyed. They will get over it when they are reminded of the quality work you do every day.
Stick to the new rate for about a year. Most clients are just fine with a yearly rate increase. More than that and it is hard for the client to absorb.
One year after your raised your rate to $95 raise is to $105. Do not stop paying attention to your rate just because you are at the target amount. You do not want to fall behind again. Pay attention to what rates are doing in your competitive market and raise yours accordingly. After all- you are worth it!
What if you lose a client? They were probably buying by rate and not for the value of your work. A client or two leaving will open the door for clients that are happy to pay your new rate. Remember your net per hour should increase because your rate went up. The bottom line will not be impacted as much as you may think just because you lost a client or two. Never forget- you provide a great product; your rate should reflect that value!