Across the gig economy we hear a lot of advice about standing up for fair compensation and not allowing thrifty clients to have their way with our time and mental stability. It’s easy enough to tell that schmuck who’s been ungratefully bossing you around for the last six weeks to take a hike (in a professional manner), but what if the people in question really aren’t nightmare clients?
What if these clients were a couple of your early breaks that really helped you get your business off the ground and now unfortunately take up more of your time than you can justify? This is a bit of a gray area. You don’t owe it to anyone to work for less you’re worth at any point in your career, but a bridge left standing is almost always preferable to a scorched scrap heap.
We’ll take a critical look at how you can strategically weigh your options and raise your freelance rate amidst these delicate circumstances.
Related reading: How To Salvage a Bad Client Relationship
If you raise your rate, are you okay with all possible outcomes?
Many solos tend to think a little out of order when looking to raise their rate. Many of us have a hesitation that kicks in when drafting that email to client zero — and it’s a good instinct to have. Before you commit to the idea that you need to raise your rate on all of your clients, consider the value of the relationship in question and if you can accept the prospect of losing it.
Matt Keener, Entrepreneur contributor and president of Keener Marketing Solutions includes “my rates are increasing” in his important list of “5 Truths It Rarely Helps to Tell Your Client,” and for better or for worse, he’s right. There is a status quo psychology in place with your longstanding clients that generally doesn’t work to your benefit.
“Demanding a rate increase rarely works,” says Keener. “In fact, you’re likely to lose the relationship, especially if you’re dealing with a small business.” Rather than dropping this bombshell, which will almost always feel “out of the blue” to your clients, it is often best to creatively propose new upsell services to these patrons.
Obviously some cut-rate clients are not looking for any additional services and if this is the case you need to ask yourself if the work you are doing for them is unsustainable and if losing them as customers is an acceptable outcome. If the situation is less than ideal but not dire there may be a couple others angles you can take.
Change your pricing structure
A good middle ground to explore before making any radical moves is to propose a change of compensation structure to these clients. Some of your legacy customers are happy to pay more to get more but just need the options presented to them in a way that feels attentive to their needs and concerns.
One way to do this is to tell these longstanding clients that you are now offering services in a monthly package format. For $500 or $1000, or whatever you believe is reasonable here, you offer your basic service, which includes the work you generally do for them plus additional backlink work, social media optimization and newsletter management — all things they really need to grow their businesses.
If your rate is higher, but not unreasonably so, and if your reasons are good for these changes on their end, your client will look foolhardy not to give your upgrade an earnest consideration. Refusal potentially also gives you a good out if your client is not truly serious about expanding their operation.
You may even wish to frame this as a “special deal” you are only offering your best clients. The appreciation you voice for their loyalty helps grease the wheels and if these clients view you as a special value provider, they may green-light an elevated rate package without even much nudging.
Change your deliverables
Another option is to explain that you’ll have to deliver less for the same budget. This may work when the client really does understand your value and would like to use you more, but their own budget limitations are severe. So you can let them know for the same budget going forward, the deliverables will be revised.
This has the added benefit of emphasizing that you aren’t just trying to squeeze them for more money but make decisions based on the value of your time and the value of what you provide. Also, when they hear this proposal, and your thinking behind it, the client may suddenly find that they do have the budget to keep up the same set of deliverables.
The last resort: take it or leave it (or just leave it) —
You tried to avoid this, you really did, but either your client has brushed off all attempts you’ve made to make their business viable for you. Things need to change — you’ve calculated the risk and a “take it or leave it” approach is all that’s left to you.
A tell-tale sign that this route is appropriate on your end is that your pipeline is filled and this low-value work is actively preventing you from moving on to these higher value clients. If you know this to be the case, then you can breathe easy with the knowledge that you are making the right move. However — and this is a big however — your client doesn’t need to be punched in the gut about this.
You do not need to tell these clients that they are a waste of your time — you do not need to call them “cheap,” question their business practices or make them feel badly about the way they didn’t fully value your work.
“I wanted to let you know that I am moving on to other opportunities. I plan to complete all of our outstanding assignments including X, Y, and Z, and our last day of work together will be May 19, 2015.”
Leave your clients set up for success
That’s really all you have to do, though Robert McGuire at McGuire Editorial advises going the extra mile to end this relationship with the client feeling like they’ve been set up to succeed on their own — not like they’re looking around at a mess. They’ll just associate you with the mess instead of remembering the good work you did.
A really smart move at this point is to recommend other people in your network to that client. “I had a one-year relationship wind down partly over the budget,” McGuire says, “and I spent the last month making sure to establish colleagues with that client who were earlier in their careers and could consider those rates.
“My network is valuable, but withholding it from that client wasn’t in anyone’s interest. The managers there were grateful for the hand off, my freelance colleagues appreciated it, and now a couple years later, when we’ve all gone on to other jobs, we’re all still friends and recommending work to one another. In some ways this isn’t the end of the relationship so much as an opportunity to strengthen it in new ways.”
On the same subject: Expand Your Sphere of Influence, Expand Your Business
Keep the exchange dignified and do all you can to uphold your client-contractor obligations in the period in which you phase yourself out. There is no need to assign blame and no reason to shut the door forever. These clients may come back to you at a later date, having reconsidered your new pricing or bring you on for another project in the future.
Leave the door open for future collaboration but be cautious
This last point is an important big picture consideration. Keeping all of your connections warm is a vital best practice for the solopreneur and there are definitely some good reasons not to forsake your lower-paying customers even as you grow (financial blogger Rajiv Sighamony offers some really valuable insights on this in a quick and pithy piece he wrote for Hongkiat).
However, keep your experience with these clients fresh in your mind — all things considered, would you really want to work with them again given the chance? Was the need to raise your rate the only reason you wanted to make a break for it, or were there other factors? Just because the opportunity arises doesn’t mean that the problems you had the first time won’t be there the next time.
More about working with clients:
- 4 Clever Strategies to Help You Land New Clients
- Building a Virtual Team To Serve Clients – Advice From An Agency Operations Expert
- The Path To Higher Paying Clients – Insights From the Marketing Mentor
- Freelancing Is A Two Way Street — Qualify Your Clients!