Old Client, New Rates. How to Break the News?

[Shaun(OfTheDead)]

Hello.

What's the best way to handle this situation?

I have an old client who used to do a lot of work some years ago, but since about 2009 I haven't really heard from.

Since then, I've upped my rates quite a lot, more than double what it used to be. Recently she sent me new website updates out of the blue by email, and I'd agreed to it before looking back at what I used to do this work for.

So what's the best way to handle it? I'm thinking I could either;
- Call or email today, before starting any work, and let her know that I just checked my records and found that my prices are higher so I wanted to inform her so we'd both know what to expect.
- Complete the updates at the 2009 rate, but when presenting the invoice let her know that in future it will be higher.

I'm certainly in favour of the first option, because who knows when there might be more updates for this job again. But the second option seems like it's the most fair to the client.

Suggestions?

[cpradio]

I would start with the first option, and you may be greeted with hesitation of her wanting to pursue it. When that arises, I normally make an offer to do it at a reduced rate this time (not quite what it was many years ago, but maybe in middle of the two prices), but the next time will be at the normal rate.

Of course, I also only make such an offer, if the client was worth keeping and the surprise of my new rates would lose the client.

[Shaun(OfTheDead)]

That makes a lot of sense.

Okay, telephone time!

[Shaun(OfTheDead)]

Thanks.

[ralph.m]

I would say just let her know that your prices have gone up, and that you felt you should make her aware of that before she decides she wants to proceed. People know that prices go up ... it's the way of the world. If she isn't willing or able to pay your prices, it's probably time to let her go anyway.

Just a thought: When the price of goods and services rises, how many shop owners / service providers give you the old price out of sympathy? I've never seen it happen. Web design need not be any different.

In one of the 5by5 chats with Zeldman, he describes how a client asked for a quote, and only a year later rang back to accept the services. Zeldman informed him that his prices had doubled. Apparently the guy quietly acknowledged the fact and didn't mind at all. Impressive.

[Mikl]

In one of the 5by5 chats with Zeldman, he describes how a client asked for a quote, and only a year later rang back to accept the services. Zeldman informed him that his prices had doubled. Apparently the guy quietly acknowledged the fact and didn't mind at all. Impressive.

I wonder if Zeldman put a time limit on the original quote. I usually do, as a safeguard against precisely that situation.

Mike

[cpradio]

I wonder if Zeldman put a time limit on the original quote. I usually do, as a safeguard against precisely that situation.

Mike

I always do, 30 days is my typical time frame. So I never have that problem, but I still will go out of my way for that "special" client.

[Shaun(OfTheDead)]

I wonder if Zeldman put a time limit on the original quote. I usually do, as a safeguard against precisely that situation.

Mike

Good idea!

--

UPDATE: So a phonecall later, she decided to scale back her website updates and asked for a quote that listed the individual prices of everything so she'll know what to do. Waiting on her response now.

[ramone_johnny]

The fact that your prices have gone up, or that the client is an "old" one isn't the issue. The issue is that you haven't keep in touch.

A fantastic solution to this is to start email marketing.

Keep in touch with ALL of your clients and prospects.

Its a great way to let them know about ...

1. Pricing changes
2. Specials
3. New services

etc etc etc...

Of course, make sure you have permission to send emails to your clients (you can do this with an optin form/confirmation etc)

HTH.

[Mikl]

A fantastic solution to this is to start email marketing. .... it's a great way to let them know about ...1. Pricing changes

Hmm. Not sure I agree with that.

In this case, the problem was caused by the fact that (i) the client did not require any changes to the site for three years after the original work was done; and (ii) rightly or wrongly, Shaun was worried that the client would be upset by the fact that prices had gone up in those three years.

I really don't think that sending out regular emails to announce your price increases would have changed that situation. If the client didn't need any work done on the site, she probably would have done nothing more than glance at the emails, and, even if she had read them carefully, she probably wouldn't have taken in or remembered every price increase that was mentioned.

In fact, I think we've all agreed that there isn't really a problem here, and that the correct course of action was to let the client know about the new prices before starting work. Shaun would have to have done that anyway, regardless of what emails he had sent out in the interim.

By all means, consider email marketing as one tool in your toolbox. But it's a long way from being a "fantastic solution" to this particular problem.

Mike

[shadowbox]

I think what ramone_johnny is saying is that if he'd have kept loosely in touch with the client all these years, this whole situation wouldn't have been so bad, because it's quite possible that the client wouldn't be an 'old, one time gig' client, he would have most likely been taking him up on some of his email offers and generally their relationship would be more solid and 'current'. As would the client's understanding of how his pricing has changed over the years.

The key is to avoid having any 'silent' clients in the first place - so contacting them regularly, even if it's just a 'hello, hows things going?' should be a high priority, especially as it's easier to sell to existing customers. Also if you have a client who is putting regular money and referrals your way, you're less likely to rigidly enforce your new higher rates on them, so again this whole situation seems less likely to ever be a problem.

[ramone_johnny]

I think what ramone_johnny is saying is that if he'd have kept loosely in touch with the client all these years, this whole situation wouldn't have been so bad, because it's quite possible that the client wouldn't be an 'old, one time gig' client, he would have most likely been taking him up on some of his email offers and generally their relationship would be more solid and 'current'. As would the client's understanding of how his pricing has changed over the years.

The key is to avoid having any 'silent' clients in the first place - so contacting them regularly, even if it's just a 'hello, hows things going?' should be a high priority, especially as it's easier to sell to existing customers. Also if you have a client who is putting regular money and referrals your way, you're less likely to rigidly enforce your new higher rates on them, so again this whole situation seems less likely to ever be a problem.

Well said.

Exactly my point above.

I'm glad you get it!