How to notify clients your raising hourly rates

I have recently been upping the amount I charge per hour due to software & equipment purchases & fixed costs rising as well.

My client base is strong & I maintain many existing sites at an hourly rate. For a few very consistent clients , this rate is too low.

Im working on a message to send them that explains the rate increase.

I get lots of urgent requests for updates. My idea is to present a new fee schedule with fast turnaround time to factored into the pricing.

" If the work is deemed urgent and the changes are online within 48 hours of the request, you will be billed at 1.5x the new rate "

Any suggestions on how to present this to clients?

With the rush pricing, it will effectively be 2.5 times the rate they presently pay for updates. The thing is, I dont plan on many clients wanting to pay the “Rush” fee… which would automatically buy me a few days on each request before they hassle me about it being done.

Congrats on being in a position to raise your rates! I can tell you one thing from experience, don’t send any explanations about ‘rising costs’ or anything like that. It just makes things more complicated - it’s fine to just tell clients that you are raising rates, and they’ll understand why!

We have also been able to soften the blow to clients by offering them a 90-day period of the old rates. That way, they feel like they are getting a bit of a break.

As for billing differently for ‘urgent work’, it’s guess it’s fine to charge a higher rate but we’ve had a much better time with just charging one rate and not accepting any ‘super rush’ work. Those rushrush clients are painful to work with, and most of the rush jobs aren’t really all that critical - some clients act like they are firefighters and every minute counts, but life is too short to act like that! With bigger clients, they tend to freak out less so we just gravtate towards them and dont bother with emergency/rush jobs…

" If the work is deemed urgent and the changes are online within 48 hours of the request, you will be billed at 1.5x the new rate "

I would not put it quite this way.

Instead, I would publish a fee schedule that included multiple rates with differing deivery time frames. Just like FedEx does. Overnight, 3 day, 5 day.

that is a great idea. never thought of that before.

Perhaps offer incentives on the basis that they agree to increased rates. Of course these incentives would have the lowest possible cost to you and a decent value for your clients.

Ive already let them know its on the way. They also know that I no longer quote/accept new clients at the old price.

Yes, but sometimes I agree with my clients… the rush work is timely & important to post online (for instance, pricing increases, as I maintain many real estate sites). With that in mind, I like to respond to requests as quickly as possible.

Once I notify them of the fee schedule, then they ask me to rush the job, and I fulfill the request in time… I feel that is a fair to both parties to charge the rate.

Publishing this type of rate schedule is a direct statement to those self important rush clients… either give me a few days to get it done, or get ready to PAY!

I dont think this would be appropriate in my situation. I’m going to be very polite, but I do not plan to offer -any- choices to my clients in this message. Very clearly, I am going to state my new fee schedule. They can then decide to pay market price for my time, or else someone else will ( and I have a healthy waiting list ).

No offense, but first lets start with getting the grammar right. LOL.

It’s…“you’re,” not “your.”

I have now fixed my grammar. Sorry, my English went downhill a little since I started spending so much of my day speaking spanish

Raising prices can be tricky … but I pulled it off today.

I had a developer in my office today that moonlights as a heavyweight jiu-jitsu fighter. In person, its not so easy to raise prices… but I stuck to my guns, played my cards right and he agreed to my terms. A 66% price increase from the last time I updated his site.

After that, emailing the rest is going to feel like a walk in the park.

Costs go up, and that’s a gimme, so the majority of folks secretly accept it. They usually DON’T admit this however (I always get ticked when my rent goes up, though I totally understand).

The trick is to spin it to where they’re somehow getting either more value than before (even if they’re not) or at least getting more value than if they went to one of your competitors (which they could threaten you with).

As long as they think they’re still getting the best deal in town and your Customer Service Reputation remains sterling, then you got no worries, even from 900 lb. Gorrila kung fu fighters… heh.

Nice 1st post. Welcome to Sitepoint!

You are probably right. This is more of a comeback to the ‘why did the price go up’ question than what I plan to include in the message. That was one of the cards I played earlier.

The area where I live is currently experiencing an unchecked crime wave. Computer theft has been a hot topic recently. I am investing in a more secure location in order to provide consistent service. If they ask, this is another card I play. I have sat here and watched a lot of talented people leave the area for exactly this reason…

Im not worried about my reputation, its my neck I was concerned with. I’m no pushover but he isn’t either. Tough negotiations ensue :injured:

You’re :stuck_out_tongue:

This is absolutely the way to go. It’s certainly fair to charge different rates, but the original idea, in addition to sounding stilted and stand-off-ish, ("if the work is deemed urgent … " “deemed” by whom, I haven’t deemed anything in years ;-)) would get me upset if I were an existing client.

The message you unintentionally send is, our regular price is now “a when we get 'round to it” rate, you’ll have to pay a premium to get served in a timely manner.

The FedEx idea is brilliant. When I goto ship a package I know why I am paying a particular rate and have a choice.

Urgent and asap were the two that I have used as examples.

Yes, it is a little stand-offish. I have and will continue to offend some while I raise my rates. Believe it or not, I expected this.

Guess what? The same clients that are giving me a hard time about paying more… they are still paying. I waited until the right time to play this card… I have a big waiting list and received some 10 unsolicited job offers in the last 2 weeks, of which I accepted 3.

Thankfully, actions speak louder than words. Im bringing in more people, opening a bigger office and purchasing more equipment… these clients often visit and see the expansion ( many watched me outgrow the existing location ) …

My goal in all this is to streamline the process and reduce delivery time for normal requests down to 3-7 days.

Right now, Im booked about 2 weeks in advance, when Im ‘caught up’ with things… and have a client who pays me already, what Im setting as the rush rate for others. He does so to be top priority, outbidding everyone else.

He expects and receives the best possible service I can provide. He is happy, the site gets compliments all the time and I expect our business relationship to continue to prosper.

I guess you could always give them 1 month on the old rates, raise the price slightly after the end of that month and carry on raising your fee slightly until you reach your ideal fee without loosing business.

This wasn’t necessary. I just tell people the new rate when they ask for work. If they dont want to pay, I will send their passwords. I zip their source files to the _Private folder, instruct them to download the site via ftp, and let them know their files will in no way be stored on my computers from this point on.

My goal isnt to work for clients. We have people backing us to complete other projects, Im getting into building and real estate. Some clients (for instance realtors) will soon be my competition. Thus my approach. They know it too. This is business.

Focus on the positive, not the negative.

Say to your consumer “If we don’t get the job done in 48 hours, we will give you a 33% discount!” or similiar

this way the percieved value is greater and they feel less annoyed if you take more time.

I dont want to say that, because thats not how I am charging people. I plan to mainly be billing the standard rate ( which remember, I just raised 66%) … the rush rate is telling people to chill and get in line or be ready to drop some dinero.

I used to do that, then I reached a point where I said to myself, ‘Hey, why not raise my rate to the point where I don’t have to rush anymore!’. And now I don’t rush.

The best clients rarely send an ASAP request. When I see someone’s client send an email with the subject line ‘URGENT’, it reminds me of the old days.

Im in the process of trying to pinpoint that dollar figure as well. My prices already turn many away, which is good.

People will tell you all kinds of techniques for figuring out your hourly, but I base it on the desired annual revenue I’m looking for for my time. I only bill 10-20 hours a week these days, cause I have a team billing for me but still - I decide what an annual before-tax salary would be appropriate for me rather than comparing my hourly rates to others. People can be really dumb about their hourly rates, and many price themselves way to low or too high. The annualized income, however, is much more consistent and you can get a real feel for the market that way.

Then, take you target salary and divide by 1800 (that’s the factor I use for how many hours/year one will work). After all that, THEN you adjust for competitiveness or other factors.

Start with YOUR goals, then adjust for others! :slight_smile: