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Negotiating a rate increase

Freelancers often find it difficult when negotiating a rate increase with a commercial client. The situation can arise for a number of reasons:

  • The original contract may now be several years old and is still at the original rate.
  • The scope or degree of difficulty of the work has changed.
  • You now realise you were over-generous at the outset or you are still charging an ‘introductory rate’ designed to capture the client, a year (or two) later.

There comes a time when you want to discuss a rate increase with a client but are afraid to raise the issue. You are reminded when you send in your invoice that you should be charging more, but are afraid it might spoil the relationship to the extent that the client will cut you loose.

It’s not personal

The first point is: it’s not personal. Be professional, don’t get emotional and don’t go into personal details that are irrelevant to the case. You are dealing with someone who probably negotiates frequently. Buyers nearly always negotiate for a discount, and sellers are always trying to maximise their revenue. They will meet somewhere along the scale.

Second: be reasonable with your request. Consider the context – are you dealing with a not-for-profit organisation or charity on a tight budget? Is your client an intermediary – are you working as a subcontractor? Is your client overseas, working in a different economy? Weigh these factors against what they (might) be expected to pay you, then perhaps your negotiating range might need to be narrower. Don’t turn ‘negotiation’ into ‘confrontation’.

leonardoboss / 123RF Stock Photo

What to consider

There are many good resources available on negotiating, but as a starting point consider the following:

  • Wading in with a sense of entitlement won’t help your case. There are probably hundreds of other freelancers capable and available to do this work. Clients don’t like ‘difficult’ freelancers.
  • Good communication is key; this should already be in place. Broach the subject in a different way for each client, depending on the circumstances and your relationship. Use words like ‘consider’, ‘suggest’ and ‘review’ without sounding needy. Be reasonable and polite, but not to the point of sycophancy.
  • Demonstrate the added value you have been giving the client. For example, remind them that you respond quickly, and you have done the odd small ‘freebie’ for a charity they support. And of course, you have never missed a deadline. Consider any other aspects of your service that show your value to the client and mention them briefly.
  • Negotiating means give and take on both sides. Have something extra as a standby in exchange for the proposed rate increase that is easy for you to perform and costs little in time and effort. Remember, your proposal might be met by a (lower) counter offer; allow for ‘wiggle room’ on both sides.
  • Don’t give a deadline for a decision. Give the client enough room to properly consider your request, and come back to you. It’s probably way down their list of priorities, and chasing them could simply irritate them.
  • Finally, if you have to make a decision do it quickly and with good grace. A small increase is better than none, and no increase will still leave you with a client. The situation might change in your favour at a later date.

I negotiated a rate increase with three of my clients and it was the scariest thing ever to begin with. Eventually, I bit the bullet and went ahead.

All three agreed to an increase.

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