#122: How You Know When To Raise Your Rates

“Price is what you pay. Value is what you get.”
–Warren Buffet, American investor

In This Issue:

Editor’s Note: Here’s the second article I promised you last week on raising your rates. I hope it serves you well. But before you dive in…did you attend bootcamp? I’m planning a special issue next week – it’s one month since bootcamp and I want to know what the CP readers who attended have been up to since then. Did you score an assignment? Turn in any specs? Are you still fired up – or is your energy lagging? Ann-Marie Giglio will be back with the final installment in her newbie series, and I thought it would be fun to hear from more of our readers. So if you have a story to tell…please send it this week to: admin@copyprotege.com. And if you don’t…it’s not too late to get something started!

How You Know When To Raise Your Rates
by Monica Day

There’s only one thing more challenging than knowing what to charge a client when you’re just starting out…

Knowing when to raise your rates, and by how much.

Sometimes, even when we hit certain success milestones, there’s a newbie looming in our hearts and minds. Big double-decker fears pop up – what if the client says no and stops using me? What if I charge more and the next project bombs? What if I price myself out of the market?

Here’s the problem with letting your fears rule your price list.

Once you’ve written some successful packages for clients, they will keep calling. And calling. And calling. Then, you’ll start getting referrals. And they’ll start calling. And so on. Once word gets out that there’s a hot new copywriter on the scene – and she’s working at newbie rates – a steady river of projects can become an ocean at high tide.

If you haven’t hit this stage in your career, you’re probably snorting right about now – yeah, I wish…

All I can say is, be careful what you wish for.

A colleague of mine just learned this lesson the hard way. She made a big, ambitious wish. She left her in-house copywriting gig and hung out her freelance shingle. She pursued every single approach that could ensure her success: scored top clients…lined up top copywriters to mentor her…and took on ambitious projects with the potential to be blockbuster controls.

Was she successful? Absolutely. But by the time she figured out that her strategy had worked…and it was time to nudge up her rates…it was almost too late. Her health became compromised. Her copy was still good, but it wasn’t great – and sometimes she was even missing deadlines. She wasn’t happy about that – and neither were some of her clients.

When her skill level – and her value – increased, her rates should have also gone up. But in her mind, it was going to take two years of this kind of pace to reach her goals. It only took a fraction of that time – and the lag in her response to the change in her value about killed her.

In her case, it took many phone calls and a few cosmos to convince her to do the deed. And guess what? When she finally took the plunge – her client didn’t flinch to pay the new rate. In fact, I’m willing to guess they expected it months ago and felt lucky for the long run at the low rate.

Since I can’t cajole and drink with each of you (or I’ll have to go into rehab!) here are some less-pain, more-gain ways to raise your rates:

– Introductory Rate: When you book your first project with a new client, offer them an “introductory rate.” For example, you might say that your regular rate is $4,000 for a package, but since it is a test drive for you both, you’re happy to do it for $3,000. This way, you are sharing the risk of working together for the first time, but you’ve left room to increase your rates as soon as you prove yourself.

– Just Do It: If you’ve been working for the client on a few projects already, and they’ve gone well, you can simply bite the bullet and raise them. Remember, they can always say ‘no’ and you can always decide that you’re willing to keep working for them at the current rate until you can replace them with a higher paying client.

– New Year Plan: It’s the perfect time of year to plan for a New Year increase…simply issue a new price list, or let your clients know now that as of January 1st your new rates will be in effect.

– Performance Bonus: Some clients simply can’t raise the rates. They may have a limited budget or a restrictive mandate from a head honcho…but they don’t want to lose you. Try suggesting a performance bonus or royalty arrangement. These are often easier to sell as the client is only paying extra for you when they are earning more from your copy. Win-win.

Give it a try. Or drop me a line if you have tried other approaches that worked. I’d love to share them here.

Resource Referral: Who’s Charging What…

There are two excellent resources we suggest for setting your prices.

Quick Survival Tip: Keep A Back-Up Email Address

When your entire business depends on your ability to send – and more important, receive email – nothing inspires sheer terror like the following two words: server migration. Or at least, they should.

Unfortunately, I am prone to overconfidence in technology. So when my email provider sent me a notice saying they were migrating their servers, and there would be a minimal amount of “downtime” – but during “non-peak” hours – well, the bells and whistles should have been going off. I should have been making contingency plans. Re-routing my email. Sending my outgoing email with a little tagline alerting clients of the gap in coverage. Woulda…shoulda…coulda…but didn’t.

Fortunately, I’m in a rather strangely Zen period in my life (which I’ll save for another essay). It’s not a drug-induced state, I swear, but very little gets to me these days. So when I lost email for three solid days instead of a 12-hour overnight period…I only had a mild meltdown. Not something that required hospitalization, like I might have a couple years ago.