How to Raise Your Freelance Consulting Rates with Existing Clients
Raising rates on existing clients may seem a bit off-putting to most consultants. First of all, you will need to have the nerve to even bring this topic up. And if you courageously do so, you might not get what you want in the end.
However, raising your price is an important aspect of freelancing. If you’re an independent consultant, you won’t receive an annual pay rise as permanent employees do. You’ll have to raise this topic yourself.
In this article, we’ll discuss the right way to raise your consulting rates. At the end of this article, you’ll also learn about another alternative if your client doesn’t agree.
1. Mentally Prepare Yourself First
So many times, freelance consultants are hesitant about raising rates on existing clients because they aren’t mentally prepared for this change themselves. And there is a reason behind that: In biology, they call it “homeostasis”. It’s our body’s way to keep itself stable and avoid anything that could potentially make it unstable.
If you want to raise your prices, you have to be willing to be a little bit uncomfortable temporarily. Remember, your body just wants you to eat, sleep, and survive for the most part. But if you want to grow, you’ll have to disobey your primal instincts and take a risk. You need to understand that raising rates on existing clients is a very common practice all around the world and people have been doing it for ages. So, you’re not breaking the law or doing something outrageous by charging what you’re worth.
2. Raise Your Prices for the Right Reason
Now, the next point is: Why do you want to raise your prices in the first place? Is it because you want to move into a bigger apartment? Is it because you need to buy that new car to impress someone? Or is it because a friend brainwashed you into thinking that you could squeeze some more money out of your clients’ pockets? Unfortunately, all of these are the wrong reasons to raise your prices. The fact is, your personal situation is none of your client’s business.
So, what are the right reasons? Well, if the value that you provide to the client increases, your rates should increase, too. For example, if you’re an SEO consultant who has helped a client go from 300 page visits a month to 6000 page visits a month in 10 months, and consequently, that has increased your client’s revenue by 200%, then you should definitely raise your consulting rates.
3. Change Your Fee Structure
If raising rates on existing clients seems like a daunting task to you, then maybe you should change your fee structure. Let’s discuss some fee structures that freelance consultants use:
- Hourly rate: This one is pretty straightforward. You get paid for the number of billable hours you work. This structure is excellent for small projects in which billable hours are predictable.
- Project-based fee: This involves a one-time fee for the entire project. It could be paid in stages or at the beginning or the end of the project.
- Retainer model: This is like a salary for providing your consulting services on an ongoing basis. There are two types of retainers: Pay for Work and Pay for Access. The former requires you to work on certain deliverables regularly, and the latter doesn’t have any specific predetermined deliverables, but a client pays you to be able to access your expertise as they need it.
- Base + commission: This is a return-on-investment-based fee structure in which the client pays you a part of the revenue you help them generate. For example, if your sales strategy helps a company make an extra $1 million a month, you could charge 1% as commission and earn an extra $10,000.
Now that you know different fee structures, analyze which one works best for both you and your clients.
4. Adjust Your Time to Increase Your Rate Yourself
Let’s keep this one short and simple. If you’re struggling to raise your prices with a client, you need to reduce the time you spend working on their project—and this shouldn’t affect the quality of the output.
For example, if you’re working on a digital transformation project for a client for 20 hours a week for a one-time project fee of $10,000, you could speed up the process and devote only 15 hours to that project every week. This will leave you some time to work on new projects or find new clients.
As mentioned before, the decreased number of hours that you dedicate toward a project should not negatively impact your client’s goals. The idea here is to create processes that help you finish the same tasks efficiently in a shorter period.
5. Get In Touch With an Online Consulting Platform
And if all else fails, maybe it’s time for you to find new clients. However, as you may already know, this is easier said than done. You see, finding full-time or part-time jobs is easier: you can either apply online or seek help from recruitment agencies. But finding freelance consulting work is not that simple. You’ll have to look for companies that, first of all, are open to hiring freelancers, and who understand the value that consultants can bring.
So, is there an easier way to find freelance consulting work? The answer to that question is a resounding yes! Online consulting platforms can help you find new, high-paid freelance projects on a consistent basis. In fact, if you’re a freelance consultant, you should certainly send your CV to an online consulting platform.
These platforms are regularly visited by companies that are actively looking to hire independent consultants. Here at Consultport, we have more than 3,500 consultants on our platform. If you want to join our network, then get in touch now. Your next big project could be just a few clicks away.
