You’ve been in the web design business for some time, and have finally decided you should get paid a bit more for your effort. When is the right time to do this, and how should you communicate it to your clients?
It’s common for both web design agencies and freelancers to have a hard time picking the right time to raise their prices. This comes as no surprise as it can be difficult to judge how to quote clients for work to begin with – even for those who’ve been in the industry for years…
For one thing, your clients – that are increasingly hard to get as it is – are probably not going to be very satisfied with the decision. You’ll also have difficulties figuring out just how to raise your prices without creating additional complications for you and your clients. These obstacles may seem discouraging at first, but with the right strategy, you can manage to raise your web design prices without having to worry about the negative side-effects.
Why You Should Raise Your Prices and To What Extent
Raising prices may seem like a scary move at first, but once you do it a couple of times, you’ll see it’s actually pretty fun. It serves a few purposes:
- Getting you closer to the actual value you’re providing to your client as you get better at what you do.
- Helping you match the growing costs of running a business. If you’ve been in business for 5 years, your expenses won’t be the same as the first year, even if you’re working as a freelancer.
- Eliminating the clients that can’t afford you. If you’ve started off working for cheap – whether doing it for acquaintances or just to be more competitive – you’re not the only one. But as you become more professional, you should get rid of those clients you took in back when you accepted any kind of work you could get. A good way to look at it is the 80/20 rule – 20% of your clients are taking up 80% of your time. These are the ones you should try to stop working with if you can. Increasing your price is going to do this for you. Clients that don’t appreciate you as much will stop hiring you, making space for new ones that will appreciate your level of expertise as it is today, rather than what it was 5 years ago.
When it comes to how much you raise your prices – that’s totally up to you. If you ask for the price for a website design from 5 different web pros, you’ll get 5 completely different prices.
A basic website can cost between $500 all the way up to $20,000. Obviously, different types of clients can afford different prices, but when it comes to choosing yours, try your best to always work with those that pay more.
If $20,000 seems too much for you, as a rule of thumb, determine how much you believe you should earn per day, then multiply that by the time it takes you to deliver a project. Then add 20% for all the unforeseen tasks that are sure to spring up along the way – or simply because it can’t hurt to try. You’ll often be surprised when you find out just how much people are willing to pay if you ask them straight up.
When Is a Good Time to Raise Prices for Your Web Design Business?
Choosing the right moment to start charging more is not as difficult as it seems. You just need to be on the lookout for some clear indications that the time to raise prices is right.
You’re Not Making Enough
Many freelance businesses start off by working for less in order to be more competitive on the market. If your web design business counts among these, after some time you will certainly start feeling you’re not being paid enough for the time and effort you dedicate to your job.
This is probably the best time to go for a price raise. Sure, there will be competitors who’ll be charging less than you, but you’ll also be getting paid more for your time. If you’re running a quality web design business, you should not be satisfied with charging the lowest prices.
After all, there are many clients out there who’d rather pay some extra and get a better product than settle for a cheaper, low-quality service. These are precisely the kind of clients you should be aiming to engage with.
You Haven’t Had Your Prices Raised in Years
Charging clients the same prices for years is bad for business regardless – simply put if you’re getting paid the same amount per project as the year before you either haven’t improved your service & haven’t added value in any way…
Your Clients Aren’t Complaining
If you give your clients a price they consider low, chances are they won’t say anything because they’ll be satisfied with it. In this way, though, you’ll never know just how much more they can afford to pay you.
If none of your clients ever tries to convince you to lower your prices, it’s a clear sign that they’re too low and it’s about time you raised them. As a matter of fact, it’s always better to give your clients a higher price than a lower one. If it’s too expensive for them, they’ll let you know and you can still negotiate a price that will suit them more, but if it’s too cheap, they’ll simply accept it and you’ll miss out on an opportunity to earn more.
The above-mentioned indications are clear signs it’s a good time to raise your prices. Still, it doesn’t mean you’ll go wrong if you start charging more even if these signs aren’t present.
Remember, if you’re doing a good job, you deserve a “raise” from time to time. If you push for a higher price from your existing clients, there are several possible outcomes:
- In the best case, your clients will understand your decision, the fact that you value your own time, and won’t have any remarks to it.
- In the not-so-bad case, clients will try to renegotiate for a better price.
- In the worst case, you’ll lose some clients that are on a budget – but that’s ok because you always want to have serious clients who value your efforts more than anything. What’s more, you’ll be getting more money from the clients who are actually willing to pay your increased prices, so you might just end up with the same amount you were getting before (or even more) while working less.
With that being said, let’s see what kind of approach you can take to start charging more without creating too much confusion for your clients in the process.
How To Raise Your Prices
Raising your prices for potential clients you’ve never worked with before shouldn’t be an issue for you. It’s enough to just update all the relevant info wherever you’ve posted it, like your website, social media pages, automatized e-mails, and online platforms you’re working on. After that, just wait for any new clients that are willing to work with you.
Additionally, if you’re afraid your new prices may be too high, to the extent of possibly putting off the kind of new clients that usually approach you, you may want to add more than just the price change to your website’s online portfolio. Update your description in order to communicate to your potential clients that you offer quality service so that they know that the price is justified.
While raising prices for new clients is pretty easy, communicating your new rates to your older or existing clients may prove to be a bit more of a challenge. This is why you’ll have to prepare a set of strategies to ensure the clients you’ve worked with before will take the price raise as well as possible.
Change Your Pricing Plans
There’s a way to raise your prices without raising your prices – that is, without having your clients notice you did. You can achieve this by adjusting your pricing in a way so that it enables you to be paid more for less work.
For instance, you can change the way you charge. If you’re charging by project scope, you can switch to a per-hour rate. In this way, you’ll get paid for every extra hour you spend on the project, and you won’t have to worry about the dreaded scope creep – you’ll essentially be making money whenever your clients give you those little extra tasks that take up so much of your time.
Remind Your Clients of the Value You Provide
There will be situations in which you’ll simply have to go for a regular price raise. The best way to communicate this to your clients is by emphasizing how much you’ve contributed to their projects with your work.
Whether you’re modifying your price publicly or announcing it to your clients directly, make sure you stress the value of your work when letting them know your prices are going up. Remind them of what you’ve accomplished together, how it has helped you grow together, and how much more your fruitful collaboration has in store for you both.
Which leads us to our next point:
Try to Offer More for the Money You’re Charging
Inevitably, when faced with an increase in price, some of your clients will be expecting even more value in return. After all, if your service stays the same, why wouldn’t they switch to someone cheaper – especially if that someone offers them roughly as good of a service as you do?
This is where your ability to learn and improve steps in. Learning is a lifelong process, and every experience can help you learn more, especially professional experiences. Your true challenge will be to learn new things that will actually add value to the service you provide to your clients.
Learning more doesn’t necessarily mean improving your coding skills (although it definitely helps). Think about anything that could enhance your clients’ projects: SEO, marketing knowledge, video-making skills, web analytics, and more – you can learn about these topics online, and they’ll prove invaluable for your business in general.
Your next step will be to communicate to your clients that you can offer them a bit more than just web design, always with the idea of justifying the price increase. Aside from providing your clients with new services, do your best to try to teach them new things as well. They’ll surely value the added knowledge and user experience – the price increase will feel way more natural in this way.
Test Your Price Raise on Individual Clients
If you’re too afraid a sudden price increase will cause all your existing clients to object, start small. Pick one or two clients that you’re sure will be able to pay your increased prices. Alternatively, go for clients you can really afford to lose in the worst-case scenario.
After a while, start gradually raising your prices for other clients as well. With a bit of luck, everyone will be soon on board with your new prices. If some clients give up, don’t despair: they’re just freeing you some time you can spend on new clients who are actually willing to pay for your new prices.
This will be very difficult if you have a public price list, though, as clients will likely notice there’s a difference. In this case, try increasing your price for new clients only, and inform those you’ve already worked with that, because of your longstanding professional relationship, you’re willing to keep your old prices for them for at least some time as a sign of respect.
Lastly, what if you went for the opposite extreme of shyness, and tried a radical increase in prices while actually aiming to meet your client somewhere in the middle? The method known as price anchoring refers to a way of negotiating for your desired price by coming up with a different, somewhat exaggerated rate at first, and lowering it later on.
For example, if you wish to charge clients $5,000 for a service – and that’s roughly as much as you expect to get paid for it – start by setting your price at $9,000. You’ll most likely get backlash from your clients at first. Your next step should be to ask them for a proposal that would better suit their budget so that you can negotiate. Having set the expectations high already, with a bit of luck, you’ll eventually get to $5,000, or maybe even a higher price.
The key approach when it comes to price anchoring is to set a price that’s much higher than what you really expect, but not too high. If the price increase is too much, your clients may stop taking you seriously. This is why you must let them know that you’re open to negotiating the high prices you start with.
In any case, this method is the riskiest when it comes to potentially scaring off clients because of your high prices. You should be very cautious when considering it, especially if you work with multiple longstanding clients who are used to much lower prices.
Summary – Raise Your Prices Because You’re Worth More
Whether you’re a freelance web designer or running an agency – raising your prices is an important consideration when you’re growing your business and accumulating additional overheads. Charging more doesn’t have to be as daunting as it first seems and if it goes according to plan you can grow your business, provide better service and have even happier (and more grateful) clients than before…
What do you do when you want to raise your web design prices? Let us know in the comments. 💬