Here we are in the pricing minefield once again! Just imagine you’ve finally managed to find the courage to increase your prices, to ask your current clients to accept higher rates and to charge new customers more from the outset. But then the doubts start to creep in. After putting your prices up, you notice that you’re working less, and you feel as though you’re losing out on work.

What should you do? Should you lower your rates?

If you think about it, working less is probably a good thing. The likelihood is that you increased your rates so that you’d be able to work fewer hours while still earning the same amount (or more!).

That said, there are many different factors to take into consideration if you feel as though you need to decide between lowering your new rates and sticking with a higher price. In this blog post, I’m going to run through a few questions you can ask yourself if you’re thinking about decreasing your prices across the board or for a specific project.

How to know how much to charge and whether you should lower your rates

Each individual set of circumstances is unique and should be treated as such. But when it comes to doubts setting in after increasing your rates, there are four questions it might be worth asking yourself before you resort to lowering your prices.

1) How did you arrive at your new rates?

Did you consider them carefully and do all the necessary calculations before settling on your new prices? Or if you’re being honest with yourself, did you end up choosing those numbers on a bit of a whim?

During my Charge with Confidence programme, the method I teach enables you to calculate your rates based on your outgoings, how much you’d like to earn and the amount you’d like to work each month. You therefore know how much you need to be charging as a minimum in order to meet your financial goals and work the hours you want.

Any deviation that leads to you charging less than your minimum rate will require you to sacrifice these goals.

As a result, if you’ve done your calculations and have a numerical basis for charging the rates you’re charging, I would urge you not to be tempted to lower them again. You need to be earning a certain amount if you want to be able to cover your expenses and make a decent living without having to work all hours.

2) Do your new rates reflect the minimum you’ve calculated you need to be charging, or are they set higher than your minimum?

In Charge with Confidence, as well as setting a minimum rate, participants set themselves an aspirational rate. This gives my mentees a range to quote between, which can be a really useful tool for negotiation. If you go in higher than your minimum, you’ve still got room to reduce the cost in return for a reduction in the scope of the work.

If the new rates you’ve proposed are higher than your minimum, you could consider dropping them slightly in exchange for a concession from the client. For example, could you accept a lower rate if the client gives you longer turnaround times? Or depending on the type of work you do, what if the client makes the job easier for you by accepting fewer rounds of edits, providing you with an easier format for the deliverables or simply reducing the quantity of work they’re asking you to do?

In this blog post, I consider all these options and suggest giving the client two prices based on which ones you decide to offer them. This can show the customer that there might be a way to work with you even if they can’t afford your standard rate. It might encourage them to enter into a conversation with you rather than running a mile if the price you want to charge for the full scope of the project is too high.

3) Is this one of those occasions where you’d be happy to accept less than your minimum rate?

I don’t like to advocate charging less than your minimum rate, but from time to time, a project might come up for which you’d be happy to accept a lower rate than usual. Perhaps the project’s really interesting and the client genuinely doesn’t have a big enough budget to pay you more. Or maybe it’s in a specialism that you’re trying to break into.

So long as it’s a one-off rather than a regular occurrence and you’re making the decision from an informed position, it might be that it’s one of those occasions where accepting less than your minimum rate could actually work for you and your business.

Be aware that accepting a lower-than-ideal price for a project will require you to make up the money another way, whether that means working longer hours, charging more for other projects or reducing your expenses to compensate. That said, every now and then, a project might just crop up that makes you willing to do this.

Remember that being able to make these decisions on a case-by-case basis is one of the advantages of running your own business. You get to make the decisions and can treat each client as an individual rather than being forced to stick to a company price list.

4) Do you already have some customers who are paying your higher rates, and if so, can you identify what they have in common?

If you have existing clients paying the rates you want to charge, that means there’s a market out there for them!

If this is the case, before you lower your rates, I would recommend carrying out an assessment of current clients who are paying your higher prices. Look for any characteristics they have in common. Are they direct clients or are they agencies? Do they work in the same industry? Do they require particular skills and services over others? And are they based in a specific geographical location?

All these considerations can help you identify your ideal client. Put together a profile of the customers you already have who are paying you the rates you want to charge and seek out new clients that match this profile.

I would always recommend targeting those clients who need your services and have the budget to pay your rates before lowering your prices.

Many freelancers and small business owners have a tendency to worry after raising their rates. They often suffer from imposter syndrome and ask themselves if they deserve the higher fee, or whether there are clients out there who will pay it. If this is you, please know that you’re not alone and that these feelings are perfectly normal. The important thing is to think about the situation rationally. Remind yourself why you raised your rates in the first place and how you went about calculating your new prices.

If you’d like some support to increase your rates or analyse a recent price increase based on objective calculations and the numbers in your business, you might want to consider taking Charge with Confidence. During the programme, I’ll give you the tools you need to calculate your minimum and aspirational rates, taking into account your expenses, how much you want to earn and how many hours you’d like to work.

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