How to Discuss Price Increases With Your Freelance Clients

The web was once a bastion of free and cheap things. Free tools and services catering to professionals and novices were abundant. And even things that cost money were relatively affordable.

This climate has been a boon to freelancers, agencies, and clients. WordPress and its ecosystem are prime examples of this in action. A free content management system (CMS) with a thriving market for themes and plugins has boosted many businesses. Meanwhile, third-party services like hosting and APIs allowed us to do more without spending a fortune.

That meant lower costs to pass on to clients. It helped keep our services more affordable to small and medium-sized organizations and created the expectation of cheaper websites.

Those days appear to be ending (if they haven’t already gone the way of the dodo). WordPress product pricing continues to increase, as do the other services we rely on. It’s all making for a difficult conversation with clients.

No one wants to pay more for the same thing. But it’s an unavoidable part of the current landscape. So, how do you approach clients with the bad news?

It’s all about preparation and communication. Let’s explore ways to take the sting out of the discussion.

Don’t Take Price Increases Personally

Based on experience, my first piece of advice relates to your psyche. I like providing value to my clients. I realize that small organizations are on a limited budget. Thus, I often took price increases personally.

My biggest concern was whether a client would scoff at the increase or leave. I’ve never enjoyed upsetting the apple cart.

Plus, freelancers aren’t faceless entities. We’re people who tend to enjoy working with others. That makes raising prices awkward and even guilt-inducing.

But my business is small, too. I can’t afford to absorb increased costs for the tools and services I use to serve clients. The only realistic option is to pass some (if not all) of those costs to clients.

I’ve had to remind myself that I can’t control what hosting companies or plugin authors do. A price hike is well within their rights. I’m just the messenger in such scenarios.

Raising my rates is also a mental hurdle. I’m careful to avoid doing so in consecutive years. But time and expertise are precious and finite commodities. There’s something to be said for recognizing the value you offer to clients.

The lesson is that price increases aren’t personal. Some clients won’t be happy (well, no one jumps for joy). However, most understand that’s part of the deal. They are willing to pay more to work with someone they trust.

Create a Plan for Implementing New Pricing

You may have legitimate reasons for raising prices. However, you’ll also need a plan to implement them effectively.

A haphazard approach will frustrate clients and damage relationships. For example, doubling prices without prior notice won’t go over well. Neither will complex pricing formulas that are difficult to understand.

Creating a plan will pay off in more ways than one. You’ll boost revenue and avoid a customer service catastrophe. Consider the following:

• The services that will see a price increase.
• The reason behind the increase.
• When the change will go into effect.
• The clients impacted by the changes.
• Whether there are any exceptions or potential conflicts with current policies.

Think about all the factors involved with your decision. Try to envision what might go wrong. Then, create a plan that’s fair for everyone. It ensures a smoother transition with fewer headaches.

Give a Simple Explanation of the Increase

Have you ever received a bill with higher prices and no explanation? It happens all the time, and it’s frustrating. You might suspect the company has something to hide.

A simple explanation of why prices are increasing is meaningful, whether the increase comes from you or a third-party service. And it doesn’t have to be wordy.

Condense it down to a few sentences, such as:

Our hosting provider has recently raised their prices. This change means your yearly hosting package will increase by 5% to cover those costs.

Hi, I wanted to let you know that my hourly labor rate will increase to $xx.xx, effective 1/1/xx. I understand the impact of price increases and don’t take them lightly. However, the change is designed to cover the increased complexity of website maintenance and demands on my time. Please let me know if you have any questions or concerns.

This is where we can separate ourselves from larger competitors – or the world around us. A personal touch is part of the formula for long-term success. Freelancers have an advantage when it comes to building close client relationships.

How to Handle Negative Feedback

As the old saying goes, you can’t please everyone. You might run into a client who gives negative feedback about higher prices, even after you explained your side. What can you do?

Start by reiterating the reasons for the increase. Show empathy by stating that you understand their concerns. Offer to answer any questions on the subject.

It’s also worth pointing out that the change impacts other clients, not just them. This could reassure a client who feels singled out.

What if that’s still not enough? That makes for a tough decision. Much depends on how much you value the client.

A client who is low on revenue and high on complaints may not be worth the trouble. A “take it or leave it” response will force them to decide. No one likes to lose clients, but some aren’t as critical to your business.

Clients who generate significant revenue for you are another story. Perhaps you could implement price increases more slowly or work out a mutually beneficial deal. That lets them know you care about their well-being.

Regardless, save your best deal for your best clients.

Take the Pain Out of Price Increases

Price increases are a delicate subject for freelancers. Our profit margins are tight, and each client has value. Thus, it’s OK to be concerned about their impact.

That’s why solid planning and communication are essential. They allow you to increase prices with confidence and better manage client feedback.

Big companies struggle to do this effectively. Your success in this area will strengthen client trust. They’ll see you as an honest broker who respects their needs. That can only mean good things for your relationship.

Eventually, every freelancer will need to raise prices. Doing so the right way can take the pain out of the process.