01/22/13

Jan
22

What your rates say about your brand & your clients.

This is a lesson that most designers/photographers/coaches/creative types learn the hard way after about 6 months (hopefully not more) of charging bare bone pricing and working night and day.

No more of that!

In my new free mini-guide, The Top 5 Things Most Creative Solopreneurs are Doing Wrong, I talk about rates and how most aren’t charging enough.

These days, people are looking for the premium. They want the best. They want the personal attention-to-detail and the cure to all of their headaches and frustrations.

But, when you’re undervaluing yourself, because you think that people won’t be able to afford you – you’re doing a disservice to yourself and your business.

 

Your rates say a lot about your brand & your perfect clients.

Think about Apple for a second. They have a premium product. It’s not for everybody and not everybody can afford it. But, the fact that it’s not for everybody and it’s seen as a premium product, makes people want it even more.

 

What are your rates currently communicating to people?

In my experience, I’ve found that the lower my rates, the least I enjoyed the project. This wasn’t about the money, it was about how much respect and attention the client had on their own project. When the client doesn’t have a lot of ‘skin in the game’, they’re more likely to be bigger pain in the asses, not respond as quickly as you expect and just generally not respect you and your expertise. That’s the cold hard truth.

When you’re charging a pretty penny for your services, your clients respect your opinion and are 100% invested in working in the project. That’s the way I like it. No Photoshop-puppets over here!

So, what type of clients do you want to be working with?

 

It’s not about how long it takes you, it’s about how much it’s worth for your clients.

It’s important to track your time and be aware of how long a certain task/service will take you to complete.

But, that doesn’t mean that you should simply multiply the hours by your hourly rate.

The important thing when pricing your services is to take into account how important this service is for your clients. How badly do they need help solving their problem? How much pain has it already caused them?

Thinking about your pricing in terms of how valuable it is to your perfect clients is the best way to determine your rates.

So, should you raise your rates?

 

Another way to communicate VALUE to your perfect clients is to LIMIT AVAILABILITY.

Exclusivity is like magic. When people can’t have you, they want you even more. That’s how our brains work – with everything, actually.

This can apply to both products and services.

For services – working 1-on-1 with a small number of clients per month or per year and charging a premium rate is how you limit your availability. You just pull out all the stops for this select number of clients.

For products/programs - you only run the workshop twice per year, so that when it launches each time you know you’ll have the interest.

 

So, I wanna know – are you undervaluing yourself? What types of clients are your current rates attracting? Are these the clients you WANT to be working with?

Take Action: If you think that you need to raise your rates, do it! All it takes is a simple update to the price sheet or website.

Have current clients that you have to inform? Just send them a nice email, letting them know that your rates will be increasing on a certain date. What I’ve found to be true is that they totally understand and agree with why you’re raising your rates. Truth is – they’ve probably been ready for you to raise your rates, because they know you’re worth more than your charging. But, of course they’re not going to be the ones to come out and say it first!

 

Tell me in the comments below:
  1. Have you ever raised your prices?
  2. What did your current clients say or how did people respond?
  3. Did you actually get MORE email inquiries after you raised your rates?

I know everyone out there struggling with this situation would love to know!
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PS. To grab a copy of the free mini-guide I mentioned above, sign up in the box below this post and you’ll have instant access to it!

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  • http://pjrvs.com/ Paul Jarvis

    Every time I raise my rates I get more project requests. Same goes for availability, the less I’m available (due to always being booked well in advance) the more requests for work I get. It *might* not be related though, as when I raise my rates, there’s a reason for it (dictated by the market) and when I’m busier than usual, it’s typically because a big name just had their site done by me so they’re promoting me more than anything I do.

    I have had people actually get MAD at what I charge. But I’m totally down with that, since I realize what I do isn’t for everyone, and if someone is going to go to anger for someone that isn’t emotional, they’re not a client I want any way :)

  • http://www.korywoodard.com/ Kory

    I actually raised my rates after the beginning of the year, and I have gotten more emails. However, I know that I’m probably still charging too little, especially compared to how much I actually need just to pay bills. I’m worried to raise my rates though because I feel like most people are still penny pinching.

  • heatherkanillopoolos

    As a wedding photographer, I stressed A LOT before raising my prices, as each price increase is usually an increase of several hundred dollars or more. But I’ve found that as long as my site is speaking to my ideal clients and my work is what it needs to be, it hasn’t hurt me at all to raise my prices! :D

    I’m actually planning on working out some new pricing this afternoon. :) I’m halfway to my wedding goal of the year, and feel like I could stand to slim down the inquiries and make more per wedding!

  • http://www.nikkigroom.com/ Nikki Groom

    I think a lot of this is about HOW you raise your rates. Tell your list, blog about why you’re doing it, offer the lower rate for a limited time, go public about your reasons.

    Check out this post by Alexandra Franzen in 2010 :: http://www.alexandrafranzen.com/2010/09/22/raising-rates-and-my-philosophy-on-m-o-n-e-y/

    And this post about a year later :: http://www.alexandrafranzen.com/2011/11/14/1000-a-day-how-dare-you/

  • http://twitter.com/TheSilverSpool The Silver Spool

    I am in the process of raising my rates. I really needed to hear this today, as it’s something my husband has been telling me for a while! I was worried I would lose customers because of a rate increase, but your perspective has made me re-think the WHY behind the increase. I KNOW I am worth more, but am still struggling on that fine line between making my brand known and making ends meet for the whole thing!

  • http://www.tomorrowtodayblog.com/ Rita

    while i agree with your thoughts on rates (in this post and in your mini-guide) – i think this is only half of the issue. of course you should charge based on the importance of the product and be exclusive and raise your rates to reflect what you are worth. and of course it’s awesome when you raise your rates appropriately and people are ok with it/happy about it.

    to really address this, i think you need to talk about determining rates in the first place – a much less exciting topic than raising rates, for sure. but in this service-driven online industry, how do you really determine your worth? particularly when you are starting out and offering a potential intangible?

    is there a sliding scale based on experience? should there be? in this thread alone you have commenters at both ends of the spectrum – does the lower priced designer undermine the more experienced designers ability to charge fair value? how do we teach potential customers how to expect what to pay?

  • http://www.jenvertanen.com/ Jen V. :: Biz Strategist

    What’s cool is that as business owners, we get to train our clients what to expect from us.

    What’s scary is that as business owners, we get to train our clients what to expect from us.

    Pretty cool, heh? lol.

    What I mean is…don’t undervalue what you bring to the table. Know how much time goes into creating your offering, know the value it brings, be confident in that value, and then charge accordingly.