Design Domination Podcast Episode #144: How to Raise Your Prices and Keep Your Clients

Raising your prices as a freelance graphic designer is vital for a viable, profitable creative business. Find out when you should raise your rates, how to raise them, how much to raise them and what to do if clients react negatively when you do.

In this episode of Design Domination, I’m getting into how to raise your rates and keep your clients while doing it.

When to Raise Your Rates

New Year

A new year is a good time to take a look at your rates and also to raise them.

Rising Expenses

Costs for all kinds of things go up every year—internet, software, phone bills, electricity, etc.—but oftentimes graphic designers forget to or are afraid to raise their own rates.

I know. I’ve been guilty of it in the past.

I remember even looking back at one client’s rate and losing my mind when I saw that I hadn’t raised their rate in five years!

Over time, as your expenses increase, if you don’t raise your rates, you will be less profitable.

Increased Skills

Also, over time, your skills get better. You get faster. It only makes sense to raise your rates to reflect that.

You’re providing a better service to clients. You’re getting work done faster. That benefits them.

New Skills, Services or Specialization

It’s also a good time to raise your rates when you have new skills or services to offer or you’ve decided to specialize. When you specialize in a certain type of work or industry, you deepen your expertise in that area, which benefits clients.

No Questioning of Your Pricing

If clients always accept your rates without question, then that could be a sign it’s time to raise your rates.

Full Schedule/High Demand

If your schedule is full and you’re in high demand, it’s time to raise your rates.

If you’re overworking yourself, you need to raise those rates and cut some hours. You can work fewer hours and get paid more.

Increased Scope of Work

If the scope of work for a project has increased, you should increase your price for the project. More work means it costs more. This should always be conveyed immediately to the client.

Length of Relationship

Consider the length of the relationship with the client. If you’ve worked with a client for a few years and never raised your rates, it’s time.

Your Value

Another point to consider is the value you bring to the table.

In some situations, you may be the sole freelance designer for a client who has no in-house designer. I was in this role for several clients over the years.

If that’s the case for you, think about how much it would cost them to employ a full-time designer. Not only that, but they’d have to pay them benefits too. That’s a lot of overhead. That’s probably a lot more than they’re paying you now.

So consider that, especially if they treat you like an employee, and I don’t mean the IRS classification of an employee versus a contractor either.

I mean that they expect you to give them priority over other clients, that they expect you will be available any time they have something for you to do and so forth.

I’ve had several clients over my career who treated me like this. It really pissed me off when I thought of it this way because it’s true.

They should be paying for that!

I even had one who used to work where I did and she would call me at my full-time job!

That’s a lot of nerve!

And oftentimes it’s the clients who try to nickel and dime who treat you this way.

Just Because

“Just because” is also a reason to raise your rates.

You don’t need a reason. It’s your business. If you want to raise your rates, you can at any time.

You are in charge.

When to Not Raise Your Rates

Now even though you are in charge of your rates and can change them whenever you like, that doesn’t mean I recommend that.

Don’t tell clients you’re raising your rates around the holidays.

Don’t raise your rates with them if you know they already have financial difficulty.

If you’re unable to deliver work on time or clients are unhappy, it’s not the best time to raise your rates with them at least.

You also don’t want to raise rates on a client that you just started working with a month or two ago just because you’re raising rates in the new year, for example. That could make them feel like you gave them a lower rate to hook them, then did a bait and switch.

Mindset Around Raising Rates

Now what really stinks is that most designers shy away from raising their rates, especially when it’s early on in our career.

We designers are usually empathetic people who hate confrontation. The money conversation usually feels awkward. I remember how I used to literally sweat and squirm while talking to clients about money.

What if my work isn’t good enough to justify a higher rate?

What if they don’t think your work is worth it?

What if they go in search of a cheaper designer? Well, just FYI, they can always find a cheaper designer—at any time. They are everywhere, and I’ve actually had clients come back after the experience with one.

None of these are fun thoughts, and they all stem from our fears.

Let me tell you… I’ve made a lot of good decisions in my life but I’ve also allowed a lot of “what if’s” and fears to make decisions for me.

It’s nerve wracking. You feel out of control.

You end up making decisions on bad data, things that are not reality.

You end up not taking action because you’re scared.

You may make up excuses so that you don’t take action because action is uncomfortable.

  • “I can’t raise my rates.”
  • “My work isn’t good enough.”
  • “My clients will leave.”

I’ve said all these things.

So first I want to help you put things into perspective. Think about your own behavior when it comes to companies who raise their rates—your internet provider, Adobe subscription, phone bill, stock photo account, electricity, etc.

Keep in mind: you usually don’t even have any personal connection to these companies, like you do with your clients. But when they raise their rates, you may stay with them. That’s because:

  • You’ve come to know what to expect from them, and the fear of the unknown is worse.
  • You don’t have time to research other choices.
  • It’s easier to stay with them than to change.
  • They may have few competitors, or you have few other options.
  • You’re OK paying more because you find the service to be worth it.
  • You agree with their values or mission, so you’re happy to pay more.
  • Maybe they’re a local business, and you’d rather support a local business.

Now think about your interaction with clients. It’s very personal. Most clients want to work with you because you do good work or because they like your work ethic, personality or values—or all of the above. That’s hard to find.

They also don’t want to necessarily spend the time (or risk) of working with someone new and getting used to their process or them getting used to theirs. There is a “getting to know you” time investment up front.

So why are your rates any different from these other companies that you have no personal connection to?

Why are you willing to pay more for their services so easily?

The other thing to think about is that clients don’t want you to go out of business. They want you to stay in business, so that you can continue to serve them. So it’s in their best interest for you to make enough money to stay in business.

Assessing Your Design Rates

Before you go raising your rates, you can do some research. You can check out several resources for going rates for your types of design work such as:

You can also ask people who hire for this work in a particular industry what they typically pay for certain types of projects.

Whatever you do, don’t compare yourself to designers on Upwork, Fiverr or other websites like that. A lot of designers will lower their rates to get work, even if it’s not profitable for them. They also tend to charge hourly, which isn’t a good way to price because it bases your fee on time, not your expertise.

You can also ask other designers. But keep in mind that differences may mean that you need to charge less or more than them, such as:

  • location,
  • standards of living,
  • the quality of work,
  • the type of design work,
  • a specialization in certain types of work,
  • what is included with the work,
  • expenses.

So it’s not an apples-to-apples comparison.

How Much to Raise Your Rates

Assessing how much you need to charge will tell you how much you need to raise your rates.

So many designers are grossly undercharging. I know of several designers who were always busy but weren’t profitable. They didn’t pay attention to their expenses.

You’ve simply got to know what your expenses are. Not only that, you’ve got to account for the increasing cost of living each year.

A good guideline for raising rates is between 5% and 20%, depending on how underpriced your current rates are.

How to Tell Clients You’re Increasing Your Prices

Now let’s talk about how to tell clients you’re raising your prices.

Raising Prices for New Design Clients

Raising rates for new clients is much easier. You just give them your new rates. They don’t need to know that it’s a new, higher rate than from what you’ve been charging.

This also gives you the opportunity to test out new rates. For instance, if new clients don’t object, that could mean you could potentially charge even more.

Raising Prices for Existing Clients

Approaching existing clients about rate increases can feel scary because you fear they will find another designer—and they might. But that’s usually not the case. That’s our fear talking most of the time.

When you go to raise your pricing with existing clients, there are a few things to keep in mind.

If you’ve got a client or two (or three) who you really need financially, you may want to raise your rates in smaller increments over time.

You may also wish to include something a little extra that won’t add to your workload, such as a consultation call every so often or including extra revisions for clients who make tons of them. Give them a higher flat rate instead of charging hourly for all their excessive revisions.

You could simply—for each new project—start providing pricing that is slightly higher than it’s been in the past and also add a second, higher-priced option that includes a bit more value to them, like getting it done super quickly instead of at your usual timeframe.

This could be a VIP Day option, where you and the client designate a day or days to work together. Sarah Masci and I talked about VIP Days.

But it doesn’t have to be. It could just be a lower price with a longer timeframe and a higher price with a rush timeframe.

What all this does is help give them a choice, rather than just saying no.

I like to call this an “out” or “fallback.” It has helped me test the waters with higher pricing in the past.

You can also offer a choice of three packages, where the highest one really exists only to make the other two packages look like a deal. This is price anchoring.

Think of what you can offer that will add value to clients and offer them more convenience.

Also consider options that they didn’t ask for that you think would be beneficial and help them get the results they’re looking for, such as managing more of the project (the printer, the mailhouse, etc.) on their behalf or creating social media templates that go along with their new branding.

So you could raise your rates more with new clients and less with existing ones.

Reiterate Value

Making mention of the increased value to them will reinforce to them how good they’ve been getting it. So that could be:

  • Your increased experience in a client’s industry,
  • Your increased skills in the type of work you do,
  • Your long-term relationship with the client,
  • The fact that you haven’t raised your rates in a couple of years or whatever it is,
  • That you’ve given their projects priority,
  • You’ve done quality work for them,
  • Always been on time, etc.

Give Notice

You want to give enough notice, usually 60 days to 90 days, (it could be longer than that though) before you raise your rates.

Giving sufficient notice is the courteous thing to do. It means you’re not springing the new rate on them without notice or time to think.

It gives them time to potentially rebudget if needed. If you know when they do their budgeting, give them notice before that time.

It also gives them some time to mull over and make a choice, which is the respectful thing to do, as opposed to putting a bad taste in their mouth by making them feel like they have no choice.

It also gives them enough time to find someone else if they do decide to go elsewhere. There is always the chance of this happening. In my experience, this rarely happens except with clients who choose you based on price alone.

Include It in Contracts

You could potentially include in your contracts that you will increase your rate x% every year or whatever time period. That puts them on notice and makes the conversation easier when you go to do it.

Keep It Short and Sweet

You also usually want to keep the message short and sweet. You could say something like:

From time to time, I adjust my rates to account for inflation or because I’ve increased my skills/experience in this industry (whatever the case may be). Doing so means I can continue to provide you with quality service and even better service.

As of [date], my rate will be $[amount] per hour/$[amount] for our usual project [whatever the case may be].

If you have any questions, please reach out.

I look forward to continuing to work together.

Don’t make a big deal about it.

I like to end it by saying “Please contact me if you have any questions” and “I look forward to continuing to work together” as opposed to asking them if it’s OK or assuming it’s going to be a problem for them.

You don’t need their permission, so this keeps you in the driver’s seat. But if you are afraid they might balk at your higher rates and leave, then this usually invites the opportunity for them to voice any concerns.

This is going to happen at some point and maybe a few times. You may simply outgrow certain clients.

Otherwise, if you’re happy to be rid of them if they don’t want to pay the higher prices, then you can simply add that you will recommend another freelance designer who may be a good fit.

Put It in Writing

It’s OK to have a conversation by phone. If you do that, follow it up with something in writing.

And if you do talk on the phone, please state your new rates as a statement that ends in a period, not a question mark. You are not asking their permission.

I remember how I’d sound so wishy-washy about it when talking to clients, like I was asking their permission, like they were running my business, not me.

Clients Who Resist Paying Higher Rates

I remember this time that the CEO of a nonprofit who had been a client for like 15 years—and one of my biggest clients t00… When I said I was raising my rates and gave some estimates, he had the audacity to ask me for a meeting with him and the board of directors because he frankly didn’t understand how I charged and wanted me to explain it to them.

I fired them immediately.

That was a huge sign of disrespect that I couldn’t stomach.

I didn’t need to justify… You don’t need to justify your rates to anyone ever. How you come up with what you charge is your business.

You are not an employee agreeing to a paycheck. You are in charge of what you charge!

What other client or customer tells a business what to charge?!

If you get a reaction like I got that time and you can’t fire them because it would put you in financial distress, then create an exit plan. Leave their rate as it is and work on getting new, better clients at your new rate in a period of maybe two to six months.

There are always going to be clients who are so focused on price that they will go elsewhere when you raise your rates.

It does not mean you did anything wrong.

Charge the Same for Less

Another strategy with clients who balk is to simply charge the same and include fewer designs or revisions in your estimates.

Don’t Be Afraid to Raise Your Rates

You are in charge of your rates. Only you know if your rates are profitable or not.

Shying away from the conversation of raising your rates will only keep you from being able to make more money. It will keep your business stagnant.

Raising your rates should feel somewhat uncomfortable—and you’re probably still undercharging.

Please don’t be afraid to get out of your comfort zone and be assertive. I know what that’s like, and it will keep you stuck.

Don’t live in fear of losing clients. Then you are always at their whim, which means they’re running your business. If you stay at the whim of what clients are willing to pay and don’t ask for what you’re worth, you might as well have a job.

There are always other clients out there who will value what you do and happily pay your rates.

And it feels so freaking good once you have this conversation and start charging your new rate!

It’s not just a win for your business. It’s a win for your confidence.

Remember: Your rates are a statement, not a question.

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