You know that popular story? The one about the brilliant creative genius who lives in a run-down one room apartment because he or she can’t afford anything more. That artist is starving, but never fear, the story always has a happy ending right? Once the artist dies, their work will be appreciated and they will become a household name and live forever in the art history books!
But wait a minute. There’s something very wrong with this scenario.
First of all, it’s not a happy ending if the artist has to die to succeed. Secondly, I don’t want to live like that. Do you? The story makes a good plot for a novel or a movie, but it’s not something any of us want to live. And we shouldn’t have to. Don’t live this stereotype!
Sadly, many web designers and other freelancers are barely scraping by. The problem is not always that their clients don’t want to pay them well, although sometimes that’s the case. Often, the problem is that the web designer doesn’t really know how to price his or her services or they are afraid to charge what they are worth.
In this post, you’ll learn the signs that it’s time for a rate increase. I’ll share some rate increase strategies and even give you some sites to use as a guideline for setting your rates.
Serious Symptoms of a Rate Problem
Is it time for you to increase your rates? Here are five symptoms that you are not charging enough for your services:
- You haven’t raised your rates in over a year. Believe it or not, I’ve met freelancers who’ve been in business for years and who’ve never raised their rates. Ever. Don’t be like them. An employer would give you regular raises, you need to do that same.
- You’ve learned new skills. As you gain more experience and learn new skills, you become more valuable to your clients. In other words, your skills are worth more now than when you started. Businesses are willing pay more to hire experienced workers.
- You are attracting mostly price-conscious clients. If nearly every single client hires you based on your low price rather than on the quality of your work, you are definitely not charging enough for your services. If your clients always try to negotiate a lower price, watch out.
- You’re having trouble making ends meet on your web design income. As a web designer, you’re a professional. You should be earning a professional income. If you’re working full time and managing your money responsibly, you shouldn’t have to struggle to pay your bills.
- You suspect you’re earning less than minimum wage. I threw this one in because freelancers are notorious for working overtime and not figuring it into the price they charge to clients. Be honest with yourself about the number of hours you spend on work and make sure you earn a decent hourly rate.
Do any of these sound familiar? If so, it’s probably high time for a rate increase. You may be struggling with how to go about raising your rates without scaring away valuable clients. In this next section, we’ll take a closer look at the best ways to handle a rate increase while keeping clients happy.
How to Increase Your Rates
Just do it. Okay, if that sounds too simplistic, it probably is. But seriously, you need to treat yourself fairly, and that means making sure you earn a decent income as a web design professional.
There are several approaches you can take to raising your prices:
- Grandfather in your old clients. In this approach, you only charge your new rate to new clients. Existing clients continue on at the old rate. A drawback to this approach is that if you have several clients giving you a lot of repeat business, your income could suffer.
- Give your prices an expiration date. I’ve started to incorporate an expiration date into all of my proposals. The prices quoted expire after a set period of time (usually 30 days). After that period of time, the prices can be renewed or renegotiated–your choice.
- Send a letter of notification. Many freelancers send a letter announcing their rate changes to regular clients. Be warned that while this is a courteous thing to do, not all clients will appreciate the advance notification. Some may be upset.
- Provide no explanation. This is the simplest way to deal with rate increases. If you think about, it’s the approach many other professionals take. For example, does your plumber or your doctor send you notice when they decide to increase their charges? Probably not.
When deciding which of these methods would be the best fit for your business, a simple and effective way to gauge which is the best method is to chat with other designers in your area or workspace to find out what’s worked best for them in the past.
Of course, none of these methods will help if you have bad clients. So what do you do if you have bad clients?
Fire the Bad Clients
Are you hanging on to gigs that you really should be refusing?
Nothing can drag a freelancer’s rates down more quickly than working for a bad client. You’ll end up doing more work than you expected for a very low rate. You may even have trouble collecting payment for your web design services.
You’re better than that. If a client is unpleasant or difficult to work for, you need to fire them. Here’s a guide to saying “no” to bad clients.
What Should You Charge?
Many web designers earn less than they should because they struggle with setting their rates, and deciding on a price to charge for your services is a complex subject. If you struggle with this, then take some time to read the 12 Realities of Pricing Design Services.
But, at a minimum, the amount you earn should be comparable to the amount you would paid (including benefits) to do the same work as an employee.
You should also know that for many businesses, charging too little is a red flag. If your rate is too far below the market rate, they will wonder what is wrong with your work and why you don’t charge what you should be worth.
If you need a little more guidance, here are some good sources of information:
- From the Bureau of Labor Statistics, Occupational Outlook Handbook, Web Developers. Includes median pay, entry level education, and more.
- From Glass Door, Web Designer Salaries in United States. A nice little graphic showing the median web designer salary in the United States.
- From AIGA, AIGA|Aquent Survey of Design Salaries 2013. Search for average salaries based on position.
The important thing to remember is: you don’t have to starve to be a web designer.
Did I miss any strategies for raising your rates? How do you determine what to charge for your services? Please share your ideas and experiences in the comments below.