Increase hourly rate in ongoing projects

Question

I've been freelancing for a couple months now and since I was just starting out I set my hourly rate fairly low. (On the popular freelancing websites)

This has indeed helped and got me my first few clients - all of them satisfied with my work - and a couple of them asked me to keep working with them, in a flexible, hourly basis. (No contract/agreement)

For multiple reasons, I believe that increasing my hourly rate will allow me to provide better quality to my current and future clients.

How do you communicate an increase of rate to existing, ongoing clients?

Answer 1

If you give them prior notice of the increase (e.g. by sending them an email/letter stating something like 'Please note that from 1st June the hourly rate for maintenance will be £xx/hour') then they will probably be fine with it. If you want, you can add that any work booked in before such-and-such date will be charged at the current rate, subject to a maximum of xx hours.

Ultimately, you have to ask yourself - if I charge this and they go elsewhere, will I still have clients? If I DON'T charge this, will I feel that I am being ripped off when working for them?

(I'm speaking from about 10 years' experience of self-employment when I consistently undercharged!)

Answer 2

I've been freelancing for 35 years, so obviously I've had to deal with multiple rate increases over the years.

Rather than increase my rate every year or even two years, which seems somewhat petty, I usually wait a few years and increase my rates by a higher percentage.

I have both long-term -- some more than five years -- and short-term clients (a few months). I will typically increase my rate for new short term clients first, but not for any current ones (either short-term or long-term). Such increases will typically be 20% or so over my previous rate. Of course the new client won't know what my previous rate was. Eventually the short-term clients billed at the now lower rate will all drop off.

About a year later, I will send a letter (well, now an email) to my long-term client(s), saying that I have increased my rates and have been billing such and such an amount over the last year. But since they are a long-term client, I will be billing them at only 90% of the new rate. I am still getting a substantial rate increase for my long-term clients, and they see they are getting a better deal.

I've never had a client drop me because of my rate increases as far as I know. Then again, I'm probably billing a little bit under market.

Answer 3

I am working as freelancer from last few years. For me there are two main key points for rate increment.

Rates increment are related more to quality of work you are doing....

My work as a UI/UX designer two years ago was not that good. So i went to learn a lot when i was sick (last 6 months) increased quality of my work. Or even shifted my career from a Web Designer (Designer, coder) to simply UI/UX Interaction Designer.

There are sets of rates for a specific category of work, if you try to jump out of it, you will lose work.

Second is your quality of work. If you produce quality work, and you want to increase your rate even 20%, your clients who admire you will be happy to hear unless your clients prefer saving money over quality...

Increasing rates for an ongoing project is not that good option unless the project specs or revisions have increased a lot. I don't suggest you to increase rates for ongoing projects. Even if you want to, you should not go above 5%

Answer 4

As a freelancer, you need to ask yourself how often you would increase your rate and by how much. If your clients are satisfied with your work and you only increase your rate every year at a reasonable rate, then naturally your clients will be ok with it. If you are constantly increasing your rate, your clients may become annoyed and decide to go elsewhere. So I'd be very cautious when you decide to roll out increases in your rate.

When I was first starting out, I didn't increase my rate until after 2 years because I felt like my work was evolving and getting better but was not enough to warrant a rate increase. Once I decided I wanted to increase my rate I simply notified my clients about 2 months before the increase, then notified them that there would be a 3% increase every year at the same time. So notifying the client and giving them a schedule to follow will be easier for clients to get on board.