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I've started a year ago with a client at a daily rate of €100. We are starting a new project together and after reviewing my new skills and needs, my new daily rate should be €150~180. How to justify such an increase from a year to another ? Given that we are working with the same techs, but with a lot more of experience.

The question behind this being : what are the main arguments to justify a daily rate to a client?

  • You dont justify anything! You set your rate, and if the market doesnt take it, you go to another market (or client). If you start to put yourself on this position, you are giving him the great chance of taking your price down. You are not a baby needing permission to have a financial life. You have your price, and the market needed to sustain it will come to you... if you first drop the market which wont support you on this – user5193682 Oct 18 '16 at 13:04
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    I would note that if these "new skills" and "a lot more experience" are a direct result from work completed with this client, you may want to cut the client a break because you'd then obviously be benefitting in non-financial ways by working with this particular client. – Scott Oct 19 '16 at 0:15
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I don't feel the need to justify anything - my rates are my rates. If a client doesn't like them, they can hire someone else. I don't need to explain my fee calculations to clients, only what I'll charge them if they hire me. I don't "argue" my rates.

If I'm increasing rates for an existing client, I send an email between projects stating rates will increase as of Month XX, 20XX. If I'm asked why, I'll cite cost of living, inflation, and overall equipment maintenance.

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Naturally, one may always raise rates - even though one risks being replaced or just generally souring the client relationship.

A 60-80% increase could be viewed as extortion by the client unless they acknowledge that your role has changed considerably, e.g. from 'just' producing to architecting solutions and/or managing others.

The only time I succeeded raising my rate during a contract, it was by 33% in a situation where I had accepted a low rate because of financial necessity - so the increase merely brought me up to current market rates. I illustrated this by interviewing at potential future clients, which made the current client accept the increase.

Clients are capitalists; they have a lot more respect for what the market values you at, than your own (more vague) claims. Generally, making them pay a fair market rate doesn't seem to affect the relationship, whereas 'forcing' them to comply with what they feel is a unjustified increase, very probably will have a negative impact sooner or later.

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