Is there a pattern we can use to increase our price along with experience?

Question

We all increase our hourly price based on our experience. Is there some pattern we can use when deciding how much we will increase hourly price?

For example, we start with $20 per hour as a total newbie. Then with each project we finalize, the hourly price is increased by $1. Does this sound illogical?

My point is that the hourly price must increase along with experience. I know that some like to increase hourly price with dollar position on the market, and with some other economical circumstances. Some even choose their hourly price based on the wealth of the client (this is allowed of course, but this increase always has some pre-set percentage of increase).

Is it possible that some smart head has already written about how can we calculate personal price growth as we are becoming more wanted and more experienced?

PS. If someone disagrees that our price should grow with our experience, please write about it. I would like to hear your words as well.

Answer 1

While it is generally true that a more experienced person can command a higher rate than a less experienced person, pricing is much more complex than that, making such a formula impossible. Consider just a few of the following additional factors that affect price:

• Location
• Upper limit that the market will bear
• Urgency (some people will pay more for speed)

And these don't even include the obvious point which is that "experience" isn't necessarily transferrable to the next project. For example: if I am a web developer, my last project might include integration with Google Maps. On the next project, perhaps mapping isn't part of the project. So I have generally gained some experience, but some of it isn't at all applicable to the new project, and is therefore irrelevant to them.

Answer 2

Price can be proportional to someone experience if that brings more value to the client, but the former is not directly related to the latter.

Besides that, you need to consider supply and demand. Even you're very experienced, if demand is lower, the price goes down too.

My advice is: in order to earn more, use your experience to create value where demand is higher.

In order do encourage me, some time ago my wife said to me something like this: if you are a good professional, isn't enough you to know that, you need to show your value.

Good luck in your business!