Making the decision to raise your rates is a grade A biggie. There are good reasons to keep your old rate (everyone will be happy). And there are consequences to keeping your old rate (everyone will be happy except you...and you know how well THAT usually works out). Once you’ve made the decision to raise rates, all the negative self-talk and naysaying saboteurs/gremlins/inner critics love to show up for a feeding frenzy. They’re your first obstacle. And they hate nothing more than clarity. So that’s what you must feed them: a steady diet of straight talk.
Here's What You Tell Yourself (and Your Saboteurs)
Say this, loud and proud:
I am raising my rates because: 1) I know the value of my worth and it’s time that I was compensated accordingly. (This may mean saying “no” to brain-picking too…your call). 2) I know what I need to do to grow my business and raising my rates will allow me to create more. (More of what is up to you). 3) I have done my due diligence and I know what the market will bear. (Because you HAVE). 4) I know the value of my worth and it’s time that I was compensated accordingly. (This bears repeating…saboteurs like to pretend they didn’t hear you the first time).
So, that's what you say to your saboteurs...but let me be clear. How you handle your saboteurs is very different from how you handle your beloved clients.
Here’s What You Tell Your Clients
With respect and appreciation and clarity, state: “I am raising my rates next month.”
You could try to explain how your rate increase means you’ll be working with fewer clients and providing them with better service etc, but truthfully, when I’m on the receiving end of this speech, it rarely resonates. I get it. You’re in business. And you deserve to be compensated. But as your client, I’d like to know:
“What’s the impact on me?”
At this point, you have two choices:
1) Temporarily grandfather the existing rates of your current clients and in doing so give them a couple of months grace before the new rates take effect. If you do so, it remains important that you tell them about the increase. If you’re good (and you must be, you rate-raiser, you) they are referring you to others. And if that’s so, you must educate your sales force – a.k.a “your clients” – about your price. No one likes sticker shock.
2) Have your existing clients start paying your new rate immediately. If this is the case, I am hoping that you have managed expectations early in the hiring process. When I start work with my coaching clients, we typically agree to a three month arrangement at a given price ($400/month + tax, if you’re curious). In our written agreement, I have included this caveat: Client and coach will discuss any rate increase at least one month prior to the agreement ending in order to establish a new agreement. People like surprises even less than they like sticker shock.
Will clients walk away?
The simple answer is...possibly.
Possibly yes, possibly no.
If you opt for choice #2, then it’s possible they have become quite comfortable with the old rate and they may believe your new rate is outside of the perceived threshold of what they can handle. DO NOT TAKE THIS PERSONALLY. You can either try to convince them the work you’re doing together is every bit as valuable as it ever was (feel the energy drain?), or you can invest that energy in finding new clients that are happy to pay your new rate (feel the energy lift?).
And for those who choose to walk away, lovingly hand them a list of people in your field that offer their services at the lower rate. It’s a classy and unforgettable act of generosity. No regrets, no hard feelings. Just expansive growth. Stand as a model for your clients. Chances are good it’s time they raised their rates too. Show them how to raise rates in the most elegant and masterful way possible.