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Why you should increase your rates

Are you a Social Media Marketer looking to increase your rates?

Let's face it there is a very good chance you aren't charging as much as you should be - one of my members that I spoke to hasn't increased her rates for 5 years!!

January is a great month to increase your rates this as it's the start of the year but this means you need to let your clients know about the change now to give them plenty of warning.

Read on for my top tips on how to increase your social media marketing rates with existing clients

For ongoing management or nurture package retainer clients then follow below:

Firstly, make a list of things that justify this cost increase. Use the following arguments:

  1. Salaried workers get pay increases as reward for performance so it's reasonable for freelancers to receive the same. Prepare a summary report that shows you've been doing a good job for them.

  2. Salaried workers also get pay increases year on year to account for inflationary increases in the cost of living. At the moment your annual overheads have gone up and you need to adjust your salary accordingly.

  3. Software is now more expensive as most software is US based and the pound is very weak against the dollar (my software costs have increased significantly). You need to adjust your rates to take this into account to cover your software overhead rise.

  4. It's now more expensive to stay on top of your professional development, for example, the cost of memberships, courses have increased.

Now book a call in with your client within the next 2 weeks and tell them it's a call to go over your performance this year, and to look at your contract for 2023. Make sure they know it's not a usual chat about the channels.

In the meeting put your points across about your increased fees. If your client tries to counter in any way try not to get defensive. Stay calm and logical, refer back to the notes you have made on 1-3 above.

Then after the call follow up with an email giving them the official 4 weeks notice in writing.

How much should you increase your rates by?

Unless you have a very strong pipeline of potential clients and a solid consultancy/training revenue stream or digital product revenue stream be wary of putting your prices up too much in one go. Increase your hourly fee incrementally and then let clients adjust to this new fee.

If you charge £20/h then increase to £25/h. If you charge £25/h then increase to £30/h.

For day rates work this out on an 8 hour day basis. £20 x 8 = £160/day so your new day rate would be £25 x 8 = £200

For project based or monthly retainer fees work out the totals based on the number of hours you do each month and then increase accordingly. If you work 1 day per week and charge £1,000/month for one client then this increase this to £1,150/month.

If you want to raise your prices from £15ph to £30ph, you don’t just do that overnight for existing clients. First, you inform clients you’re increasing the cost to £20ph. When this has been the norm for six months or so, raise it again to £25ph, and so on. These slower price raises help clients adjust and ensure the relationship survives the transition.

However, you are free to increase your fees more flexibly for your consultancy services, training services and digital products. Here it depends on the value you are providing and the demand you have in terms of pipelines of clients.

Ultimately, when it comes to raising your prices, it’s about self-respect and charging what your worth. You are an expert in your specialism, your skills are highly desirable, you are hard working, loyal and flexible. Remember that!

Some freelance Social Media Marketers don’t have the confidence in their ability to justify a price increase. For this reason, a lot of professionals will take a financial loss regarding the time they spend on a project against the value because they don’t feel comfortable with raising the costs.

This is a real shame. You’re entitled to earn more and be successful just as much as any other freelancer. Your clients will, if you raise prices properly, be happy to work with you on the issue.

But what if they come back and say no?

If you have a strong pipeline of clients, you're offering and making money from consultancy and/or training and you're generating passive income from digital products such as e-books, toolkits and online courses then walk away from the platform management. Feel free to offer them a different way of working with you instead - perhaps support for them to manage their own channels under your guidance on a lower monthly retainer.

If you aren't in a strong position and they say no because they genuinely can't afford it, maybe their business isn't going well, then you also have the potential to renegotiate your contracted hours and what you're actually delivering. Cut back on your deliverables which means getting paid the same amount for doing less hours. Which means your rates will go up on an hourly basis at least.

If they also say no to this and you feel you can't walk away as you need the money then all is not lost. You might not be in a position to put your rates up on January but have a solid plan to do so in 3-6 months time. Agree to keep your rate for the next 3 months. Then really focus on doing regular business development work and diversifying your income during that time to get more client leads. Then you're in a much stronger position to increase your rates at a later date. And you can then walk away. It's amazing how clients can miraculously find the budget though when they know they'll lose you! Being prepared to walk away is your ultimate negotiating power so get in a position to use it.

Listen to this on my podcast.

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