You’ve been in the web design business for some time, and have finally decided you should get paid a bit more for your effort.
But how should you do that exactly?
- When is the right time?
- How much should you increase your agency’s rate by?
- How should you communicate the increase to your clients?
It may be difficult to raise your agency’s prices if you’ve never done it before. But with the right strategies in place, it can help your agency to balance the books better, become more profitable, and have the financial capability to expand.
In this post, you’ll learn everything you need to know about raising your agency’s prices the right way.
Why You NEED to Raise Your Prices
Raising your prices may seem scary at first. After all, what if your clients won’t be able to pay your new rates, and you face the risk of losing them?
In our experience, that’s rarely the case – and most clients are willing to pay your new agency’s rates. Here are some of the reasons why you should raise your agency’s prices.
#1: Provide More Value
The biggest benefit of raising your agency’s prices is the ability to provide better value.
You will no longer have to work with countless clients, doing just enough to get the results you agreed upon – while struggling to make a buck.
Instead, if you raise your prices, you’ll be able to focus on only a few clients and:
- Deliver better results
- Enjoy your work more
- Build lasting relationships
#2: Grow Your Agency FASTER
Growing your agency is essential to reach your business goals.
However, there are a lot of additional costs associated with growing your agency – and if you’re undercharging your service, you might never have time and resources for it.
So you end up stuck.
#3: Eliminate the Clients That Can’t Afford You
You’ll no longer have to waste your time with under-paying clients – which are usually the ones that complain the most! Instead, you’ll be able to let them go and focus on the serious ones. This will also help to improve your reputation.
Since you’ll be working with bigger clients, your portfolio will look more professional and you’ll increase your chances of landing another big client.
When Is the Best Time to Raise Your Prices?
There is no “best time” for raising your rates.
But there are a few hints that may indicate that you’re undercharging for your services, and need to increase your agency’s rates.
You’re Not Making Enough
If you feel like you’re underpaid or not getting as much money as you want, it’s time to raise your rates – and get paid what you deserve!
When you’re landing a new client, there should always be a negotiation about the prices.
If you don’t experience this, and your clients agree very quickly, it may be a sign that your rates are low – and you need to increase them.
You Haven’t Had Your Prices Raised in Years
You might be satisfied with your rates and even negotiate your rates with every new client. But if you haven’t raised your rates in years, now is the time to do so.
You can’t be standing in the same place, year after year – everything is going up. You need to grow your agency to get ahead and be the #1 in your industry. And for that, you must increase your rates.
How to Raise Your Prices
You’re about to learn how to charge what you really want (and need, and deserve!).
In this section, you’ll discover proven strategies for increasing your agency’s rates – that have worked for us and 100+ of our clients.
#1: Provide Exceptional Services
You can’t raise your prices when your services aren’t up to the right standard. If your only (or main) competitive advantage is the price, you should first start working on providing better services to your clients.
Also, if your clients aren’t satisfied with your services, they won’t agree to increase rates. Therefore, be sure to provide and offer exceptional services and results.
#2: Change Your Pricing Plans
This is a sneaky way to increase your prices – since most of your clients won’t spot it.
You can achieve this by adjusting your pricing in a way that enables you to be paid more for less work.
For instance, you can change the way you charge. If you’re charging by project scope, you can switch to a per-hour rate.
Or, in our case, you could slightly change the number of active websites and seats.
#3: Build a Reasonable Annual Rate Increase
It’s best practice to build a reasonable annual rate increase into any agreement. An automatic rate increase of 5-10% is totally fine – most clients won’t mind.
This means that as long as you are providing exceptional services to your clients, and they are happy with what they’re receiving, they’ll be likely to remain with you, and accept the rate increase each year without discussion.
Just make sure you’re upfront about this, so your clients won’t be unpleasantly surprised.
#4: Test Your Price Raise on Individual Clients
If you’re hesitant or shy about your agency’s rate increase, you can do it individually.
This is often an easier approach for smaller agencies compared with changing pricing plans or sharing a “We’re increasing prices” email with all current clients.
Instead you can approach your clients and let them know about your new prices individually. We suggest you do this in person or in an online meeting, which is a lot more personal (and leads to higher chances of success) than back-and-forth messages.
#5: Anchor New Price to the Value
The most critical thing you have to communicate is that you’re not just increasing your prices, you are also increasing the value you provide. Your clients have to be 100% sure about this.
They have to know that you’re increasing your agency’s rates not because you want to get paid more, but because you want to deliver better results. To achieve this, anchor a new value to the new price by connecting the price increase to the results and additional perks you’re going to provide.
BONUS: Offer Additional Services
Up-sells and cross-sells are an amazing way to get more money without increasing your agency’s prices. You simply offer something on top of your existing deal.
This works great because your customers have already bought from you, so they trust you and know you’re serious.
Plus, it’s much easier and less expensive to sell to existing customers than to new ones.
Summary: Get Paid What You Deserve
Increasing your agency’s rates is essential for being able to:
- Deliver better results
- Grow your agency
- Reach your business goals faster
Unfortunately, most agency owners are afraid to raise their prices – worrying about losing their clients. And while this may happen, it’s very rare. And the only clients that you might lose are the ones who care only about the price and not the quality – you’re better off without them!
Looking to save more money and get higher profits even further? That’s exactly what we’ve designed & built Atarim to help with.
Atarim is the leading visual collaboration platform trusted by 13,000+ agencies worldwide (web dev, design, and beyond), supporting project delivery for 1,200,000+ of their clients. Atarim’s groundbreaking platform can help you accurately find out your hourly rate, better organize your work, and free up time to allow you to focus on the work that brings you the actual money.
One of the unique and revolutionary features of Atarim is that it has been built on the foundation of point-and-click collaboration – allowing clients to point at what they’re referring to and then immediately leave feedback, say what needs to be changed, etc.
Agencies, developers, and project managers use Atarim to eliminate the need to rely on guesswork and endless back-and-forth email communication.
Try Atarim for free, save more time and money, and maximize your profitability today.