Guess what I’ve never done? Correct… I’ve never raised the fee I charge to an existing client. No matter how long you’ve been with me (and I’ve got e-newsletter clients going on seven years now), I continue to charge the exact same amount for the same work.
Does that mean that all my clients pay the same fees? No, and in fact, as the result of raising prices over the years (for new clients), I’ve got some clients paying two or three times as much as others. But once we start working together, your rate will never go up.
But why not just bump the fees on the long time clients, particularly if I’ve got others who have demonstrated a willingness to pay much more for the same work? Two reasons.
First, my clients love it; I don’t have much client turnover. Ask around and you’ll never find another client who came on after you who pays less. It’s the exact opposite of what everyone from the phone company to your local YMCA does when they continually offer the best deals to the new customers (you know how that makes you feel).
Second, I love it. New clients come with a lot of "set up overhead." Getting to know each other, figuring out how to communicate, understanding what the definition of "success" is, etc., are all things which take time and effort. An established client, on the other hand, is easy to work with. The more of these I have, the less time I spend on the administrative side. And with such low client turnover, I don’t need to spend much time looking for new people to fill the bucket.
Try it, but make sure you choose your clients carefully. If your experience is anything like mine, you’re going to have them for a long time.
As a client, my bottom line thanks you.
Just one more confirmation that to earn a great living doing what you love with less effort and waste, you really can’t afford to be all about the money.
I’m glad you feel that way Lissa, although just to be clear, I don’t see it as a trade-off in any way. I make more money by not raising prices on existing clients (huh?). Not on those particular people, but in terms of my business overall. I spend very little time marketing/selling (partly due to this approach), which means much more of my work time is spent earning money, rather than looking for the next (wonderful like you) client!
Micheal,
Great advice. Having a loyal client is a benefit and they should be rewarded. I’ve given this same advice to colleagues who ask me how to increase prices for an existing client. Why would you ever want to risk losing a valuable asset, especially if it is one of your ideal clients? I thought I was alone in this thinking. Glad to see I am not.
Michael,
I just started my solo professional career this summer. It’s going great, but I can see that I started my rates too low. Do you still think it’s a bad thing to slowly move rates up where they should be? All my new clients have a higher rate, so I guess I’m implementing your advice without realizing it. I was hoping to move the older clients up soon, as well, since I think I underestimated what I should be charging.
Jessica Satterfield
http://www.TheSatterfieldAgency.com
Hi Jessica,
Hard to say without knowing how big the differential is. But assuming you’re making a “reasonable” amount, even though it’s lower than where you now see you could be, I’d be inclined to leave the old clients alone. Also, on the new clients, I wouldn’t feel obligated to slowly move it up — put it where you should be today. Until you have some people walking away on the basis of price you’ll never get a sense of how much you’re worth to your market.
Michael
P.S. I just started “office hours,” tuesdays 3-4 EST, so feel free to call then if you want to talk live (it’s free): 508-497-0900.
Michael,
Would you mind sharing your current fee structure with us? I am in the same business as you, and am not sure if I am charging the correct amounts.
I hope you don’t mind a competitor posting on your blog – I love your writing style and sense of humour, and I agree most of the time with your advice. Plus, I’m not really a competitor, you’re years ahead of me, this is my second year working as an Ezine Coach.
Thanks,
Hi Boris,
I don’t post my fees anywhere, but I’d be happy to talk to you about how I price. I have “Office Hours,” Tuesdays, 3 – 4pm EST, so feel free to call me when it’s convenient: 508-497-0900.
Michael