Creators have two kinds of relationships with money:
1. The romantic one: The more money they earn, the more they feel rewarded and validated for their work, pushing themselves further to improve their skills and provide more value to their clients and customers. Our research shows that a creator’s happiness levels also increase with revenue.
2. The anxious one: No matter how much creators grow, there’s always anxiety when the “price” factor comes in. Deciding on rates, raising prices, having the price conversation, and justifying it right aren’t easy. But they are essential to their livelihood.
Bottom line: Forming a healthy relationship with money is essential for a creator to grow their business. And this can only happen when they start valuing their work and charging the right amount without feeling guilty.
While learning how to raise your rates and prices is super important for all creators, it’s especially crucial for female creators to fight the gender pay gap. Even though female creators outnumber male creators by a 2:1 ratio, almost 35% of men earn over 100,000 compared to only 19% of women. Not just this, men were twice more likely to earn over 150,000 annually than women in 2021.
To make sure these numbers get better moving forward, let’s talk about when, why, and how to raise your prices with clients and customers and effectively boost your creator business.
5 signs you should raise your rates
Unfortunately, no one will come along and tell you it’s time to increase your prices, and no two creators will ever have the same timeline. You’ll have to watch out for some signs that suggest it’s time for a raise. Here are some prominent ones:
#1: You’re working at the same rates as last year
If you’re a creator monetizing their skills by providing services to clients and you’ve been working at the same rates for the past year, you should immediately send that “here’s my revised pricing” email.
Here’s the thing: creators upgrade themselves more than any other professional. Every month, they work with newer clients from diverse backgrounds, business settings, and cultures. With every new client they take on, they bring their cumulative experience working with all previous clients to the next, thus helping them get business results with unique strategies. Besides, the more you work on a skill, the better you become at it, and the less time it takes to do it and get spectacular results.
So, you must revise your rates with clients either twice a year by a small margin, say 5-10%, or once a year by 12-15%. This way, you ensure keeping your rates competitive with other creators and getting paid your worth as your value increases.
#2 You’re getting a lot of leads and customers
An inbox full of leads and a notification bar full of sales only say one thing—there’s a definite demand for what you’re offering in the market. And as freelance writer and consultant, Kaleigh Moore says:
When demand goes up, rates go up. Then there’s a value conversation that follows where you explain why rates are going up and reinforce the value you’ll continue to provide.
– Kaleigh Moore
The ultimate goal for any creator is to spend less time working with clients or selling to customers and still earn more. However, this is only possible when you raise your rates, and high demand for your products and services is a definite green flag.
#3 You experimented with a high rate and closed the sale
Since no one-size-fits-all approach tells you how much you should charge, experimentation is a creator’s best friend. Since new customers and clients won’t know your charges unless you’ve explicitly mentioned them on your website, you can quote a higher rate to the next prospect and see how it goes.
If you hear a “yes,” it’s a sign that you can increase your prices with existing clients and customers. While a “no” doesn’t necessarily mean the opposite, you can still experiment with a price raise with a couple more prospects to see if you can justify the price rate the right way before revising them across your client roster.
#4 You upskilled or improved your product
Since you can’t just raise your prices and wait for the client to say “yes or no,” upskilling or adding a value-add to your product can justify the price raise and enhance retention.
If you’ve added a credible brand to your portfolio, invested in a mentor or course to learn and provide better to your clients, and thus have upskilled in the process, it’s a sign you should revise your rates.
For products, Shreya Pattar, a content writer and creator, suggests increasing product rates if it’s a high-rated bestseller or you’ve added new content, live Q&A, or 1-1 time to the existing offering.
The more additions you offer and personal time you commit, the higher you can charge.
#5 Your business expenses have grown
Over time as your creator business grows, your expenses will also increase.
You may require new software and equipment or hire a team to deliver products and services to your customers. To drive sustainable growth, you can’t keep working at the same rate even though your expenses are increasing. So, track your monthly business expenses and notice the change to justify your price increase.
Another natural indicator that you need a price raise is also inflation.
If your business expenses alone don’t increase, your overall expenses will, and to meet those inflated rates, you’ll have to charge more for reasons outside your control. However, you don’t need to justify your price increase much if you’re doing it because of inflation.
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6 best practices to raise your rates the right way
Now that you know it’s time to face the music and raise your rates, let’s see how to do it right. How you break your news is way more important than by how much you increase your prices. If done right, you’ll strengthen the relationship with your customers and clients forging a long-term partnership while getting paid what you deserve.
Here are some best practices you can follow and that creators swear by to raise their rates:
1. Nurture the right mindset
More than anything, you should approach the price increase with the right mindset because if you don’t believe in it yourself, why would your customers believe you?
So, rather than thinking that raising your prices might negatively impact your revenue and what will happen if you start losing clients, and customers, think about what will happen if you don’t raise your rates. You might end up burnt out or dreading your work, which will stain your self-esteem and end up affecting the quality of your work.
Yanna Berman, the founder of Urban Mamaz, agrees. She knows many business owners who feel a pit in their stomach with the thought of telling their customers they’re raising their prices. Many fear their customers will stop buying from them and go elsewhere—and a few of them probably do. But this happens in any business, whether you’re a small mom-and-pop shop, creator, or a big brand.
The fear of raising prices is fairly connected to imposter syndrome and the thought that you don’t have value or are not worthy of selling more expensive items. But this couldn’t be further from the truth.
Besides, with inflation hitting an all-time high, everyone is raising their prices, and if you want to keep your head above water, you must do the same.
So, before you get ready to talk with your clients, ensure you know your reasons for increasing your rates, be it around inflation, high demand, increase in quality, or more credibility. This way, you can address your customers’ objections the right way, so they continue working or buying from you.
Once you hear a “yes” from them, it’ll make it that much easier to raise your prices the next time with another client or customer. Besides, it’ll push you to add more value to your customers, work more on your skills and add so much to your bottom line, which will help you grow your creator business even further.
There are a lot of people who do excellent work but don’t have the confidence to charge more, and then there are people who do ‘okay’ work but truly go for it and are often able to charge higher prices simply because they dare to do so. Having improved your skills, always being fully booked, and getting great results all play a role in deciding to raise your raise, but the one thing you’ll always need is the guts to actually do it.
– Sofie Couwenbergh, Content strategist, writer, and optimizer
2. Structure your price increase well
You can’t just wake up one day, decide you want to increase your prices, and send a bulk email stating the price revision. You need to analyze your current clients’ and customers’ needs to tailor tiered packages or roll out the announcement in a structured manner to ensure this price revision appears professional and on-brand.
Here are some things you should consider while structuring your prices:
- Considering the factors why you’re raising your prices and your previous pricing, by what percentage do you want to increase your pricing—realistically?
Traditional advice says you should raise your rates in small, steady increments (like 10% annually) but don’t be scared to break that rule. My largest rate increase with a client at one time was over 200%, and they agreed with no hesitation. Do larger rate increases when you’ve grown your skillset considerably and the value you provide has increased substantially. Also, take into account inflation and your cost of living. If either of those balloons, you should increase your rates more than you normally would in a given year.
– Dana Nicole, SaaS writer
- Do you want to raise your prices for some clients or products more than the others? What factors will you consider while charging differently, and how will you justify it?
- Do you want to increase your prices for existing service offerings or products, or do you want to add more deliverables and value-adds to it and turn it into a package?
Based on your observations and analysis, decide on what kind of pricing options you want to give customers and clients to make this price increase smoother for them. Some options you can consider include:
- Installment plans: If you’re selling a six-figure product like a course, a community membership, or offering high-end packaged services, instead of pushing your clients and customers to pay together, you can allow them to pay in installments. You can set milestones based on fixed upfront payments and allow them to manage them however they like, to make payments more manageable. This way, your price increase—no matter big or small—won’t burn a sudden hole in their pocket and increase their probability of working with you further.
- Tiered-packaging: The purpose of tier-based packaging, whether you use it to sell products or services, can help you upsell your customers without explicitly initiating that conversation and give them enough choices to continue working with you. For example, say, you offer coaching services. In that case, you can offer three tiers: one with just group coaching, second with group coaching + community support, and third with group coaching and bi-weekly 1-1 calls. With every tier, you can increase your prices. Here’s what Shreya Pattar offers with her eBook, Money Call$:
- Pay what you want pricing: If you’re confused about how much you should charge for your products and what people would pay for them to ensure you set a fair rate for your upcoming products, you can follow a “pay what you want” pricing model for a low-tiered product. Here, you can put up anchor pricing, say $10 and allow customers to pay a minimum of $10, but if they find more value in your product, they can pay you more. This will give you an insight into how high you can go with your pricing and make future price revisions easier.
You can also create your own process to structure and justify the price for yourself and your customers. Tomek Mlodzki, the CEO of PhotoAiD, rolls out the increase in price for his products in different phases:
First, he assesses the business case for a price increase to be confident that it’s the right thing to do for both his business and customers. But before making a decision, he always tests the impact of higher prices on his conversions and income. For example, three weeks ago, he decided to examine the possibility of raising his products’ prices by 25% because of inflation and a massive rise in the price of paper.
To find out how it would affect the purchase of his products, he decided to conduct a test in which he already offered a higher price to every fifth user. If the user went to the shopping cart despite the higher price, they would receive information about the discount and ultimately pay the same fee as other users. As a result, everyone paid the same price in the end, but he got a lot of data on the impact of price increases on user behavior.
The results proved that raising the price will positively affect his income and will not discourage his customers from purchasing. Next, he communicates the price increase to his team so they’re prepared to answer any questions or objections by the customer. He also sends a notice to all of his customers, explaining the reasons for the price increase and how it will affect them. This way, he helps the customers make an informed decision about whether to continue doing business with him.
3. Inform them well in advance
Imagine you’re working with a coach. Your coaching is going smoothly, you’re learning a lot, and you’ve finally started seeing some results. The next morning, you receive an email from your coach stating a considerable price revision from the following week. You can pay them even now, but you can’t immediately afford this price increase from the next week itself, so you have to let them go.
The timing of your price increase might not sound like a big deal, but it’s crucial in retaining your clients and customers. You don’t just want to spur the news on them, but give them enough time to absorb the change, clarify their doubt, manage funds, adjust their budgets, and request a credit increase from their organization—there could be many reasons for this.
So, it’s best to increase your prices at least one month in advance.
Although you want to encourage your clients and customers to make the sale as soon as the uptick is released to the public so you don’t get booked out, you still want to give them enough time to manage other things.
Alex Berman, a YouTube Creator, says the best way to increase your prices is to have a countdown. A few years ago, he raised his consulting rates from $100 per hour to over $1,000 per hour in a few months. He did this by having a weekly countdown and sending emails to the list 3x a week with a different positive success story.
Increasing the price enhanced the quality of people, the number of sales, and the company’s revenue. Overall, a win for everybody.
Like Alex, you can also announce your price increase through the method that best suits your relationship with your customers and clients. This can be through an email, website announcement, or personal call. But make sure you do it well in advance.
4. Justify your pricing and be open to discussing
A price increase can seem unreasonable to some clients and customers, especially if they’ve been working or buying from you for some time. So, you must justify this price revision by giving them a recap of the value you provide and will continue to provide and especially why you’re raising your prices by being transparent.
- If it’s inflation, tell them that.
- If it’s because your business expenses have increased, tell them how and how this will impact the experience they get—for the better.
- If you’ve upskilled or added something new to your product, tell them how they’ll benefit from this change and what results they can expect.
Give reasoning but don’t forget to tell them what this change means because unless they understand this increase in their budget and investment will get them better results, it won’t be easy to retain the client.
Additionally, you want to be open to discussing their concerns.
They may have questions or doubts regarding your price increase or what it means for business moving forward. Here, it’s not enough to simply answer—you need to over-communicate and re-iterate your value and convey that this price increase is also beneficial for them because higher price equals higher quality.
You can communicate and nurture this on calls during the period of waiting.
For example, if you told your client 30 days in advance, you have 30 days to convince them to continue being a customer or client to you. Case studies and testimonials can also help you build your case and push them further towards accepting the price raise.
However, remember not to shun any of their concerns, no matter how small they might be. Welcome their questions, and ensure your entire team (if you have any) knows how to address those questions the right way; otherwise, they might start considering their options and switch to a competitor.
5. Know your negotiation limit
After you announce your price revision, some clients may instantly say “yes,” some might take a bit of nurturing and then say “yes,” while others may be at a crossroads. To help make their decision easier, you can offer different pricing options to them, but you can also give them incentives to continue working with you.
For instance, you can create a tailor-made package for your client that includes your previous service offerings and add-ons to help them get better results. If you offer just social media writing services to your clients, you can also provide blog posts, newsletters, press releases, and email copywriting by creating a strategy that will help them achieve their goals faster yet in a more structured manner.
So, instead of charging $1000 for writing LinkedIn posts, you can create a $6000 package offering all of the above, following a proper strategy that’ll take them towards their goals.
You can do the same with products and increase your prices by attaching an add-on to your previous offering and a timer to instill some FOMO. For example, if you were offering community membership for $79 a month, you can combine it with a 1-1 call and sell it at a discounted rate of $159 instead of the usual $300 for the consultation call alone.
This offer can stand for a limited time, after which you can continue selling at an increased rate. This will incentivize your clients to sign up and continue working with you when you provide more value to them in the add-on they’ve just purchased.
But let’s also consider a situation when the client says, “it just won’t work for us.” Your upsells, cross-sells, packages—nothing works, so what do you do? Maddy Shine, an SEO and Visibility Coach, offers some sound advice.
Don’t give discounts just because a client asks for one. In my experience, they rarely do the work at a discounted rate, and therefore they do not see the results. Meanwhile, it can build resentment in you as you didn’t stick to your guns, and they’ll feel disgruntled they haven’t seen a return on their investment. Offering upsells is a great way to add extra value, so for example, I offer a bonus website review video when people sign up to my membership community at point of sale, as well as a follow-up email in case they chose not to book it.
– Maddy Shine
6. Formalize the rate change in your contract
Verbal or email agreements about the rate change aren’t enough.
Just like any other business process, there needs to be a documented record. So, remember to formalize your price increase by mentioning it in your creator contract.
Without this, no matter how much time you spent convincing the client about the price increase or how promptly they agreed, it won’t matter because it’s not safeguarded by transparent legal language and signatures.
This is what the contract changes should include:
- Previous rate and its timeline
- The new rate, from when and till when it’s valid
- Revised payment terms
- Revised payment milestones or options
- Change in deliverables
Anything that accompanies your rate change should be mentioned in the contract, so you’re not leaving any scope for gray area and unnecessary disputes moving forward.
Make the jump today!
Raising your rates shouldn’t be a scary thing.
It’s a part of running and growing a business. So, while there are a lot of methods to approach a price increase, make sure you adopt one that perfectly aligns with your rapport with customers and clients.
Don’t rush the decision because someone told you to increase your rates.
Take your time, analyze your positioning, assess your relationship with clients, justify your price, and then decide. Once you make a decision, choose the right way to structure, justify and communicate this price raise to your clients and customers—without feeling guilty, because you deserve it!
Also, remember: not everyone will agree to your price increase. So, be ready to lose some clients and customers but be rest assured that this is best for your business and the audience you’re serving.
It’s always the uncomfortable decisions that lead to the highest amount of growth, so let go of your inhibitions and start planning your rate increase now!