Guide · Rates · 4 min read
How to raise your rates with existing clients
When to do it, how much, how much notice to give, the email to send, and the arithmetic that shows why losing a client or two is survivable.
· Ferrier Industries LLC
In short
- Raise rates on a schedule, once a year, and before a new project rather than during one.
- Give notice: about sixty days for retainers, thirty for project clients. Notice is what separates a rate change from a surprise.
- The email states the number, the date, and what stays the same. No apology, and no list of your rising costs.
- When a client asks to keep the old rate, trade rather than refuse: the same price for a smaller scope.
- Do it when your pipeline is healthy. A rate rise only fails if you cannot refill the capacity it frees up.
Raising rates with new clients is easy: you quote a bigger number and see what happens. Raising them with existing clients is the hard one, and it matters more, because existing clients are usually the ones paying your oldest prices.
The conversation is usually far less dramatic than the anticipation.
When to raise
- Annually, as a matter of routine. A rate with no review date tends to stay where it is.
- When you are booked several weeks out, consistently. Demand exceeding supply is a price signal.
- At renewal, for retainers. Never mid-term.
- When the work has changed. If you started as a designer and now run their whole brand, you are selling something different.
- When your costs have moved. Software, insurance, and healthcare all quietly eat a rate that stayed still.
And when not to: in the middle of a project, right after a mistake on your side, or while the client is visibly in trouble. Timing is most of the diplomacy here.
If you are not sure what the number should be, the hourly rate calculator works back from your take-home target, expenses, tax and time off.
How much
Treat two cases differently. A routine annual increase is an adjustment: ten to fifteen percent needs no justification beyond the calendar. A much larger jump is a repositioning, and repositioning needs a reason the client can see, such as a new capability, a bigger remit, or a different service.
If you are badly underpriced, resist fixing it in one move. Two increases some months apart, or a rate that applies only to new projects while existing work runs out at the old number, both get you there with fewer casualties.
How much notice
About sixty days for retainers and ongoing relationships, thirty for project clients, and always before a new project rather than during one. Notice is what separates a rate change from a surprise, and surprises are what people object to.
The email
Keep it short. No apology, no long justification, no list of your rising costs. A paragraph of reasons reads like a negotiating position and invites a counter-offer. State the number, the date, and what stays the same.
Subject: Rate change from November 1 Hi Priya, A quick heads-up: my rates go up on November 1. Your monthly retainer moves from $2,400 to $2,750, and the project day rate from $800 to $900. Everything already booked stays at the current rate, including the December campaign we scoped last month. Nothing else changes: same scope, same turnaround. I have really enjoyed this year’s work, and I am planning on plenty more of it. If you want to talk it through, I am around Thursday. Sam
Three things that email does deliberately. It gives a date rather than asking permission. It honors work already booked, which removes the “but we just agreed” objection. And it says you want to keep working together, because a rate email without that line can read as a goodbye.
The three replies you will get
“That is fine.”
Say thanks, update the invoice, and move on. Do not undercut yourself by adding “and of course if that is a problem we can look at it”.
“Can we keep the old rate?”
Do not simply refuse, and do not simply agree. Trade: hold the price and change what they get for it.
I can hold $2,400 for the next six months if we move the retainer from 30 hours to 25. Same monthly fee you pay now, slightly smaller scope, and we revisit in May. If you would rather keep the 30 hours, the new rate applies from November. Either works for me. Tell me which you prefer.
That answer is honest, it holds your value per hour, and it hands the decision back to them. A client who picks the increase over the smaller scope has told you the objection was reflex rather than budget.
“We will have to find someone else.”
Usually a real budget ceiling rather than a bluff. Be gracious, offer a proper handover, and leave the door open.
The arithmetic that makes this easier
Say you have ten clients at $2,000 a month. You raise 20% and three of them leave. The fear stops the arithmetic at the second row. Carry it on.
| Scenario | Clients | Monthly revenue |
|---|---|---|
| Before the rise | 10 at $2,000 | $20,000 |
| Three leave, none replaced | 7 at $2,400 | $16,800 |
| Two of the three slots refilled | 9 at $2,400 | $21,600 |
| All three refilled | 10 at $2,400 | $24,000 |
Refill two of the three slots and you are earning more than before, with one fewer client to serve.
Who to let go on purpose
A rate change is also a filter. List your clients by revenue and by how much of your attention they take. The ones at the bottom of the first list and the top of the second are the ones to raise most. If they stay, they are finally paying what the work costs. If they go, you have your best hours back.
One habit to build now, whatever you decide about this year: put a recurring note in your calendar, the same week every year, to review rates. A rate that never gets an afternoon of thought does not move.
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