When Is the Best Time to Raise Your Rates as a Digital Agency Owner?May 08, 2023
Every digital agency owner will raise their rates several times in their business, but that doesn’t mean it’s not stressful! Price hikes are nerve-wracking even when you know they’ll go over well with your clients. But between preparing yourself for this change and raising your fees at the right time, you can make this process much easier for yourself and your clients.
3 Things to Do Before You Raise Your Rates
Increasing your retainer fees can come with a lot of fear and uncertainty over whether or not this is the right time, or if the price hike is warranted in the first place. But you can’t listen to those limiting beliefs! Here are three strategies for preparing yourself for price increases so you can raise your rates and earn what you’re worth.
#1: Step Out of a Fear-Based Mindset
You cannot be afraid to raise your rates, regardless of when that increase goes into effect! Maybe you’re afraid clients won’t think your new retainer fees are worth your services, or that your limited experience doesn’t merit a rate increase. But listening to those fears will just hold you back from achieving your goals and building your dream digital agency.
You deserve to raise your rates no matter where you are in your agency owner journey. Whatever you think you deserve, know that you’re worth more than that. You work hard for your clients! With all of the wins you’ve scored for them and the killer results you’ve generated, why wouldn’t you deserve to raise your rates?!
If you’re delivering premium services to clients (which I know you are!), you should charge a premium fee. It’s really that simple — whether you’ve been at this for 10 months or 10 years, you have unique and valuable experiences, strategies, and relationships that you bring to the table. Don’t do yourself a disservice by undercharging for your expertise.
#2: Add Value to Your Services
One of the best ways to ensure a rate increase goes over easily with clients is to demonstrate how you’ve added value to your existing services. You know you deserve that higher fee (and so do your clients), but they want to know they’re getting something new and valuable. A higher fee for the same old, same old won’t feel justified in their eyes and — harsh truth time — you run the risk of them moving on from your agency.
Check in with yourself and your team to see where you can add value for your clients. These new services or features can be implemented before you raise your rates or after you send out your first invoice with the new fees. Think about how the extra revenue will allow you to upgrade what you already do, whether that’s increased client meetings or new software to improve your efficiency.
You may be able to add new services, too! Investing the additional revenue into training for you and your team regarding a particular service is a great way to expand your business — we have a ton of masterclasses inside The Pitch Lab to help you master new skills. You can also bring on freelancers to white label services outside your zone of genius or hire new team members to join your agency!
#3: Get Confident!
If you’re already in The Agency Accelerator, you know how important confidence is when you raise your rates. If you don’t truly believe that you’re worth this new rate, your clients won’t, either! They’re paying for the value of your expertise, experience, and services. Remember that and let it guide you.
You need to fully step into your value and own it through every step of the rate increase process. Have the confidence to charge exactly what you’re worth and not a cent less. And when you communicate your new fees to your clients, you need to do it confidently — no backtracking or second-guessing yourself!
Be ready to be honest and transparent when your clients ask questions about your rate increase. Come prepared with statistics (like the percentage increase from your old fees, inflation stats, or market research from your peers) and explanations of the value-adds you’ve already implemented or will implement in your agency.
When to Raise Your Rates as a Digital Agency Owner
So you’re finally ready to raise your rates…now you just need to nail the timing! There are two ideal times that help your clients ease into rate increases and take the changes in stride. Pick the one that works best for your agency and get ready to earn your worth!
#1: After You Receive Killer Feedback & Results
Received stellar feedback from a client or just knocked it out of the park by landing a massive feature? That’s a great time to raise your rates! Your clients will be super satisfied with the value they’ve received from you and those good vibes will make the price increase an easier adjustment. I mean, you’re already on a roll — why would they want to impede that over a rate increase?
When you raise your rates this way, emphasize how the price increase will also improve the quality of your services. Think about what you and your client have achieved together so far and all the possibilities for your partnership going forward. And always express gratitude and show your appreciation for your client, both for the positive feedback and for their support in increasing your prices.
Related: How to Get an Awesome Client Reference to Show Off Your Expertise
#2: Before Your Retainer Period Ends
Raising your retainer fees 30-60 days before the end of your current retainer period is also a great move. Lots of clients will expect a price increase around this time, anyway. Bonus points if you can align this with a big win or positive feedback! You can inform them about the rate increase during your pre-renewal meetings or when you remind them they only have 30-60 days left in their retainer.
If you choose this strategy to raise your rates, offer to lock your client into your new rate for a longer period than their current retainer — if your client has a 6-month retainer, suggest a 12-month retainer instead. This is a win-win strategy all around! Longer retainers let you secure predictable, recurring revenue for longer periods, giving you the flexibility to focus on strategy instead of small projects. Your clients will also rest assured they won’t have another rate increase for a year or more and will be excited about all the new value they’ll receive over the next retainer period!
Increasing your retainer fees can be stressful, but it doesn’t have to be! When you take the time to prepare and raise your rates at the right times, the process will be a much easier adjustment for you and your clients.