Time To Raise Your Consulting Rates?

We did a quick little poll about whether members where raising their consulting rate. Below are the results.


Tips for raising your consulting rate

The easiest time to raise your rate is at the start — a new year, a new project, a new client.

Start with a rate you want. Don’t make the mistake of starting with a lower rate and hope to raise it over time. The truth is, most clients stick to your initial price, and they won’t negotiate in the future.

Get right to the point. Price increases are a normal part of doing business. Burying your message in a bunch of small talk will only undermine your professionalism.

Remind them of your value and how you value the relationship. Reference the length of your relationship or any recent results from your work. Position yourselves as an authority in your area of expertise. Clients trust and respect specialists more than generalists.

When you’re a specialist solving a real problem, your client has a greater need for you. If you are seen as a generalist, every time you increase your fees, you’re giving your clients a reason to find your replacement…and the perception is that it’s much easier to replace a generalist than it is a specialist.

Set an effective date and give your clients advance notice. As with any change, it’s best to get people used to the idea first. Depending on the degree of change, you’ll want to give your clients one or two notices. Here are a couple of samples you can adapt.

Sample #1

Subject: New rate policy for 2023

Dear Joe,

As 2022 comes to a close, I’ve reviewed my books and clarified my business goals for next year. As a result, in 2023, my consulting rate for new projects will increase to $175/hour. This rate will only apply to new projects, so our existing contract won’t be affected, but I want to give you a heads-up now.

Of course, rate increases are inevitable, particularly in this healthy economy. I value the relationship we’ve developed over the last two years and certainly want to continue being of service in dealing with your RF issues. Please let me know if you have any questions or concerns.

Sample #2

If you’re not going to raise rates at the beginning of the year, start dropping hints to manage expectations. The best time is right after a “win” or other milestone. “Yes, I thought the meeting went exceptionally well too! Let me know how else I can help. By the way, I’m planning to raise my rates in the fall, but we can discuss that later.”