Navigating Price Increases with Clients
If you've been contemplating a fee hike, now is the perfect time to take action and send out that price increase notice to your clients. Generally speaking, a 3-month heads-up hits the sweet spot for prepping clients for your new rates. Sending those notices now sets you up nicely for a New Year price adjustment. Even though the topic of price increases may have taken a backseat as you increasingly (or reluctantly) focus on project-based work, it's important to make sure that margins aren't being eroded for clients on retainer.
I'm not going to sugarcoat it—sending out that price increase notice will get your pulse racing. Maybe it's nerves about not getting the contract renewed, or perhaps imposter syndrome is creeping in about the value you provide. Let's acknowledge that fear but flip the script. Rather than being held back by a scarcity mindset, let’s embrace abundance . You'll find most clients are understanding about the price increase, and this exercise will offer valuable insights into the long-term sustainability of your client relationships.
Selling the Price Increase
There are few among us who look forward to having this conversation with their clients. After all, none of your clients want to hear that the marketing services their business relies on is going to cost more. But fear not, I've got your back with some tried-and-true practices:
Give Ample Notice: As I noted above, sending this info out in October for a New Year adjustment gives clients ample time to adjust budgets or explore alternatives.
Offer a Grandfather Clause: Provide an option to lock in current rates by offering an annual contract option before year-end. You can also provide an incentive of old pricing if they purchase new services by the end of the calendar year. This is a win-win: they keep costs low, and you secure longer commitments.
Be Transparent: Clarify that rising operational costs -- like talent acquisition and benefits -- are the drivers behind the rate hike. This narrative will resonate with clients facing these same challenges.
Agency Alignment: Ensure everyone is in the loop to avoid awkward situations where an account exec might quote an outdated rate. Communicate price increases internally before announcing it to clients.
No Apologies, Just Gratitude: Don't say "sorry." You're not doing anything wrong. Instead, lean into gratitude by thanking your clients for their understanding as you make necessary adjustments. And, if you're having trouble getting over this mental hurdle, here's a mantra that might instill some confidence. Repeat after me: "My service provides excellent value, and we should charge accordingly."
Smooth Transition: If your new rates might burden your client's budget, offer to help them transition to a different agency. Though the goal is retention, you're demonstrating empathy for their financial constraints. More times than not, clients will stay with you if they value the service.
Follow Through: Double-check that both the client contact, and the accounts payable team get your notice via both email and snail mail.
Your Move
Here's my last bit of advice: Stop procrastinating. Get that letter drafted and sent. If you need help with wording or format, I’ve got you covered. Feel free to reach out and I’ll send you a customizable template to help you communicate your price increase effectively.