Several days ago, in an article I wrote on my blog in the Emprendices Community of Entrepreneurs, a reader told me that this was his difficulty in negotiating: How to negotiate rate increases with customers? So I decided to answer Damián with this new article, so that you can also read it, maybe it is also a problem that is spinning in your head, right?
But first of all, I need you to have prior knowledge and that is why I ask you to make sure you have read my article How to set your professional rates? This is because part of the information that I share with you in that article, you will need to be able to negotiate with your clients. Now yes, ready to start? Here we go with…
5 steps to negotiate rate increases with your customers
Step # 1 - Stop feeling guilty
This may seem like a psychological game, but I'm sure if you're like most of those who have trouble raising their rates, some of this is bothering you. Many times I meet independent professionals who are charging very low rates, and in fact they are super dissatisfied, but they cannot change them because they feel guilty for charging more. There are several points to work on this question, some of which we will see below, but I would start by reviewing your beliefs about money.
You have to think in terms of a WIN-WIN relationship, and this not only means that your customer has to win, but you also have to win. Because as long as they both identify this relationship in this way, they will both want to continue working together and making benefits together.
Step # 2 - You have to believe it to be able to sell it
If you don't know how much your services are worth, what your clients will achieve with it, what makes it unique in the market and how it differs from the competition, you can hardly show it to your client. I think I'm hearing you say… "But of course I know when my services are worth." Let me hesitate… and to convince you… I propose this exercise: write down in a notebook what all your clients have achieved with your services (do not focus only on a particular client) make a list of everything they have achieved with you. Be as specific and concrete as possible. Think about the things your clients accomplished later.
For example, if you are a therapist and work on self-esteem and security, surely you can say that one of your clients felt much more comfortable expressing his limits, improved his assertiveness in communication and felt more comfortable with himself. Now, after you accomplished all of this, you felt secure enough to ask for a raise or promotion in your company. This is what he was able to accomplish next. If his safety and self-esteem hadn't worked with you, he couldn't have done it, right?
Once you have a great list of these achievements from all your customers for your service, compare it to your current rate. What do you feel? How does that sound to you What do you see? If you have a great list of achievements and results and your rate is very low, you will notice it quickly. And that discomfort is the first step.
Step # 3 - Prepare to speak to your customer
There is nothing more inefficient than having these kinds of important conversations, without any preparation. This seems basic but you would be surprised at the number of people who have no idea what they are doing. For starters, I would love to know that you have a file, notebook or the medium you want where you write the agreements you make with each client. This includes the rate, special payment plans, gifts or additional benefits, etc. If you think you don't need it because you have it all on your mind or because it's the same for everyone, you're making a big mistake.
First, not all customers are created equal, and you will likely have different conditions based on their needs. And if you do not have this written down, you can make the terrible mistake of assuming that your client is paying in one way or another, and being exposed to him before a change that does not coincide with the agreement that you already have today. And on the other hand, don't you have better things to have in your head than remembering this? Better write it down and use your brain to think, create and build, not to remember (that's what files and diaries were made for…)
Step # 4 - Show your client what they have accomplished with you
Before talking about a rate change, the best thing you can do is show him what achievements or results he has obtained with you. Make a list of everything that has advanced, achieved, obtained in the process that you have worked together. This review of what has been obtained will help you introduce the subject of changing the rate and will help your client to keep in mind not only her achievements but, working with you, she can obtain more than she wants.
Step # 5 - Stop being a number and start being a creator of results
This is also quite common: why do you want to increase your rates? And well, some begin by saying that because the light has increased, that the cost of living is higher, that my income has risen, and inflation has skyrocketed. You know what? Your client doesn't care about all this, and neither do you. No, I am not crazy and I am well aware that we all have to pay the bills but it is a terrible justification (at least it is my opinion). Both to set the price of your services and to increase it you need to be aware of the value you offer, of what that service can do for your client.
The best way to achieve this is to start making those achievements or results that your client will obtain working with you more tangible. For example, a few days ago I was talking to a client who had long ago sold an 8-hour individual (non-group) workshop for $ 100. Beyond the cost to her, I made her see what this workshop represented to her client. What you would learn in this workshop could generate (without exaggeration but being concrete) recover 10 times your investment in a month, and in each consecutive month for an indeterminate period (we are talking specifically through a job change). If she could have shown him the value of her services in that way, she probably could have sold it at a much better price, and still her client would be pleased.
So, it stops being a number (your rate) and begins to be perceived by your client as the one who will help them obtain a desired, concrete and tangible result.
These are the basic steps so that you can introduce the rate increase with your clients in a natural and effective way. But, let me give you some additional tips like Bonus Track:
- You have to understand and accept that there are clients who are going to want to join and clients that are not. But you will be surprised how many will want to continue despite your rate increase. It is true that some people will prefer another professional with cheaper rates. That doesn't say anything about you, it just says that for that client the number is more important than the result, and that's fine, that's what is valid for him at the moment. Something that can be very useful for you, is to clarify when you start a process or program, that you keep the rate frozen until that date. In this way, you are already anticipating that, just until that date, there will be no rate increases and your client will fully understand that after that date there may be.
