Best approach to increasing rates
Thread poster: Rob Grayson

Rob Grayson  Identity Verified
United Kingdom
Local time: 17:49
Member
French to English
Jan 24, 2008

Hello everyone,

This is a follow-up to my previous post about the phenomenon of translators working for very low rates. Thanks to everyone who contributed to that post; I was surprised by both the quantity and depth of responses!

I place myself firmly among those who believe that a quality, professional job deserves a decent level of remuneration. At the same time, I am still relatively new to this business (< 2 years), and though my rates are within the average band, I feel that there is room to increase them. This is a simple matter when dealing with first-time requests from new clients; but when 90% of your work comes from existing agency clients, some of whom are more aggressive and price-sensitive than others, negotiating rate increases can be a tricky business.

And so to my question: what are the most effective ways to persuade existing clients (especially agencies) to accept rate increases without damaging the business relationship, and possibly without driving down the volume of work? I appreciate that there is no magic formula, but would be especially interested in hearing best practice from those who have learnt by experience in this area.

Let's see whether this one generates as much of a response! (Though I think 92 replies could be hard to beat...)

Thanks,

Rob


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Vadim Poguliaev  Identity Verified
Russian Federation
Local time: 19:49
English to Russian
my X cents Jan 24, 2008

In early december I sent the following message to two of my oldest customers (first sentence differed a bit, but it's not important)

At first I'd like to thank you for ongoing support - so far you resolved all the issues raised to my favor, and I really appreciate it.
Truly you are one of my best clients, your jobs are always a pleasure, and cooperation with PMs is on high level.
But I need to align the rates between customers, and it means that they will be higher for the next year.

New rates are:

Translation: 0.XX EU per no match word
Review: 0.XX EU per word
Hourly rate: XX EU

Note, that these are still lower, than for most of my customers, even those from "low-cost" regions, like China and Eastern Europe.
Also, I'd like to offer fixed X.X% discount for all projects above 100k to keep the relationships mutually profitable.


I succeeded in both cases. Recomendations are obvious, be polite, but firm, tell them, how much you love them, and give smth to sugar-coat the loss of profit.


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Shouguang Cao
China
Local time: 00:49
Member (2007)
English to Chinese
+ ...
work for sometime silently before asking Jan 24, 2008

Here's one answer from the developing world.

Frankly speaking, the awfully low price sounds good to me for my pair. I'm often working lower than that for some agencies. I wrote a "the best agency I've ever worked with" after working on a rate that is low to western Europeans and sincerely meant it.

I am planning to ask for raise anyway to an agency I work for but not now, I assume that if I work for them long enough, there will be a greater chance that I succeed without significantly losing work volume.


[Edited at 2008-01-24 12:45]


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John Cutler  Identity Verified
Spain
Local time: 18:49
Spanish to English
+ ...
Rate of inflation as a minimum. Jan 24, 2008

You should increase your rates automatically every year by at least the annual inflation rate. That figure is easy to find in the news and is an official figure released by the government. It's a type of increase that (technically) no one should be able to argue with.

Simply write a nice, professional sounding email stating that you are obligated to raise your rates to keep up with inflation. You can then wait and see if the agency, customer or whoever is willing to accept that. If they don't accept it, it's up to you to decide whether you want to keep working with them or not.

I've mentioned in another forum that I always preface my rates with the phrase, "My rates for 2008 are..." That implies that they'll change at somepoint and gives you room to manouver and negotiate at a later date.

PS. It's still January, so you're not too late to announce your 2008 rates to clients.


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Marie-Hélène Hayles  Identity Verified
Local time: 18:49
Italian to English
+ ...
Telephone important clients Jan 24, 2008

If you have clients you can't afford (or don't want) to lose, it's a good idea to phone the most senior contact you deal with there and negotiate a raise that way.
For minor clients, an email politely outlining your new rates is the way to go.

In any case, while in principle John's absolutely right that raising your rates automatically by the annual inflation rate is only reasonable, my experience is that clients will come back saying that they haven't been able to raise their rates with end clients, the market is ever more competetive, and so on. But you should stick to your guns - I only lost one regular (fortunately minor) client after raising my rates last time.

I think it helps, as Dallas says, not to ask too often. Again in principle John's absolutely right but in practice once a year may be too often for your clients to swallow. I raised my rates with regular clients after 3 years and am planning to do so again at some point this year, 2 years after my last increase.

Of course, if you do succeed in negotiating a rate increase every year, more power to you!


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Madeleine MacRae Klintebo  Identity Verified
United Kingdom
Local time: 17:49
Swedish to English
+ ...
But I DO like arguing Jan 24, 2008

John Cutler wrote:

That figure is easy to find in the news and is an official figure released by the government. It's a type of increase that (technically) no one should be able to argue with.



Which figure are we talking about? RPI,CPI or some other PI? What factors are included? Mortages - yes/no?

Just the other day I read an article about how the index used to calculate pay for police, nurses, etc. was one of these. However, when the same (?) civil servants calculated the interest rate for Student loans (which many of these professionals will be paying) they used another index. Guess which calculation used the higher index?

[Edited at 2008-01-24 21:29]


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Milton Guo  Identity Verified
China
Local time: 00:49
English to Chinese
+ ...
Pork Price Jan 27, 2008

I strongly agree with Dallas

The inflation is right here knocking at the doors, pork price has more than doubled and wehn I went to supermarket this morning, I found even the price of bean curd (Toufu) had increased by 50 cents from 1.50 to 2.00.....while prices of gas, edible oil, eggs, daily necessities are now on increase.


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Jacques DP  Identity Verified
Switzerland
Local time: 18:49
Member (2003)
English to French
Increase your rates with NEW clients and be prepared to loose the old ones Jan 30, 2008

In my experience, you will have to loose some (and even most) of your old clients. When you started your activity, it made sense for you to have low rates. But as you become more experienced and established (and a better translator), it makes sense for you to raise them. The agency, on the other hand, is probably still in the same situation. You may be super-eloquent when asking for the raise, but the truth is that your interests don't coincide anymore.

Be friendly but upfront and firm, as Vadim suggests. Even if your new rates are not acceptable to them, you can stay in good terms. They may call you for an especially difficult or important project (paying your rates), or provide references.

People saying they keep their old clients because they like them (despite their miserable rates) may be rationalizing their fear of the unknown. To avoid risk, start increasing your rates with NEW clients. When you secure a few relationships at higher rates, then you can adjust the rates of your old clients without being afraid of loosing them.

Please note I do not recommend the same behaviour in love relationships

Good luck.


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Rob Grayson  Identity Verified
United Kingdom
Local time: 17:49
Member
French to English
TOPIC STARTER
A sensible idea Jan 30, 2008

Jacques Du Paquier wrote:

To avoid risk, start increasing your rates with NEW clients. When you secure a few relationships at higher rates, then you can adjust the rates of your old clients without being afraid of loosing them.


A very sensible idea.

Please note I do not recommend the same behaviour in love relationships


I hope you're not speaking from experience....

Rob


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Jacques DP  Identity Verified
Switzerland
Local time: 18:49
Member (2003)
English to French
No! Jan 30, 2008

I hope you're not speaking from experience....


In that domain I only work with one agency at a time

(Sorry for off-topic, but needed to defend my reputation)


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