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How do you tell clients you're going to increase your rate?
Thread poster: Tom in London

Tom in London
United Kingdom
Local time: 10:25
Member (2008)
Italian to English
Dec 1, 2008

... and get them to accept it? Is there a risk that you might lose regular clients? What's the best way to break the news?

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patyjs  Identity Verified
Mexico
Local time: 04:25
Spanish to English
+ ...
I was about to ask the same question... Dec 1, 2008

I don't think it's much of a problem with direct clients. An impersonal, business-like approach is probably best stating the rate of increase or new prices and the date it will become effective.

I'm not sure about the best way to go about this with agencies. I have some agency clients who I started working with on their terms, which haven't changed for 2 years. Is it better to ask for an increase and see what they offer or tell them what you want outright?

Thanks


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Stéphanie Soudais  Identity Verified
France
Local time: 11:25
Member (2006)
English to French
see other threads Dec 1, 2008

http://www.proz.com/forum/money_matters/95132-best_approach_to_increasing_rates.html

http://www.proz.com/forum/money_matters/61406-increasing_rates_for_the_new_year.html

http://www.proz.com/forum/being_independent/16231-increasing_rates_for_agencies.html


Stéphanie


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Victor Dewsbery  Identity Verified
Germany
Local time: 11:25
German to English
+ ...
Depends on several things Dec 1, 2008

Recently I agreed a rate increase with an agency over the phone, on a friendly basis. They were very willing to accept the rate in order to continue our working relationship. Of course, I have a very positive relationship with that agency, and have worked regularly with them for a few years (as far as I know they send me most of their jobs in my main specialism and language pair).

Sometimes this sort of solution is possible (and in the long term, I will go out of my way to find time for such agencies even when the schedule is tight, so I will do more for them and less for other agencies).

A few years ago, when I decided that I wanted to escape from the cheap end of the market, I announced my rate hike to a couple of agencies by e-mail, and lost a couple of substantial clients as a result (no hard feelings, we just agreed that our idea of rates no longer matched). So within a short period, I lost clients that had previously provided a third or more of my turnover. But jobs came in from other sources, so I didn't have any slack period. My choice was either to make the jump at that point, or to remain caught at the cheap end of the market for ever.

So yes, there is a risk that you will lose regular clients. If you are not confident about your ability to find better-paying clients elsewhere, one approach is to discuss the issue with your present clients (e.g. "I would like to raise my rates to xxx, how would that affect the jobs you send me"). The answer to this question will tell you something about these clients. And if you can't get them to raise the rates, at least it gives you an idea how much effort you will need to invest to find other clients. You can then look for other clients, and over a few months you can try to "phase out" the clients that pay less.


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Marie-Hélène Hayles  Identity Verified
Local time: 11:25
Italian to English
+ ...
What Victor said Dec 1, 2008

My strategy is essentially the same as Victor's (with very similar results, too). Try calling your more important clients, do it by e-mail with the less important ones.

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KSL Berlin  Identity Verified
Portugal
Local time: 10:25
Member (2003)
German to English
+ ...
I suppose it matters who your agency clientele is Dec 1, 2008

The low-end file-shifters are probably rather price-sensitive. So avoid those and deal with serious agencies. I have a number of ways of dealing with price increases:

(1) Base price increase in hourly rates as well as line/word prices. Sometimes I simply announce these on short notice, sometimes I give advanced warning of several months so that the agency has time to raise prices for the end client or find another translator.

(2) Modify the terms of any CAT schemes in place. This is a take-it-or-leave-it proposition as far as I am concerned. Where the schemes have proved reasonable, I leave them alone; where they haven't, I get out the thumb screws.

(3) Devise value-added surcharges. You should be doing this already for dealing with bad formats, scanned or PDF files, etc. If not, start. Be firm about applying rush charges any time you feel the least bit of time pressure or are asked to work when others would not "usually" do so.

(4) If they whine about the "economic crisis", remind them that they'll need a good translator to handle all those bankruptcy documents, and you expect to be very busy. Invite them to reserve their position in the queue with a "preferred" (i.e. premium) rate.

(5) Let them "bid" for services. If you have two requests that come in for jobs of roughly the same size, one with a regular rate of 15 cents per word and the other with 20, invite the 15-center to take the "pole position" by paying 21 cents.

(6) Let the client know how much you enjoy working with him/her and how hard it has been to avoid rate increases for so long given that you are very busy and most clients regularly pay 5 to 10 cents more per word (in other words, every time someone new calls, just raise your price some more if you feel like it's time for a day off). Invite them to suggest a rate increase that would still enable them to make a good profit but would allow you to cope with the higher cost of living, mistresses (why should Mr. Ramsay have all the fun), etc.

(7) Invite clients to impose "appropriate" surcharges on a job which they can afford. Most people will make a reasonable effort, because they don't want to look cheap.

(8) Sell pre-paid blocks of service at the old rates. Doesn't increase income, but it's good for cash flow, and if they want their 30-/60-/90-day terms, it'll cost extra.

(9) Speaking of terms, start charging more for longer payment terms. Be very open about this and invite clients to pay sooner or pay more. Either way you win - cash flow or more cash.


These are just a few of the many strategies I have applied to keep income rising ahead of inflation. Creative minds can come up with many others. There most be more than 50 ways... let's hear them, people!


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Tom in London
United Kingdom
Local time: 10:25
Member (2008)
Italian to English
TOPIC STARTER
Mistress costs Dec 1, 2008

This is all excellent. I'm working out my % for a mistress now.

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KSL Berlin  Identity Verified
Portugal
Local time: 10:25
Member (2003)
German to English
+ ...
If I were you... Dec 1, 2008

Tom in London wrote:
This is all excellent. I'm working out my % for a mistress now.


... I would budget for a better one that Gordon had. One who doesn't have such a big mouth


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xxxVerse 5B
Local time: 11:25
English to Serbian
+ ...
... Dec 1, 2008

It is best to estimate the real price in the beginning, making them inform you what kind of content, and at what work pace, you will be dealing with in the future, so you can estimate the price. It is much trickier to do it later.

You can use solid professional arguments, e.g. complexity of content, too fast pace and pressure, etc..

Good luck.


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Angela Dickson  Identity Verified
United Kingdom
Local time: 10:25
French to English
+ ...
Misunderstanding Dec 1, 2008

Verse 5B wrote:

It is best to estimate the real price in the beginning, making them inform you what kind of content, and at what work pace, you will be dealing with in the future, so you can estimate the price. It is much trickier to do it later.

You can use solid professional arguments, e.g. complexity of content, too fast pace and pressure, etc..

Good luck.


'Verse 5B', I think you have misunderstood - I doubt very much that Tom wants to raise his rate for a particular job, having agreed a rate for that job. I think he probably just wants to become more expensive in general (a laudable aim) and has had plenty of good advice already.


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xxxVerse 5B
Local time: 11:25
English to Serbian
+ ...
Misunderstanding II Dec 1, 2008

Angela Dickson wrote:

Verse 5B wrote:

It is best to estimate the real price in the beginning, making them inform you what kind of content, and at what work pace, you will be dealing with in the future, so you can estimate the price. It is much trickier to do it later.

You can use solid professional arguments, e.g. complexity of content, too fast pace and pressure, etc..

Good luck.


'Verse 5B', I think you have misunderstood - I doubt very much that Tom wants to raise his rate for a particular job, having agreed a rate for that job. I think he probably just wants to become more expensive in general (a laudable aim) and has had plenty of good advice already.


You have misunderstood . I never thought it was for a particular job, but it is obviously for a particular client, because he mentioned " regular clients", with whom he obviously already had fixed work rates. . Or am I hallucinating?


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Textklick  Identity Verified
Local time: 10:25
German to English
+ ...
Be positive Dec 1, 2008

Kevin Lossner wrote:

(6) Let the client know how much you enjoy working with him/her and how hard it has been to avoid rate increases for so long given that you are very busy and most clients regularly pay 5 to 10 cents more per word (in other words, every time someone new calls, just raise your price some more if you feel like it's time for a day off). Invite them to suggest a rate increase that would still enable them to make a good profit...


Make it a selling exercise. ('I need your advice'....that kind of line)

Don't do it across the board overnight, but work your way through individually to gauge the temperature.

Also consider Victor's invaluable advice about 'moving on up from the cheap end'.

And remember, you are not working at their rates, you are charging them your rates. If I buy a loaf of bread, I don't tell the store what 'my price is'.

Bonne chance - go for it! As Angela says, it's a laudable aim.
Chris


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KSL Berlin  Identity Verified
Portugal
Local time: 10:25
Member (2003)
German to English
+ ...
Hold a raffle Dec 1, 2008

I ought to try this one of these days. If you have a dozen or two clients that are frustrated at always hearing "no" from you, who are simply dying for your service, then plan a raffle at which you sell tickets for € 50 or € 100 euros or so. The lucky winner gets a 5 hour (or 6 or 8 whatever you like... I'd go for 4 hour) block of your time during which all phones are turned off, no e-mail is checked and the dog is chained to a tree out in the yard (well, maybe not the last part). Have the drawing done by a neutral organization, maybe a local kindergarten or charitable organization, which gets a € 50 euro contribution for helping out (tax deductible, of course). If your services are enough in demand, you could potentially make thousands for those few hours, though you might want to limit ticket sales so participants can judge risk/benefit. That's where picking the right partner (kindergarten, etc.) to draw the lucky winner can help by encouraging a clouding of good judgment. You can include creative consolation prizes as you like.

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Lawyer-Linguist  Identity Verified
Portugal
Local time: 10:25
Dutch to English
+ ...
Yep ... Dec 1, 2008

Textklick wrote:

Don't do it across the board overnight, but work your way through individually to gauge the temperature.



That's exactly what I was about to add Chris - I always tackle my 'outer circle' clients first, judge over a couple of months how they react, and then start applying the same increase slowly to each of my 'inner circle clients'. Whole process probably takes me six to nine months, but it's an approach that has paid off to date.

That way, if one of the inner circle clients were to suddenly stop sending work, I could always promote an outer circle client into the inner circle. Touch wood, nobody has reacted that way to date, but I like to plan for what could happen, as everyone has their limits.

Any fresh leads are quoted the new and higher rate right away.

Also worth mentioning is that I have three rates depending on whether the legal translation I receive is general, semi-specialised or highly specialised. (I do legal translations a good 90-95% of the time). The general rate needs to be the most competitive as any 'legal translator' worth their salt can tackle a commercial lease, general terms and conditions, employment contracts etc. It doesn't help I price myself out of that market, so I charge a healthy rate but nothing over the top. My hourly income still remains high as I can turn those type of translations around very quickly.

The harder it all gets from a legal point of view, the smaller the pool of available, genuinely qualified translators. Those are also the translations it's easier to impose increases for more frequently.

Good luck Tom - hope it works out.
Debs

[Edited at 2008-12-01 19:04 GMT]


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KSL Berlin  Identity Verified
Portugal
Local time: 10:25
Member (2003)
German to English
+ ...
Sell service contracts on eBay Dec 1, 2008

Make the starting bid your current average rate and invite all your clients to join the fun. Service to be delivered as soon as the money is in your account of course. You'll have to think about how to handle the job scheduling - reserve a certain time block in a week, be flexible or whatever. It's your business - you figure it out.

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