How to address the issue of rates increase with clients?
Thread poster: Maria Martins

Maria Martins  Identity Verified
Portugal
Local time: 17:23
English to Portuguese
+ ...
Feb 9, 2011

Dear fellow translators,

I've been working on translations since 2005. When you're a beginner you tend to provide discounts and lower rates in order to get as many clients as possible, to win a reputation and gain experience.

Then came the crisis in 2008 and I even had one or two clients that asked to temporarily lower my rates. Of course I had to endure because you want to keep the client and you understand the sacrifices to be made in times of crisis.

Last year a client came forward and asked me if I wanted to raise my rates, something I found very refreshing.

But in 2011 I started to analyse the prospects of freelance workers. A worker on the pay-roll has some benefits like health insurance and salary increases and even if these increases aren't substantial, at least they compensate for the inflation rate. And in most cases those increases are annual. Should they be out of job, they also have the unemployment benefits. And there's the maternity leave and sickness leave.

I don't want to bother you with a long post. How are freelance workers supposed to cope with the inflation, if we tend to keep the rates constant, as a mean to satisfy our usual clients. I mean when you've been working with some clients for 5 years, how do you address such question? Because the problem is that they won't address the issue for you, will they? And if with time one gains more experience and increases the quality of our work, why shouldn't we be rewarded for that?

And the reality is that we must move forward in our lives and the prices tend to increase everywhere. When we go to the supermarket, they aren't concerned about loosing us as a client. We simply endure the price increase because we have to eat.

The rates I use with my clients vary a lot, since more or less they were proposed by the clients themselves. One thing is for sure, I believe in the quality of my work and the truth is that, with the exception of one or two months in the year, I am constantly being requested for translations. So, my outlook on the subject is that if we increase our rates, then at least we will find out who is with us just for the rates and who values the quality of our work.

So I'm looking for a brainstorm here, some suggestions in case you find yourselves in the same situation.

Thank you.
Maria

[Edited at 2011-02-09 13:42 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 17:23
Member (2007)
English
+ ...
The new pay for the old, to a certain extent Feb 9, 2011

mjmartins wrote:
How are freelance workers supposed to cope with the inflation, if we tend to keep the rates constant, as a mean to satisfy our usual clients.


You can't keep your rates constant, that's all there is to it.

The first thing to do is to raise your prices regularly for new clients. If regulars are paying X, then quote X+10% for new clients.

Long-term clients should benefit from fixed tarifs for as long as possible, of course. A price rise every 3 months will send them to your competitors. However, there comes a point when the gap between the tarifs for new and long-standing clients is just too big to bear. Then you need to present them with a tarif increase. Hopefully, by that time you'll have a nice lot of new clients paying healthy rates so if the occasional "old" client goes elsewhere it won't be a major disaster.

At worst you'll lose a client who has never had any cause to complain and who accepts the reason for the price rise. He'll still think of you favourably, recommend you to other, richer colleagues and may even come back if he can.


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Soonthon LUPKITARO(Ph.D.)  Identity Verified
Thailand
Local time: 23:23
Member (2004)
English to Thai
+ ...
Consumer index Feb 9, 2011

For simplicity, I raise my fee rate annually based on local consumer price index [irrelevant with many clients, though] by explaining about my professional growth rate.

Soonthon Lupkitaro


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Jean-Pierre Artigau
Canada
Local time: 12:23
English to French
+ ...
Indirect way Feb 9, 2011

Like Sheila, I think if you have a regular inflow of new clients, you raise your rates for them.

You don't have to keep "consistent" rates (more or less equal or comparable) for different clients, except if they know each other and are able to make the comparison themselves (e.g. two services of the same company).

I suggest you also look for statistics of the rates charged by translators in your country. In places where the profession is well organized like Canada, these statistics are available (I don't know about Portugal). This will allow you to know your "position" in relation to an average. Then consider where you should stand in relation to this general image of your profession in your country.

If you want to increase rates for a particular client, you should take the opportunity when he wants to send you a particularly difficult (in his perception) text, or with an unusual short deadline, or when you feel you are the only translator available and he will be in trouble if you say no. Let's call this an "opportunistic" raise.

Translators also tend to compare just "rates" (per word) applied to different clients; however I think other criteria must also be considered, especially your "productivity" (i.e. number of words translated per hour of work). Your rate (price per word, in euros or whatever) times your productivity (number of words per hour) will give you an hourly income (in euros per hour of work). I think this is more adequate than comparing just rates.

If a given client pays 10 per cent less per word than your average but you can translate 30 per cent more words because it's all easy stuff, he ensures you a better income than your average client. Of course keeping track of the time spent on each project can be time-consuming, but it's also quite informative.


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Sarah Silva  Identity Verified
United Kingdom
Local time: 17:23
Member (2008)
German to English
+ ...
New clients are key Feb 9, 2011

I agree with Sheila. I started freelancing in 2008 and did tend to offer on the low side (though many customers I approached still insisted I was too expensive!). Over the last year or so I have gained many new customers at higher rates and now my average rate is a lot higher.

Like you, I am contemplating a slight rate increase for some older lower-paying customers though currently stick with the rate negotiated originally. I anticipate a lot of thought going into selling and justifying these rates but it will be worth it!

Sometimes a regular customer that you have a good relationship and history with but who pays a lower rate is worth keeping. You know and like how they work, what they expect and so perhaps expend less time on paperwork and complicated new systems - the overall hourly rate could be lower than for a customer with more complicated procedures that pays a higher rate per word/line.


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Bilbo Baggins
Catalan to English
+ ...
Decide a minimum and review your portfolio Feb 9, 2011

Decide a minimum rate (if you really want to be thorough, calculate all your costs and build in hols, other extras, CPD, equipment costs, ect etc and work back to what you want per hour/per word).

For each new client, apply AT LEAST that rate, or preferably, that rate PLUS (especially if you already have a lot of work).

Examine each existing client and see which ones fall below that rate.

- For the ones that you mightn't mind too much if you lost, notify them of a new price - or if the jump would be a biggish one - of a gradual increase to X over X years. Do this also with the ones who pay far too much below your minimum.

- For the ones you wouldn't like to lose, consider what you could do, depending on how important they are/the subject is to you, what differential there is between their rate and your minimum, and other factors like generous deadlines, a good personal-professional relationship etc.

Decide a strategy for the future. EG, I don't apply annual increases, usually 2 year ones, but I DO apply those. Another thing I do is refuse to drop my minimum rate except very rarely and only on a job by job basis (that is, I make it clear it's an exception, I don't even put the reduced rate on the bill, I either give a lump sum price or include a "special discount") and I always make sure I get something in return (e.g. extra time).


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Maria Martins  Identity Verified
Portugal
Local time: 17:23
English to Portuguese
+ ...
TOPIC STARTER
Thank you! Feb 10, 2011

Dear Bilbo, Sarah, Jean-Pierre, Soonthon and Sheila,

If you don't mind, I will reply to you all at the same time. Your advices all seem very wise and they reflect different approaches, which are of course based on your individual experiences. I guess I will have to analyse each client and decide on the best approach, case-by-case.

It was very important to hear your suggestions. I tend to see every client like a 'close friend', but the truth is that there is a business relation, besides the personal one, so we can't try to please everyone and always be the nice person.

Also, it comes out very easy to settle in and always work with the same clients, so I guess I also need to look out for new clients, so that I can reach a more confortable average rate.

Regarding the idea of keeping track of the time spent on each project (Jean-Pierre), I have been using a software called myMacTime. This one is for Mac but I'm sure there should be something equivalent for Windows. It works like a time clock (always visible at the top of the screen) that you can start & stop with just a click. It's possible to register the time for different tasks (which can be grouped by clients) and it even calculates how much you should be earning considering the number of hours and a predefined hour rate. I also find it useful to remind me of workbreaks.

Thank you so much for your ideas.

Kind regards,
Maria
PS - When the time comes, I will come back to this post and report my results in this matter.



[Edited at 2011-02-10 00:52 GMT]

[Edited at 2011-02-10 02:47 GMT]

[Edited at 2011-02-10 02:51 GMT]


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