Freelance Rate Negotiation Email Sample: How to ask your client for an hourly price increase
As a freelancer or a contractor, asking for more money is a daunting task. In the beginning, you may have started working at a discounted price just to get your foot in the door, but over time as that client relationship develops, you may be selling yourself short. The negotiation process with an existing contract client is touchy, you don't want to offend them and lose the relationship entirely. To help you through the process of renegotiation, we put together this rate increase letter sample that you can more or less copy and paste.
Freelance Rate Negotiation Email Sample Template
We encourage you to check our freelance hourly rate statistics to determine a fair hourly rate before you do anything. Next, plug that rate into the template below. If you can give a justification for why you are charging more and point to hard data like comparable freelance rates, it will put your client at ease that they aren't just being overcharged for no reason.
Anyways, here is the price negotiation letter template you can use as a freelancer, contractor, or agency. Everywhere we use "I" and "my", you can easily change with "we" and "our", depending on the context of your business.
Every [TIME PERIOD], I run an audit on the costs of running my [AGENCY, BUSINESS, CONSULTANCY] and the hourly rates I charge. I do this to make sure that I can keep delivering for you and my other clients, all of which I value dearly.
After doing some analysis, I've determined that I will need to increase my rates from [CURRENT RATE] TO [NEW RATE]. I came up with this rate by doing market research and looking at the rates of other [FREELANCERS, CONSULTANTS, CONTRACTORS] with similar expertise, experience, and location on contractrates.fyi.
Please let me know if you have any concerns, otherwise I would like to begin charging this new rate on [DATE].
As I stated before, I really value you as a client and hope we can continue this working relationship far into the future.
All the best,
Why does this price increase template work?
The simple reality is that the wording won't really affect whether or not the client agrees with giving you higher payment. Some clients just won't negotiate. The instant you want to charge more is the instant they'll replace you with somebody cheaper. That's a bad client, but not an uncommon client.
Good news though - relationships matter. If your client is reasonable, you've done good work for them, and you have good market research to back up your requested rate, there's a decent chance they are fine with paying you more. Some clients are actually happy when you bring this to their attention because they want to continue working with you and giving you fair pay.
Research the Market Rate to Understand your Minimum Rate
A piece of advice: it is absolutely critical that you are asking for a fair market rate. If your client gets any sense that you are ripping them off, that relationship will sour and you won't have them as a client anymore. It's just a good idea to explain where you got the increased rate from.
To find fair market rates as a contractor or a freelancer, just check out our freelance rates list. It's a list of hourly rates submitted by freelancers around the world, and is basically the best resource to figure out what the fair rate for your specific skillset actually is.
After you figure out what your specific rate is by using that tool, we recommend sending the tool to your client so that they can understand where you came up with this price increase.
Why you should ask for a raise
Often times, short term clients turn into long term clients. There are so many variables that can lead to higher rates, but the most obvious among them are the following factors:
- Inflation (increase in the cost of living and running your business etc.)
- Your value increases over time. As you get more familiar with a client and gain more experience overall, your service and expertise become much more valuable.
- You have more clients asking to work with you than you have time for. If you are in demand, naturally, you can increase your rate.
- The scope and responsibility of the initial relationship has grown. Say for example you started as a content writer, but over time your role has shifted into that of a full blown Marketing Consultant. You should be paid for this change in scope.
- You started providing your services with the client at a lower rate to get your foot in the door, but have since proven yourself a reliable and effective entity
How to Raise Your Rates on Current Freelance Clients
Well, the email template above is a good start for raising your rates. It's important that you understand what the fair market value for similar services actually is, and never going above that unless you are at a stage where you are turning down jobs often.
When you run a freelance business, if you are good, you will eventually need to raise your rates and often times you'll have to do it with existing clients. Whether it's inflation, new skills, whatever - the time will come for you to re-negotiate rates.
The best way to do this is a simple enough process, here are the steps below:
- Figure out what the fair market pay is for your skillset
- Use a price increase email template of some form, fill in the necessary information
- Send it to your client
- Hope it's within budget and that they say yes
- Profit from the negotiation and start seeing your rate increase!
It really is that easy. You don't need to overthink it - how much time have people spent trying to decide how to word something, when ultimately the specific words don't really matter. The budget and your relationship with the client are the most important factors, not the specific letter that you send them asking for higher pay.
My client refuses to pay a higher rate. What should I do?
Ultimately, if a client isn't paying you what you are worth and they aren't willing to negotiate, you need to make a decision.
Are you okay working for this client earning way less money than the value of service you provide?
If you are in a fortunate position to replace that client easily - you should do that. There are plenty of potential clients around the world that are happy to negotiate with freelancers, especially when it's a new assignment. New clients have no history with you - they don't know what your hourly rate was prior to meeting them. The negotiation process with them is much less painful, because it's pretty much expected.
If you are not in a position to replace them easily - it's a hard call. You can either drop them out of principle, or you can continue to work for them because you need the steady stream of income they provide, even though their budget is far too low.
If you want to stick with them as a client, you could potentially explore adjusting your pricing strategy with the client. Rather than charging them per hour, you could explore working for them on a retainer. Priced correctly, you can end up earning more money but for less work and at no extra cost to the client.
Running a business, whether you are a freelancer or an agency, is not easy. Part of business is negotiating, and sometimes the client's offer and what you are willing to do won't align.
Know when to walk away
Sometimes, negotiating rates doesn't go well. The client can be unwilling to pay the higher rate. Most of the time, it has nothing to do with you, your skills, the job you've done so far - they just simply can't afford it. You can always try to talk with the client to come to some sort of deal, whether it's reduced hours for increased pay, or a switch in payment structure, or so on.
If you can't reach a fair deal though, there comes a point where it is in both parties best interest to break the relationship. End it with this client, and find a new prospective client that is willing to pay you what you are worth. Freelance rates globally are on the rise, and the sad reality is people very often get locked into long term client relationships where they never increase their rate to meet the new market norms.
If the new client asks for justification or an explanation of the rate you want to charge, easy! Point them to us, we have a tool that exists for that reason exactly. Often times clients are happy to pay the price for somebody that knows what they're doing, so long as the cost seems fair and they aren't being stiffed.
But don't close the door
If you are in the unfortunate position where negotiation fails and you have to end the relationship with a client - be sure not to make it personal. Business is business, freelancers negotiate every day, and it doesn't always work out. Let the client know that you will be happy to come back and work for them when their budget grows to fit your freelance rate.
One of the most obvious and best ways to get more clients is referrals from past clients. If you show them respect and are fair, they make recommend you to a new potential client or 2 that does have budget for your specific services.
Share your value
In the future, make sure clients are aware of the value you provide. A good relationship with a client is one where you provide them significantly more value than they provide to you. For example, if you are a freelance writer and your copy boosts sales of a client product by $500k, you have a value of $500k. Obviously you don't want to charge $500k, but if the client is aware you provide that much value, they will probably be willing to pay you more, so long as they are still coming out ahead when they pay you.
When it comes time to go back into the rate negotiation process, it will be so much easier if you can tell them "I provide x amount of value, but I only charge a fraction of that. You make a ton of money with me around, and you will still come out ahead even if I doubled my freelance rates."
Recurring work as a freelancer or agency is the best kind of work - it's predictable income. One of the biggest unknowns you deal with in this industry is the unpredictability of it since you are not bound to the protections that full time employees have. It's an unfortunate reality that we deal with, but that's why it's important to bake that risk in to your hourly rate.
In the case of a recurring client, it's critical to just be fair when you ask for a new rate. You don't want to offend them and scare them off, you need to be clear and explain how you came up with the number, and why it's worth paying you this new rate.
Like always, we really recommend using the hourly rate list tool. See what you can charge by seeing what others are charging. Show your client what they should pay you by showing them what other people with the same skillset are being paid.
If you're just here for the email template, scroll up! It's at the top. If you are somebody that read the full article - congratulations! You are a rare breed, and I really hope you got some value by reading this.
If you haven't yet, please contribute to our hourly rates price list. This tool is critical for increasing the rates of freelancers like yourself worldwide.