How to increase my fees?

[sideclick]

Hi All,

Ten years ago, I signed up my first client on annual retainer remote IT support contract. I have increased my fees with this client once within the 10 years he's been with me and that was about 4 years ago.

Admittedly, I'm charging this client some very low rates when compared to other IT support providers.

I'm currently charging the client £80 per year, per computer and this client is very demanding and I'm offering him 24 hours service around the clock. I have other clients which I'm charging £360 per year, per computer for a maintenance contract from Mon - Fri, 9 am - 18:00. This client also introduced two other clients (his relatives), and I'm also charging them the same rates.

Things have changed immensely within the IT industry over the last 10 years and I want to bring these clients up to speed with the current rates, and I also want to provide them with a Mon - Fri, 9 am - 6 pm service like my other clients.

How do I increase my rates on these clients? Their contracts are coming up for renewal early next year and I want to find a solution before then, as I don't want to go another year contemplating over these low rates I'm currently charging them. I'm finding it very difficult to increase my fees for these particular clients, as I don't want to get into a confrontation with them. Sometimes I feel like just to cut them loose and others advised me just to give them the increased rates and stick with it, as they are not going to get it any cheaper elsewhere.

What do you guys think?

My long-term goal is to move my business forward and employ some extra help, but this is not possible with the rates I'm charging these three clients.

[NotAllThere]

I'm not sure what you're expecting here. You know what to do.

You tell the client that the current arrangement is unsustainable, and what your new terms and conditions and rates are. They either sign up or don't. Good luck with finding another provider. You make it clear that you don't need them - they are causing you a loss and inhibiting the growth of your business. Of course you say it prettily with a bow on top.

If you don't like doing this stuff yourself, hire someone who's good at it.

[northernladuk]

How can you expect to grow as a business if you can't approach your clients and do business with them?

[silverlight1]

Clearly outline the services you provide (they will probably have forgotten)

Focus on the key value that you add and how you help their business and have had a partnership with them

Sometimes the other way to make money is to keep the basic service the same and then charge more for add-ons (a bit like when you go to a restaurant and they make all their profit from the drinks you buy and the olives and bread they serve you)

Remember you actually have quite a lot of power as a supplier / provider but you need to gently remind them of this

[Lance]

Clearly outline the services you provide (they will probably have forgotten)

Agency doesn't care.

Focus on the key value that you add and how you help their business and have had a partnership with them

Agency doesn't care.

Sometimes the other way to make money is to keep the basic service the same and then charge more for add-ons (a bit like when you go to a restaurant and they make all their profit from the drinks you buy and the olives and bread they serve you)

Agency still doesn't care.

Remember you actually have quite a lot of power as a supplier / provider but you need to gently remind them of this

I still can't see how the agency are caring yet...
Tell them you want xx per day extra or you're not renewing... Then they start to care.

Best to warm up the client as well, but don't be surprised if the client doesn't care either. Especially if the client are already paying market value for the OP.

[jmo21]

Agency doesn't care.


Agency doesn't care.

Agency still doesn't care.


I still can't see how the agency are caring yet...
Tell them you want xx per day extra or you're not renewing... Then they start to care.

Best to warm up the client as well, but don't be surprised if the client doesn't care either. Especially if the client are already paying market value for the OP.

What agency?

[jmo21]

OP - it's sink or swim time.

You've done well to get these and other clients, but it is not sustainable.

Decide on a new rate, tell them that is the new rate from whatever date your contract ends.
It doesn't need to be a confrontation.

They'll probably be annoyed at the prospect of a massive price increase (in their eyes). Just tell them the facts (1 increase in 10 years, vastly underpriced rate).

[b0redom]

Or maybe at renewal time, tell them the current going rate is £360/year, and you need to bring them inline, so if they'll sign up for 5 years over the next 5 years you'll increase it gradually?

[Lance]

What agency?

hah. Fair cop....

Mixing my drinks. I thought I was still on this thread. https://www.contractoruk.com/forums/...ot-client.html

Need to stop task swapping and do what I'm being paid for.

[andyg]

Have you checked the prices being offered by your major competitor who offer similar services for this particular client? Is there a chance that you would lose this particular client if you suggest that you are going to raise your fees?
As another poster suggested, approach the client and state that you will be raising the fees inline with the market but you can do this over a time period as long as they sign-up for a long-term contract. You could also suggest that you will offer a discount on the new price if they pay the invoices within a short period of time (14 or 30 days) to help with your cash-flow.
One assumes that you have a good relationship with this client so will know how far to push them.