Web designers are, generally, afraid to raise their prices.
However, a good web designer will develop a website for a client that, if regularly updated, will be a powerful marketing tool for years to come. And, that’s worth money.
The client billing life-cycle
Usually, if you’re billing for website design and development, you start off charging fixed rates for specific jobs.
After that, you develop a good relationship. And what does a good business relationship mean? One word: Trust.
So, now the client trusts you and you move to an hourly rate. The client doesn’t want to over-pay if you over-estimate a job and charge too much. You don’t want to be out-of-pocket if a project takes longer than expected.
So, with some consultant/client relationships, the hourly rate is mutually beneficial.
Raising prices due to “inflation”
However, after a while you can no longer justify working at the hourly rate set up when you were starting out.
One of the hardest emails I ever had to write was to inform a couple of regular clients that I was putting up my hourly rate. Here is a sample from the email. Feel free to use it yourself:
I thought I’d mention that, as I have increased my hourly rate for my clients to $XXX/hour to reflect price rises in the industry here and abroad, I will want to increase your rate at some point in the future. Of course, you always get a special rate because we’ve been working together for a while and I really enjoy working with you. However, next year I will have to review the hourly rate with you.
Here’s how the client responded:
As you can see, this was a few years ago when there was a bit more inflation than now. Even so, I was flabbergasted by the positive response from my clients. It shows the benefit of the strong business relationship.
Increasing hourly rate for new clients
As alluded to above. You don’t necessarily have the same hourly rate for all your clients. So, if you feel your experience and skillset has improved, you can ask for higher hourly rates from your new clients.
However, I don’t like to do this too much. I prefer the same rate for all clients as it keeps things simple.
This is another great idea for increasing prices from my friend John Romaine.
If a client phones you or emails you in the evening and wants something doing straightaway, you can add a 30% priority surcharge to your hourly rate.
Keep it professional
Remember you are a design business not a freelance designer. Don’t be too “pally” with clients. If you are too friendly with them, they may start to expect “friend’s rates”.
Late payment charge
It’s sometimes a good idea to add to your invoices and/or contracts that after a certain time (30 days, for example) a certain percentage (4% above bank rate, for example) will be charged as interest on outstanding balances.
This is something you should only use very sparingly.
Making sure you get paid for “project creep”
Project creep (sometimes referred to as “scope creep” or “brief creep”) is where you are asked for extra features or functionality that weren’t mentioned before. Project creep is the bane of a web designer’s existence as means extra work for no money.
Avoid project creep (or get paid for it) by specifying both deliverables and exclusions in the contract or proposal.
Specify exactly what you will do and what you won’t do for the project. All extras should be charged at an agreed hourly rate.
Don’t publish or advertise your rate
I would never put any of my rates online – hardly anyone does and there’s a good reason for this.
Don’t get greedy
Above all, charge a fair rate for a premium service. This is the only way to run a successful web design business.
You can do it
You ask for premium rates as long as you provide premium service. This way you’ll have a successful long-term online business.