Learned It From Experience: L.I.F.E. Lesson #17: How to Increase Your Fees
Fees are certainly the topic I get the most questions on.
How much do I charge, how do I increase my fees, how do I communicate increases… so let’s dig in.
You need to plan for a price increase and communicate that to existing clients so they can expect and prepare for it. I suggest sending a personal email and adding a paragraph to your invoices stating that beginning on XYZ date your rates will be increasing to $. Giving your clients time to adjust is good business.
If you charge by the project, let them know that at the start of their next project that your rate is increasing to $. Keep that message on your outgoing invoices, but also communicate it to your clients. Especially your current clients that are in the middle of a project. Remember it comes down to expectations. If they expect to pay one rate and are billed another that is when problems arise. Communicate clearly what your new rate will be and when it will take effect.
Explain the reasons for the rate increase. If they have been at one rate for 5 years, they are going to want to know why your rate is changing. Rising costs of business, experience in the field, and the value received each year you are in business. Here is a sample you can use:
Dear [client’s name]
Here at [name of company], we strive to provide a quality and honest service to every one of our clients. When you work with us, you will receive a unique design experience but we also strive to go above and beyond your expectations.
After reviewing our operating costs for [year], we have made the decision to increase our prices to [amount]. This change will go into effect on [date].
We appreciate your business and are grateful to be able to work with you on your design projects. If you have any questions or concerns regarding the increase, please reach out.
Respectfully,
[your name]
[name of company]
Finally, whatever you do, be confident in your pricing and your decision to increase them. Do not shy away from the hard conversations, because if you do, the angry client conversations are much harder to have.
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