The Gritty Virtual Assistant Blog

In my Dear Gritty VA column last week on Virtual Assistant Growing Pains, Julia Lilly of 360 Admin asked a great question. I thought it was good information and decided to share it as a post in case anyone missed the comments.

Julia Lilly:  This poses a great question… how do you present a raised rate to your customers without creating ill will? Do you give them six months notice or a gradual increase to the desired rate? I have only had my clients for 6-8 months, and I don’t want them to think it is part of my “strategy” to raise rates once I have them dependent on me. But, due to lack of experience, I did not set my rate properly in the beginning. Advice in that narrowed down area?

Danielle:  Great question, Julia!

Here’s what I do… I always give current clients a couple month’s notice and at the same time bring any and all new clients in at the new rates/fees. I tend to do fee increases at the beginning of the year so letters would go out to clients in November letting them know ahead of time what to expect and can plan ahead/budget for it.

I don’t know how many clients you have, and even though I really, really vehemently discourage fear-based decision-making, if you only have one client at the moment that you are very much dependent upon, you might decide to make just a modest increase. It will at least get them used to the idea that you are a business and a professional and fees are occasionally going to be raised for various reasons.

On the other hand, you might want to sit tight with that client and work to bring new clients on board at the new higher fees/rates. Once you aren’t so dependent on the first client, you can then bring them up to speed at the same rates as the rest so that you aren’t managing a bunch of different policies (too much administration and too many exceptions will slow your practice down considerably–you don’t want that).

Here’s a rough template of what I use in my own practice as far as verbiage for your rate increase letter goes:

“Dear [CLIENT],

As of [DATE], my monthly retainer rate will be increased to $[AMOUNT]. It has been [HOW LONG] since I have raised my fees, and this new rate will enable me to continue providing the best of service to you.”

Obviously, you will want to tailor the message to fit your own voice. My only caution is not to offer any drawn out explanations about why you are increasing your rates. You don’t need permission from clients to raise your rates and explanation only signals to them that you feel the need to rationalize or justify your actions. So don’t offer reasoning, just matter-of-factly inform them.

Now I will say that you can’t be overly concerned with “ill will.” The clients who feel they are getting value are not going to be concerned with that. Truly, most of the time, the people who have the most problem with raising rates are Virtual Assistants themselves, not clients. Most clients know this is business. They have to raise their own fees and prices periodically, too.

And the one’s who don’t want to pay more, really don’t want to pay in the first place. There has to be an equitable exchange of interests. You can’t work just to suit clients and their interests while neglecting your own or otherwise operate fearing their “ill will.”

Anyone who asks you to not charge for your value is asking you to deprive yourself of the ability to make a living, take care of your family and keep yourself and your business healthy. Would they ask themselves to do that? I think not. So you don’t need any client who has been taking advantage or otherwise doesn’t want to pay for your value. Let them exclude themselves. It will help clear your practice out of ill-fitting clients and pave the way for the ideal ones to come in.

And saying that, do be prepared whenever you raise rates to lose a few people. It’s just a natural progression of growth–and you will outgrow certain clients along the way. The ones you lose are mainly going to be the ones who were only there to get something for nothing in the first place. Their inability to grasp the importance of value or to properlize capitalize their business so that they can afford professional services is their problem, not yours. Save your time, energy and passionate expertise for the folks who do.