3 Reasons Your Rates Are Still Low (And How To Start Raising Them)

Golden Building SkylineIf your rates are lower than you want them to be, don’t blame the economy.  Don’t blame the state of your particular industry.  And for the love of the business, don’t blame the competition.

If your paychecks aren’t all you’ve been hoping for, you’ve got to take a good look in the mirror and think about how you’re running your business.

Here are 3 common rate-killing mistakes that could be keeping you scrounging rather than thriving.

Let’s dive in.

Mistake #1 — Not Investing in Your Skills

I think Brian Tracy put it best when he said this:

One of the smartest things that you can do is to invest three percent of your earnings every month back into yourself on personal and professional development, on becoming better at the most important things you do. In fact, if you just invested as much in your mind each year as you do in your car, that alone could make you wealthy.

If you’re honest with yourself, bells should be going off at this point.  If you’re not setting aside the time and the money to improve your skills, then why should your rates go up?  If you want to be worth more, you have to be worth more. You have to be willing to take what you’re already pretty good at and get incredibly good at it so justifying your increase is a no-brainer.

Now Take Action

If you’re thinking, “I don’t have the money,” stop wasting it.  I’m not making a personal call on your life, but most people say they’re broke while plunking down $5 for a latte or eating out more often than they need to.  Same goes for time, too.  You want more time?  Turn off the TV.  There’s a reason they call it the electronic income reducer (and if you’re truly strapped for cash, go see where to find affordable education for freelancers).

Mistake #2 — Not Leaving A Market You’ve Outgrown

Everybody enters the freelance market asking far less than they are worth – it’s the nature of the business.  As your experience increases, you may feel the pull to raise your rates, but eventually you’re going to hit a ceiling.  I found this out the hard way after my 30-day freelancing experiment – I wanted to earn more from writing, but I’d hit the peak of what I could realistically charge for article rewrites and basic copywriting.

To earn more, I had to accept the fact that I’d outgrown my market and look for a market that would support the higher rates that I wanted to charge — namely, writing for large blogs and creating original SEO-rich content for bigger businesses.  By looking for a new customer demographic I was able to more than double my rates in a short amount of time.  If you’re feeling like your rates have become stagnant, you may need to do the same.

Now Take Action

Think about the services you provide and the rates you charge.  Then ask yourself the simple powerful question: “What kind of customer usually pays a lot more for this kind of work?”  It may seem hard to believe, but you really can boost your rates simply by choosing a different kind of customer.

Mistake #3 — Not Maxing Out Your Confidence Levels

Confidence is the #1 factor in determining how much you can charge your clients.  It’s not about what you can do or how good you are, it’s about how good you believe you are. When you have high levels of confidence, you approach every aspect of your business differently, and you aren’t afraid to ask for what you are really worth to the clients you serve.  (You also aren’t afraid to chase bigger clients, either.)

The stumbling block many freelancers face ist that they think confidence is a character trait – something that some people have, and other people don’t — and they don’t think they can change it.  But that’s not true at all.  You can change your confidence levels in a heartbeat, and you can use that confidence to push your rates higher than ever.

Now Take Action

The simplest way to increase your confidence is to stop judging yourself and start judging the results you get for your clients.  How have you helped them?  How are you better than their other freelancers?  How are they better off having worked for you?  Get a stronger sense for how you boost their bottom line and you’ll feel your confidence levels surge.

Your Rates May Be Low … But They Can Change

If your rates are too low, then now is the time to start turning the tide.  Ask yourself if you’re making any (or all) of these three mistakes, and begin taking action as necessary.  And if you’ve got your own rate-boosting tips to add, share them in the comments below — and as always, thanks for reading.  :-)


  1. Matt says

    Excellent article.

    To piggyback on Mistake #3, I’ve found over the last 12-18 months that I can’t seem to charge too much. I freelance part time and for a long time simply felt that my work wasn’t valuable enough or since I was just one guy I couldn’t justify charging much at all.

    As nothing more than an experiment, I started upping my rates drastically. I’m now charging 4-8 times more per project than I did 18 months ago and I haven’t yet had a client balk for one second over price. The quality of my work is the same as before, my level of service is the same as before. Quite literally nothing changed other than that I got “ballsy” enough to quadruple my rates.

    I’m sure it won’t work like this for every situation, but it’s food for thought.

  2. says

    It should be clear, too, that maximizing your confidence levels often means doing something you aren’t entirely confident in–pushing yourself beyond your comfort level, finding out how capable you are, and finding out the world doesn’t end when you try something new. Even if you think you “fail.”

  3. says

    What I find challenging is the pull between wanting to have faithful and consistent repeat clients who are used to my rate, and the desire to go up a little bit. It’s easier to do when you are comfortable with your client load but could take on a new one.

  4. says

    Good article.

    I’ve recently been lowering my rates because of a drop in work and the desperation when my last 4 clients can’t pay up. I might be better off taking this time and using it for education.


  5. says

    Good post, Dave, and some stuff to think about. I’ve been thinking more and more over the last few months about the need to invest money back into my business, whether it’s marketing, organizational aids, or now – education. It makes absolute sense – I won’t be able to effectively raise rates and satisfy customers if I’m not worth it. Following up on education opportunities now, and the link you provided. Thanks!

  6. says

    Exactly what I’m going through, specially since I work in south america and there are lots of people here that underestimate the designer’s work; thanks a lot, this article will help me immensely

  7. says

    Beware of the “I’ll have more work for you” phrase. I’ve heard this many times where would be clients will promise lots of work to get a lower initial quote.

  8. says

    Very nice article. I strongly support those 3 points. I used to get paid for few money as a freelance programmer. I asked for more (maybe about double), and guess what? They agreed. You will be surprised to see how easy people agree to money that you haven’t imagine and you will feel stupid for not asking that much earlier.

  9. says

    The beauty of repeat-customers is that you can continue to provide them with lower, “valued-customer” pricing while adding the “missing” percentage to the new customers you’re picking up.

  10. says

    @carlnunes – Excellent point! I have had the same issue with giving a new client a break on pricing because they wooed me into thinking they would a) have a lot more work for me or b) refer me to their “huge” network of colleagues. This is often just not the case.

    Much better to tell the client to pay full price for the first job and if they want to sign a contract/retainer for several other projects you will consider a discount for services.

    I’ve fallen into this trap a few times and felt used. If people value your services than they can pay the full price.

    Same goes for trading services. The trades I have entered have almost always been lopsided (in the other person’s favor). Better for you to pay me for my services and then I’ll pay you for yours.

    Great article on an important topic!

  11. Saffron Scott says

    I actually have a client whose going through this right now — not in the website design/dev business though (so it is universal). He underbids everyone else in the country and produced a superior product. We’re all friends – my client, his CAO (aka his wife) and I – and he voiced this to me last time I had coffee out with them.

    This is what we came up with:
    1) Contact all the other companies doing what you do in the country and find out what the rate is. Either match it, or come just over … cos he /does/ offer a superior product.
    2) Mass mail all his current clients and tell them of the rate increase, BUT also tell them that as loyal clients he’s going to tier them up over the next 3 jobs or 12 months (which seems fair in his line of work, and ours) to the new rate. Loyal clients will appreciate that you’re still setting them apart, and appreciate the price cut to boot.
    3) Start charging everyone else at the new rate immediately.

    So far, every single one of his clients is actually thanking him for raising his rates by almost 100% (he was //really// underbidding), and at the moment the referrals are coming in so fast he’s having trouble hiring the contractors to keep up.

    So charging a fair rate, and treating your current clients like the insiders they are apparently works. :)

  12. says

    Nice quote from Brian Tracy: “In fact, if you just invested as much in your mind each year as you do in your car, that alone could make you wealthy.”

    But I have no car (what would I need it for!?), so I must be out of my mind.

  13. says

    Very nice article. I strongly support those 3 points. I used to get paid for few money as a freelance programmer. I asked for more (maybe about double), and guess what? They agreed. You will be surprised to see how easy people agree to money that you haven’t imagine and you will feel stupid for not asking that much earlier.

  14. says

    Hi Dave!
    I, myself can really relate to what have you written about having confidence when facing other people. I am not into that kind of business but I read a lot of blogs about anything as long as it is interesting, and I find your post interesting.
    I am still a student who also needs to increase the level of confidence for me to face other people which for me are bigger problems than not having food to eat., hehehe
    I will surely follow your advise of not to think of a negative result before starting to do something.

    Hoping for another posts of yours about building one’s self to become a better person not for yourself only but for the others also.!

    Thank you!

  15. says

    Awesome content.

    I’ve lately been decreasing my prices because of a fall in perform and the frustration when my last customers cannot pay up. I might be better off getting this time and using it for knowledge.


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