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This guest post was written by Preston Lee, founder of Millo. To learn more about Millo, visit their website.
Determining when to raise prices for your web design business can be a truly difficult task for a number of reasons.
First, there’s fear (completely justified fear, too!). Finding clients is hard enough in the first place. The last thing you want to do is scare them away by changing your web design pricing.
Then there’s the sheer logistics of it. Figuring out how to raise prices without causing confusion or client conflict is crucial.
That said, rarely do designers who have raised their prices go on to regret it.
Instead, most web designers will say things like, “I wish I would have raised my prices sooner!”
In today’s article, the goals are to:
- Give you confidence on when to raise prices
- Offer actionable advice on how to raise prices
Let’s start with the “when.”
When to Raise Prices as a Web Designer (or Agency)
Over the years, web design pricing has been a tricky issue, primarily because the task of designing a website (and knowing what to charge for it) has changed so much over the years.
When I designed my first website over 15 years ago, I didn’t worry much about page speed or user accessibility. Add to that the constant barrage of new devices, languages, robust and secure web hosting, and UX guidelines and it’s easy to get overwhelmed knowing how to set web development pricing that will keep you in business.
Luckily, knowing when to raise prices isn’t nearly as difficult as keeping up with web design processes. Web design pricing can be far more simple.
Below, I’ve included a list of common signs it’s time to raise your rates as a web designer or web design agency.
Four Signs it’s Time to Raise Your Web Design Rates
1. New clients don’t bat an eye when you send them your bid
The truth is, you want to make it easy for your clients to say “yes” to a bid. But if you never get even a little bit of hesitation or pushback from your clients, then your web development cost is set too low.
My recommendation: Raise prices with each new client until you begin to see some pushback. Then, settle into a price where both parties feel like they’ve won.
2. Your profit margins are too low
Of course, there are more ways to improve your profit margin than to just raise prices, but if you frequently find yourself with too little left over at the end of a project, your web design pricing is probably set too low.
My recommendation: Raise prices while adding value—but not cost—to each project (more on that in the “how” section of this article).
3. You’ve had the same pricing for years
If you’ve had the same web designer hourly rate or web development pricing for more than a year, it’s time to take a hard look at why. Even with just a standard rate of inflation cost, you’re doing yourself a disservice by not raising your prices.
My recommendation: Raise prices every year, at a minimum. Grandfather in old clients if you need to, but never sign on new clients at the same rate as you did over a year ago.
4. You want more money
Some say money is the root of all evil. The truth is: I like money. I like having money in the bank. I like building a business that generates money for me while I do work that I love and spend more time with my family.
There’s nothing wrong with wanting more money, as long as you stay rooted in what’s actually important. If you find yourself wanting a bit more cushion each month, it may be time to raise your rates.
My recommendation: Let your desire to build financial stability push you past the fear of raising your prices. And always stay rooted in what matters far more than money: family, loved ones, passion, meaning, legacy, etc.
You Don’t Have to Wait for a Sign to Raise Prices
While all the reasons I listed above will help you know when to raise prices, the truth is: you don’t need an excuse to raise prices.
If you feel like it’s time, don’t wait for a sign. Just raise your prices. It’s much easier than you think.
Below, I’ll share a few tips on how to raise prices once you’ve decided the timing is right.
How to Raise Prices as a Web Designer (or Agency)
Once you’re convinced it’s time to raise your web design pricing, there are a few tricks you can use to make the process less painful or awkward.
For starters, it’s important to recognize there will be two critical tasks you face:
- Learning how to raise prices for new clients (easy)
- Figuring out how to raise prices for existing clients (more challenging)
How to Raise Prices for New Clients (Easy)
There’s really not much to learn when asking how to raise prices for new clients. The truth is, it’s pretty simple.
All you have to do is update your web development pricing anywhere you’ve got it listed online. Here are the two biggest suggestions:
Raise prices in your online portfolio
If you’ve got a portfolio website that showcases your work and your pricing, be sure to update any web development cost details there. That could include on your rate sheet (if you have a separate one) or just on a pricing page.
Raise prices on any relevant marketplaces
If you’re a freelancer or agency who gets a lot of new business from sites like Upwork, you’ll want to update your rates there as well. Take note of which services raise your rates for pre-existing clients and make sure you don’t inadvertently raise prices for someone you meant to grandfather in to previous web design pricing.
How to Raise Prices for Current and Former Clients (More Challenging)
As I mentioned previously, knowing how to raise prices for new clients is easy. They have no historical context to know if your rates are higher than they used to be.
But knowing how to raise prices with existing clients can be a bit more complicated. Depending on the client, they’ll understand the needed uptick in web development cost, while others may push back or get offended. And some might even leave.
Remember: If a client leaves because you’ve raised your web development pricing, that just opens the door for a new client who is ready and willing to pay your new (higher) rate.
You may also choose to grandfather in some old clients at your old rates (although, I would recommend limiting this). For that you’ll want to use some sort of CRM/invoice software to keep track of how much you’re charging each client.
Here are a few tips on how to raise prices with existing clients:
Pick the right medium based on your relationship
For some clients, raising your web design pricing will be as simple as sending a quick price increase letter via email.
If your relationship is good enough and you’ve delivered enough value in the past, they’ll be happy to pay your higher rates.
For others, you may need to be more tactful. Maybe taking them to lunch and using a few tips below.
Focus on gratitude
For some clients, hearing that you’re raising your prices may come as a shock. Catching them off-guard like that may tempt them to think you’re being selfish, greedy, or unreasonable.
You can head off these concerns by focusing on gratitude for your relationship with them and the previous work they’ve sent you.
Help them know how much you value your partnership and remind them of all the good things you’ve accomplished together in the past.
Emphasize past and future value
Many clients will immediately jump to this question in their mind:
“If your web development cost is going up, what more will I get out of our arrangement?”
Unfortunately, this is human nature. Nearly all of us—even when we try not to—internally ask ourselves, “What’s in it for me?”
That’s why you should emphasize the past and future value you bring to your client.
For the past, try phrases like:
- “We’ve hit some really audacious goals together!”
- “Remember how much of a headache it was to update your website when we first got started?”
- “Things have been running so smoothly and I’ve loved being a part of your growing business!”
For the future, be sure to include any upcoming services you might be adding or any additional value you know you can provide as you move forward together.
The truth is, most clients are willing to pay higher prices. They just need to be reassured that it will be worth the extra investment in web development costs.
Setting the right expectations for the future can serve to both reassure them and get them really excited about what lies ahead.
PRO TIP: You may be tempted to bring up additional costs you’re faced with as a way to justify higher web design pricing.
Don’t give in to that temptation.
Even your closest, best clients can’t justify paying you more simply because your rent has gone up, you’ve hired more sub-contractors, or you had to buy a new computer.
Stay focused on the value you bring to them and you’ll never need to discuss the internal reasons for raising your prices.
Stop Wishing—Start Acting
If you’re still nervous about when to raise your rates or how to raise your rates, here’s what I suggest:
Maybe try it with just one of your clients at first. If you’re really terrified, start with a client you wouldn’t mind losing (everyone’s got one).
Once you get a little momentum, I think you’ll be surprised just how easy (and exciting) it is to raise prices as a web designer.
As always, good luck!