There are a lot of fancy techniques you can use to raise your rates.
(And we talk about them at length in our DYFR course and on the blog)
…But today I want to talk about a super-simple (and safe) rate-raising technique.
Furthermore, you might be able to put it into action right away to immediately fix your “I don’t have enough clients” problem.
But first, the complaint that drives it…
“I don’t have enough clients, and I wish they came in on autopilot”
I hear this all the time from our audience — it’s probably the #1 thing people want.
…But they often aim for it prematurely.
In my opinion, before you worry about bringing in leads on autopilot, you need to first figure out a way to predictably bring in leads on “manual-pilot.”
The keyword here being “predictably.”
If you know you can go out and spend X hours or $Y to get a client, you have a “freelancing superpower,” in my opinion.
However, most freelancers with this superpower don’t realize they have it, and they underutilize it.
(I’ve noticed this a lot from running the DYF Accelerator community these past couple months. I recently coached community member Maia to uncover this “hidden superpower,” and it enabled her to double her rates within 2 months.)
What this superpower looks like in the real world
We’ve got one community member, Brad, who’s a new freelancer and has a pretty solid lead generation strategy he uses on Upwork, of all places.
I learned through my last coaching call with Brad that he can fairly predictably spend about 2.5 hours on Upwork to get a client that’s worth about $200/mo and takes him 4 hrs/mo to fulfill.
When you factor in that lead gen time, the effective hourly rate isn’t incredible (2.5 + 4 = 6.5 hrs/project, which means $200/6.5 = $30.70/hr effective hourly rate for the first month of having a client.)
Most freelancers would see something like this and feel discouraged (”what a terrible situation, to have to spend nearly as much time on lead gen as on the project itself!”)
But I get excited.
- Rate-raising leverage
With this in mind, it brings me to…
The safest way to raise your rates
All fancy DYFR techniques aside, the safest way to raise your rates is simple:
Supply & demand.
Definitions, as they apply to freelancers:
- Supply = The hours you have available where you could be fulfilling client projects
- Demand = Potential clients asking you to fulfill their projects
In other words, if there’s more work available than you can fulfill, you have excess demand.
If there’s not enough work available, you have excess supply.
Excess demand = good.
Excess supply = bad.
How it works in practice…
- Have just enough leads – or not enough leads – to keep your desired amount of client work on your plate? (a.k.a. excess or perfectly-balanced supply)
👎 Don’t raise your rates.
- Have enough leads that you have a queue of upcoming clients? (a.k.a. excess demand)
👍 DO raise your rates.
Where most freelancers go wrong
Most freelancers go wrong by only doing enough lead gen work to get the next client.
In doing so, they give away their power and keep themselves in state of fear, scarcity, & low rates.
To illustrate this, let’s come back to the Brad example above.
Brad has a strategy he can use to predictably trade 2.5 hours to get a new client.
He only employs this strategy when he desperately needs a client.
For Brad, the quickest & safest way I see to raise his rates is to spend 5 (or 10) hours a week doing the current strategy that’s working, but doing it every single week, regardless of how much client work is on his plate.
(And to be sure to always create the time in his schedule for this lead gen work, rather than booking 40 hours a week of client work)
If he keeps doing this, he can build a queue of upcoming clients, and build more “supply and demand leverage.”
And then he can safely raise his rates.
When Brad and I were chatting the other day, he told me that prior to the call, he had changed his rate on Upwork to $100/hr instead of $50/hr.
I told him to set it back to $50.
The way I see it is this:
If he had a 2-week back-log of upcoming client projects, and he a track record doing his lead generation strategy at $50/hr, and knows his conversion rates for converting leads to clients, he can safely experiment with a higher rate.
Because worst case scenario, the conversion rates plummet so much that it’s not worth the extra lead gen time and he decides to go back to $50/hr without any client work disruption.
But upping the rates to $100 right now?
Without clients in the queue?
Without hard stats and stress-testing of the lead generation system?
He’s liable to compromise on his rate due to desperation and wind up with no helpful data of how the new rate affects conversion rates, or worse, wind up with bad data that leads to incorrect assumptions about what people will/won’t pay.
Your Next Steps
Do you have a predictable “hamster wheel-y” way of getting clients?
Quantify it. Repeat it. Hone it.
Determine exactly how many hours (and how much money) you spend to get a client, and weigh that against the value of a typical project to determine your effective hourly rate.
Armed with that data, double down on your lead gen efforts – consistently, not just when you need more work – to create a “demand surplus,” and use that leverage to raise your rates.
From there, you can optimize your system, delegate work, and pull other levers about your process & service offering to further raise your rates.
(I talk more about this in the new-and-improved “Determining Your Rate” module of DYFR)
Find a predictable “hamster wheel-y” way of getting clients.
The options here aren’t “sexy,” and they’re things you’ve heard a million times.
Some of them off the top of my head are…
- Upwork / other marketplaces
- In-person networking events
- Cold outreach
- LinkedIn / other social media
- Cold calling
- Parallel agency partnerships
- Parallel SaaS partnerships
I’m currently putting together a “How to find clients” course with lessons on the above strategies taught by different savvy freelancers who have successfully used them in their businesses — shoot us an email at email@example.com if you want to get on the waitlist for that and we’ll keep you in the loop.
Most of us puke a little at the idea of having to spend time on something like cold outreach every week.
Don’t look at this step as a “forever step.”
Instead, look at it as a “just for now” step.
It’s like a launchpad…
You master a hamster-wheel lead gen strategy first, and you get predictability.
You then leverage that predictability to raise rates, delegate, etc. for higher take-home pay.
And from there, you can move on to the more “Blueprint-y” marketing strategies that will really shoot you into the stratosphere.
Where most freelancers go wrong is trying to get from the ground to the stratosphere without having that launchpad in place first.
If you think you’ve got the bones of a good strategy but need some help or accountability getting it honed, join the DYF Accelerator community and I’ll help you hone it in one-on-one coaching sessions like I did for Brad and Maia. 😊