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How to Raise Your Firm's Fees

Four tips that take a measured approach without alienating clients.

Any time a company increases its fees, there may be some shakeup in the client base. Taking a measured approach and giving compelling reasons for raising prices will minimize this potential. Here are some strategies to help you stay in clients' good graces while charging more for your services.

Increase Rates Slowly and Steadily

Many companies are so worried that clients will leave if they increase their rates that they put it off for years. Rather than wait 10 years and then raise rates by 20 percent, slowly raise rates 2 percent each year. The benefits are twofold: Clients will be better able to absorb the increase in their own budgets, and your business will be able to raise prices as inflation increases. Making rate increases a part of your standard business practice removes the emotion from the decision to raise rates.

Tell Customers Why

If you are raising rates to enable your firm to provide better services, be upfront with clients. Explain that you are hiring only professionals with advanced accounting certifications to serve them better, or that your firm is increasing the amount of time it spends on research and analysis. Make it clear to your clients that your fee increase is reflective of the value of your services. By paying more, they are getting more.

However, if you are raising your rates because your rent is increasing or your software provider has raised its fees, it's important to share that information with your clients too. They are likely to respond not just to the price level but also to how reasonable they feel it is. If your fee increase is tied to higher costs to run your firm at the same quality level of service, clients are more likely to accept a higher bill.

Change the Time Frame

If you currently charge an hourly rate, consider providing clients with a retainer option. The clients win because they can better budget for your services, and you win by being able to charge more for your services without the client questioning your actual hourly rate.

Test Rates on New Clients

Companies hesitant to raise rates on existing customers can try out new rates on new clients. If you find that new clients are wiling to pay the higher amount, it's likely that your current clients will accept that rate increase as well.

Most clients equate value with price: The more they pay for something, the better they believe it is. Clients tend to be more understanding if they know that the rate increase will directly impact the value your company provides.

 


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