How to Raise Your Hourly Rates

If you work as an independent professional or employee whereby you get paid by the hour, then your income depends heavily on your hourly rate. So obviously if you can raise your hourly rate, you can earn more money without working longer hours.

But when does it make sense to raise your hourly rate? How do you know if you’re charging a fair price for the service you provide?

When Not to Raise Your Rates

If you’re going to raise your rates, there should be solid business reasons for doing so. In the absence of such reasons, it makes no sense to raise your rates.
Because you feel like it is not a solid business reason.

Nor is the desire to earn more money. That’s a nice intention, but it’s not a justification for charging your clients more for the same service.

When to Raise Your Rates
Here are some cases where raising your rates may be a wise choice:

1. You’ve improved your service and/or skills  If you’re able to provide more value to your clients in less time, then raising your rates to reflect your increased quality and efficiency is reasonable.
2. The supply-and-demand curve for your service has changed  If you’re missing opportunities, becoming overbooked, or having to turn away clients because the demand for your service exceeds the supply, then it makes sense to raise your rates to bring supply and demand into better balance.
3. You want to work shorter hours  If you want to reduce the number of hours you work with clients, you can raise your rates to reflect the scarcer supply.
4. You’re testing to gain more information  Testing a higher rate is a perfectly valid business reason. However, before you test new rates, be sure to have a fallback plan in case the new rates meet with too much resistance.

5. You want to reposition yourself  Positioning or branding are also valid business reasons for raising your rates. However, you’d better have the necessary skills and experience to back up your new positioning. If you want to be a high-priced consultant, be sure that you can consistently deliver high quality results. Otherwise if you charge premium prices for less-than-premium service, you’re essentially scamming people.

These are some of the most common business reasons for raising your rates, but there are others, many of which are field-specific.

Common Mistakes to Avoid
Here are some common mistakes people make when raising their rates:

1. Not raising rates at all, i.e. undercharging, is a common business mistake. This means leaving lots of money on the table and being paid signficantly less than you’re worth, especially as your skill increases. It’s a suboptimal way to run a business or build a career.
2. Not testing is another huge mistake. If you never test higher rates, you’ll never know how much potential income you may be leaving on the table. A good approach is to test higher rates with new clients first, but keep your existing clients at the old rates for a while. This way you don’t have to risk losing your old clients if a rate increase proves ineffective and you decide to return to the old rates.
3. Raising rates beyond what the supply-and-demand curve will bear is a common novice mistake. Some people want so much to be on the same level as the experts in their fields, but they haven’t yet acquired the skills to justify such high prices. It’s best to keep your rates reasonable (even low) until you’ve built up a decent client base. When you reach the point of having to turn away business because you’re getting overbooked, then it’s time to raise your rates. But if you overcharge right out the gate, many potential clients will know you aren’t worth as much as a seasoned expert, and they’ll avoid patronizing your business.
4. Changing rates too often is a less common mistake but still one to be avoided. If you’re changing your rates every season, you’re going to confuse your existing clients. Frequently changing your prices will make it hard for your clients to see how your services might fit into their budgets.

Don’t be surprised if you initially see a decrease in business whenever you raise your rates. If the rates are reasonable, business should pick up again within a few weeks.

How to Raise Your Rates
Here's some advice to help you get your hourly rate trending upward:

1. Invest in improving your service. Keep adding value; don’t get complacent. The more you improve your service and skills, the more you can charge. Note that more knowledge doesn’t always translate to better service. If you want to increase your rates, then focus on building skills with market demand. Don’t waste years learning how to do things that no one needs done (or that can be done at a lower hourly rate than what you’re already charging).

2. Over-deliver  Provide such outstanding service that your clients feel compelled to talk about the great experiences they had. This will help your client base grow via word of mouth. Let a high quality of service be the central core of your marketing efforts. Violate your clients’ expectations in the best way possible.
3. Keep non-core work from becoming a distraction  Take the time to establish and maintain good systems for invoicing clients, educating new clients, handling tax filings, etc. Put this type of detailed work on autopilot so it doesn’t become a distraction.
4. Collect testimonials  When you do good work for a client, ask for a testimonial. Most satisfied clients will be happy to provide them. Then you can share the testimonials on your website or other marketing materials.
5. Ask for referrals  Ask your clients for referrals to others they feel might benefit from your services. Some businesses even go so far as to “fire” clients who never provide any referrals because such clients are dead ends. If it seems reasonable to do so, formalize your referral program and offer referral incentives, such as by providing an affiliate program your clients can join.

6. Leverage your strengths  If you do work that you’re especially good at, you’ll be able to raise your rates faster. Switch fields if necessary, but make sure you’re working in the sweet spot of your core talents and skills.
7. Care about your clients  Treat your clients as real human beings, and they’ll be more likely to want to continue doing business with you — and to refer their friends, families, and co-workers to you. A business is built on relationships. If you treat your clients coldly, don’t be surprised when they respond coldly to your requests for referrals.
8. Keep in touch Don’t be a stranger  Check in on your clients now and then. Let them know about meaningful improvements to your service. Don’t spam them with fluff, but do maintain the relationship you’ve built.

9. Reactivate dormant clients  A client may go inactive for a variety of reasons, and many of those reasons have nothing to do with you. There’s a good chance that such clients can be reactivated, even after a year or more of inactivity. Maybe they had a bad year. Maybe there were some personal issues they had to attend to. Maybe there was a misunderstanding that can be remedied.
   If you’re open to doing more business with this client, reach out and reconnect. The worst case is that they won’t do business with you again (which is no worse than the status quo), but the best case is that you reactivate a good client who continues doing business with you for years to come, and they may generate fresh referrals for you as well.
10. Embrace change  The world is awash in change, and change represents opportunity. Don’t be a dinosaur. When you see industry-impacting changes occurring, jump to the front of the line, and look for ways to leverage those changes to provide new and better services. For example, what new technologies are becoming available that are causing surges in demand for software developers and consultants?

Be Patient

The best rates for your service will ultimately be determined by the marketplace. Sometimes you’ll be delighted by the results. Other times you won’t like the market’s verdict, especially when it tells you there are few people willing to pay you what you’d like to earn. Realize that this is only a reflection on the social value you’re currently producing; it doesn’t speak to your intrinsic value as a human being. Accept the market’s feedback for what it is, and use it to make better decisions as you move forward. Don’t try to argue with the market — you will lose!

The nice thing about setting your own rates is that the sky is the limit. You may not be able to control market forces, but you can control how you angle your virtual surfboard and ride those forces. Will you let them toss you to the sidelines, or will you ride them to the top?

Are you a service provider?  Want to know a little bit more about the benefits of oursourced marketing? Download the PHANTOM POWER Whitepaper and apply some of these tips to your own business.

PHANTOM POWER
Marketing by Design
www.phantompower.co  

Marketers Rank B:B Challenges

What are the greatest challenges that B2B marketers are facing? From generating high-quality leads and a high volume of leads to generating public relations buzz, see which challenges topped the list.

Today's Most Significant Challenges for
B2B Marketers to Overcome

The call from the sales force is not "Give us more leads" – it’s "Give us better leads." As you can see in the chart, marketing teams are aware of this issue and are responding to the challenge. 

Depending on your lead generation process, lead quality may be the result of either the original state of the lead or of a nurturing process to determine if and when the lead is sales-ready. The latter case – a nurturing process – also addresses the second most significant challenge shown in the chart above: marketing to a lengthening sales cycle. 

A strategic nurturing process not only identifies when a lead is sales-ready, but can pinpoint at which stage of the buying cycle the prospect is in, to forecast timely opportunities.

When the quality of a lead is dependent on its original state, it usually means that all but the most obviously disqualified leads are handed off to the sales force as they are generated. Surprisingly, this practice is still very common in B2B marketing.

PHANTOM POWER
Marketing by Design
www.phantompower.co  

The Long Road From Lead Generation to Sales Conversion

Marketers face lengthy time spans as they progress from lead generation to conversion, making it difficult to nurture prospects while moving them through the pipeline. This chart highlights the percentages of leads in each stage of the pipeline that are likely to advance to the next stage.

Average Conversion Rates in the Marketing-to-Sales Process

One of the most challenging obstacles to marketing is the time span from lead generation to sales conversion.

These long sales cycles put pressure on marketers to streamline the lead nurturing process.

When prospects first enter the pipeline, they may be months away from defining specifications, a budget or purchase timeline. 

It is marketing’s responsibility to identify and fulfill the information needs of prospects at each stage and to advance prospects through the pipeline to a sales-ready stage as rapidly as possible.

We wanted to know what percentages of leads in each stage of the pipeline are likely to advance to the next stage. As this chart shows, on average, nearly four in 10 leads move from initial inquiry to being sales-ready, and approximately the same ratio advance from sales-ready to qualified prospect. As might be expected, the trend deteriorates moving to the next stage where only three in 10 qualified prospects convert to a sale.

The internal sales force has an edge – albeit slim – over top channel partners in percent of distributed leads closed. An organization’s own sales force is also three times as likely to close leads distributed to them as are their average channel partners.

The Deal. The Close. The Win.

Ultimately, making the sale is up to your sales team, but by implementing a sound nurturing and scoring process, you have helped them by establishing a relationship and positioning your company as a leader with the prospect. The Tools Just as a nice haircut and a manicure prepare you for that first date, every marketer should prepare for that introduction. You’ll need easy to use tools to help you nurture leads, including email, landing pages, forms, and lead scoring: essentially, a lead management solution.

Send triggered emails

Send a series of emails as part of a drip marketing campaign, or triggered based on specific prospect activities. Each email offers a document (or webinar, or trial software, etc.) that helps move your target along in their decision-making process.

Use custom landing pages

Don’t forget that custom landing pages can increase conversion rates by up to 48% during your lead nurturing as well as your lead generation activities. You only have eight seconds to get their attention, so use bullets, short forms, and no external navigation. And have only one call to action!

Use smart forms

You will get better response rates by using a form as the call to action on your landing pages, but why use the same form with the same fields over and over? Just like you wouldn’t ask your date for his or her name every time you see them, you shouldn’t ask for contact information again and again. Smart forms recognize known visitors and can fill in the fields you already know. Since you don’t have to ask for this, ask for other info, such as company size, time until decision, etc. Building the profile over time will help you in scoring the lead.

Use web analysis and lead scoring

Knowing which pages your prospects visit on your site can be very beneficial to determining their interest as well as their level of engagement. Being able to connect anonymous visits to actual prospects? Priceless.

Automate and measure

Salesforce.com and other customer relationship management (CRM) products are great, but they typically fall flat in their marketing capabilities. As marketers we need to automate the everyday tasks of building and managing lead generation and lead nurturing campaigns. We also need to more objectively score leads according to their company demographics as well as their activities on our websites, landing pages, emails and other campaigns. And a single lead source doesn’t cut it when lead nurturing. It’s great to know where we first encountered the prospect, but knowing what happens between that first meeting and closing the sale is imperative in these days of marketing accountability.

Evaluate

As you move through the nurturing process, you’ll probably discover that some of the assumptions you made are incorrect; for instance, that downloading a particular white paper means that they are close to buying or that sending a particular email would elicit a good response. Don't forget that lead nurturing – and marketing in general – is constantly changing. You'll want to stay flexible and be ready to change your lead nurturing process as you experiment with new tactics and learn what works.

What are you doing to lessen the cycle from lead generation to conversion?


PHANTOM POWER
Marketing by Design
www.phantompower.co  

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