One of the keys to signing up a customer is to get a signed contract.  When we start out the goal is often to get a long-term deal and lock that customer in.  This approach is great for stability.  However, it can make it hard to get an increased bill rate later.  Here are a few actions that can help open that door to conversation.

Increased Bill Rate For A New Project

A new project is one of the best ways to talk about a better rate.  The work you bill for is almost always going to change in some way from project to project.  A new project may require a different role or focus.  This should be part of the emphasis in rate discussions.  However, do not forget to play on past success as well.  When you have proven yourself to a customer that should lead to greater responsibility and value.  Thus, an increased bill rate makes all kind of sense.

New Skills and a New Rate

Any good consultant (or developer) will improve their abilities as time passes.  These improvements can come from on-the-job training learning more about a vertical, increased business knowledge, or new technical skills.  These topics all are more than just padding on a resume.  You bring all of this experience and know-how to the table.  Thus, the more you bring, the more value you provide customers.  Once again, this is an excellent way to build a case for a better rate.

Increased Costs and Reduced Discounts

I personally dislike this approach.  However, it is valid and sometimes the easiest way to improve your rate.  Prices and business costs go up over time.  That is just a fact of business.  There are also discounts you might provide early on for a customer that expire.  Thus, time alone should push up the costs expected for a vendor.  Salaried employees need cost-of-living raises to keep up with the market.  The additional funds for this do not magically appear.  They come from increased prices and billing rates.  When you have a customer that has been allowed a steady rate for a long time, it may be easiest to point to that alone as a reason to improve your rate.

Market Forces and Priorities

This option is slightly better than the one above.  However, it rests on very similar facts.  Time and market forces may push rates up.  Maybe your skills have become more valuable and in demand.  On the other hand, you might have a customer that is now the lowest paying of active clients.  This is the point where you just go with reality.  A client that is paying a lower bill rate is often pushed to the end of any queue.  It only makes sense to focus on billing hours at the highest rates.  In this case, an established customer may be costing you money.  When employee pay is based on the latest rates, the margin per hour can become an issue.  Even a profitable customer can drift into the loss category when their rate is stable in a climbing market.  Use this as a way to suggest that they will be able to utilize your company more if they pay a higher rate.  YOu might even have to suggest that they find another vendor in the worst of these cases.

The Proof is in the Pudding

All of these options are just a start.  They are also not mutually exclusive.  You may see that pieces of each of these suggestions would work in your case.  Feel free to mix and match across them all or even provide entirely different reasons to increase your rate.  Ultimately, it all comes down to the relationship you have with your customers and your track record with them.  When you steadily Under-promise and Over-deliver you will find these discussions much easier.  However, if you provide poor results, do not expect the customer to respond very well (if at all) to requests for a rate increase.

 

 

Rob Broadhead

Rob is a founder of, and frequent contributor to, Develpreneur. This includes the Building Better Developers podcast. He is also a lifetime learner as a developer, designer, and manager of software solutions. Rob is the founder of RB Consulting and has managed to author a book about his family experiences and a few about becoming a better developer. In his free time, he stays busy raising five children (although they have grown into adults). When he has a chance to breathe, he is on the ice playing hockey to relax or working on his ballroom dance skills.

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