Rate increase plan
Use this skill when rates have not moved in a year or more and the firm is carrying clients at numbers it would never quote today. Produces who moves and who does not, what each one goes to, who gets grandfathered and why, the order to tell them in, and the message for each. Also use for "we need to raise rates", "put our prices up", "this client is underpriced", "how do I tell them the retainer is going up".
Bailey DarlingCo-Founder, GiaApplies to a book of existing clients priced below what the firm charges new ones. Produces the plan and the conversations, not a new rate card.
The play
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List every client with what they pay, what the same work would be quoted at today, and how long they have been at the current number. The gap column is the whole exercise, and most firms have never put it in one place.
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Sort by gap, not by size. The client paying furthest below current rates is the priority regardless of how much revenue they represent, because the size of the gap is what determines how awkward the conversation gets the longer it waits.
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Decide who does not move, deliberately, and write the reason next to each. Grandfathering is a legitimate choice. Grandfathering by default because the conversation is uncomfortable is how a firm ends up with half its revenue at two-year-old prices. Reasons that hold: they were a design partner, they took a risk early, they refer consistently, they are a reference you need. Reasons that do not: they are nice, they might leave.
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Set the new number per client rather than applying one percentage across the book. A flat increase under-corrects the worst gaps and over-corrects the ones already close to current rates.
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Decide the order you tell them in. Start with the client most likely to say yes, not the one with the biggest gap. The first conversation teaches you where the resistance actually is, and you want to learn that on an easy one.
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Write the message per client. Lead with the new number and the date it starts. Do not open with an explanation, do not apologise, and do not offer a justification nobody asked for, which invites a negotiation about whether the reasoning is sound rather than about the price.
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Decide the fallback before each conversation, not during it. A longer notice period, a phased step over two quarters, or a reduced scope at the old number. Going in without one means improvising a discount under pressure.
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Set a review date so this does not become a once-every-three-years event. The size of the conversation is a function of how long it was avoided.
What good looks like
- First thing I check that most people skip: what the firm would quote this exact client today, as a new deal. Not a percentage uplift, the real current number. The gap between that and what they pay is usually larger than anyone expects and it is the only honest basis for the conversation.
- The mediocre version: a flat percentage emailed to the whole book on the same day. It treats a client who is 40% under the same as one who is 5% under, and it guarantees the worst-priced clients stay the worst-priced.
- I know it is right when every client staying at the old rate has a written reason that is not "awkward".
- Second test: I know my fallback for each conversation before I open it.
- Red flag: the plan has been written and not sent for three weeks. The plan was never the hard part.
Rules
- MUST put current price, today's quote and the gap in one place for every client.
- MUST set the new number per client rather than one percentage across the book.
- MUST write a reason beside every client who is not moving.
- MUST lead the message with the number and the start date.
- MUST decide the fallback before the conversation.
- MUST set a review date.
- NEVER grandfather a client because the conversation is uncomfortable.
- NEVER open with a justification.
- NEVER improvise a concession during the call.