There are many sophisticated techniques you can use to increase your rates.
(And we talk about it at length in our DYFR course and on the blog)
…But today I want to talk about a ultra-simple (and safe) rate increase technique.
Additionally, you may be able to implement it right away has immediately solve your “I don’t have enough customers” problem.
But first, the complaint that drives him…
“I don’t have enough customers and I would like them to arrive on autopilot”
I hear this all the time from our audience: It’s probably the No. 1 thing people want.
…But they often aim for it prematurely.
In my opinion, before worrying about attracting leads on autopilotyou must first find a way to predictably provide leads on “manual pilot.”
The keyword being here “predictably”.
If you know you can spend
However, most freelancers with this superpower I don’t realize they have it, and they underutilize it.
(I’ve noticed this a lot while leading the DYF Accelerator community over the past few months. I recently coached community member Maia to uncover this “hidden superpower,” and it helped her double her rates in 2 month.)
What this superpower looks like in the real world
We have a community member, Brad, who is a new freelancer and has a pretty solid lead generation strategy that he uses on Upwork, among other places.
I learned on my last coaching call with Brad that he can, quite predictably, spend about 2.5 hours on Upwork to get a client worth about $200/month and takes him 4 hours/month to satisfy him.
When you factor in this lead generation time, the effective hourly rate isn’t incredible (2.5 + 4 = 6.5 hours/project, which means $200/6.5 = $30.70/ hour of 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, having to spend almost as much time on lead generation as on the project itself!”)
But I receive excited.
For what?
3 reasons:
- Predictability
- Outsourcing
- Leverage to increase rates
With this in mind, this leads me to…
The safest way to increase your rates
All the fancy DYFR techniques aside, the surest way to increase your rates is simple:
Offer and demand.
Definitions, as they apply to freelancers:
- Offer = The hours you have available during which you could carry out client projects
- Demand = Potential clients asking you to carry out their projects
In other words, if there is more work available than you can accomplish, you have excessive demand.
If there is not enough work available, you have oversupply.
Excess demand = good.
Oversupply = bad.
How does it work in practice…
- To have just enough tracks – Or not enough leads – to keep the desired amount of client work on your plate? (i.e. excess or perfectly balanced supply)
👎 Don’t increase your prices. - Do you have enough leads to have a queue of customers coming? (i.e. excess demand)
👍 Raise your prices.
Where Most Freelancers Go Wrong
Most Freelancers Get It Wrong do only enough lead generation work to get the following customer.
In doing so, they give up their power and remain in a state of fear, shortage and low rates.
To illustrate this, let’s go back to Brad’s example above.
Brad has a strategy he can use to predictably trade 2.5 hours to get a new client.
The problem?
He only uses this strategy when he desperately needs a client.
For Brad, the quickest and safest way to increase his rates is to spend 5 (or 10) hours a week not only implementing the current strategy that works. every weekregardless of how much work the client has on their plate.
(And be sure to always schedule time for this lead generation work, rather than setting aside 40 hours a week of client work)
If he continues to do this, he can create a queue of new customers and create more “supply and demand leverage.”
And then he can safely increase his prices.
When Brad and I were chatting the other day, he told me that before the call, he changed his rate on Upwork to $100/hour instead of $50/hour.
I told him to put it back to $50.
Here’s why…
The way I see it is this:
If he is 2 weeks behind on upcoming client projects, has a proven track record of implementing his $50/hr lead generation strategy, and knows his conversion rates for converting leads into customers, it can safely experience a higher rate.
Worst case scenario, conversion rates drop so much that it’s not worth the extra lead generation time and they decide to go back to $50/hour without any disruption to the client’s work.
But by increasing the rates to $100 right away?
Without customers in the queue?
Without concrete statistics and stress testing of the lead generation system?
Risk.
He’s likely to compromise on his rate out of desperation and end up without useful data on how the new rate affects conversion rates, or worse, end up with bad data this leads to incorrect assumptions about what people will/won’t pay.
Your next steps
Do you have a predictable way of attracting customers?
If yes…
Quantify it. Say again. Sharpen it.
Determine exactly how many hours (and how much money) you spend to find a client and compare that to the value of a typical project to determine your effective hourly rate.
Armed with this data, double down on your lead generation efforts – consistently, not just when you need more work – to create “excess demand” and use that leverage to increase your rates.
From there, you can optimize your system, delegate work, and leverage other levers regarding your process and service offering to further increase your rates.
(I talk more about this in DYFR’s new and improved “Determining Your Rate” module)
Otherwise…
Find a predictable way to attract customers.
The options here aren’t “sexy” and they’re things you’ve heard a million times.
Some of them that come to mind are…
- Upwork / other markets
- In-Person Networking Events
- Cold sensitization
- 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 used them successfully in their businesses — email us at hello@doubleyourfreelancing.com if you would like to continue. the waiting list for this and we will keep you updated.
Parting thoughts
Most of us vomit a little at the thought of having to dedicate time to something like cold outreach every week.
My advice?
Do not view this step as “One step forever.”
Instead, think of it as a “just for now” stage.
It’s like a launching pad…
You first master a hamster wheel lead generation strategy, and you get predictability.
You then exploit this predictability increase prices, delegate, etc. higher net salary.
And from there, you can move on to more “Blueprint-y” marketing strategies that Really propels you into the stratosphere.
Where most independents are wrong tries to go from the ground to the stratosphere without first having this launch pad in place.
If you think you have the basics of a good strategy but need help or accountability to perfect it, join the DYF Accelerator community and I’ll help you perfect it in one-on-one coaching sessions like I did for Brad and Maïa. 😊
