> About four years ago a friend of mine, who specializes in personal brand consultation, suggested whatever my hourly was that I double it. I didn't believe her. I doubled it and landed the first proposal.
Doubling your rate is really only an option when you’re already charging too little or if you’re dealing with clients who have no idea what market rate actually is.
I encourage everyone to explore incrementally higher rates until they are losing deals over pricing. That’s the only way to really know the ceiling.
The other important thing to keep in mind is that higher rates bring higher expectations. I’ve had contractors who charges in the $100/hr range and delivered okay-but-not-great work with mediocre communication. We kept them on because they could deliver eventually and we felt like we got what we paid for. If they doubled their rates to $200 the first thing I’d do is wind down the contract and switch to any number of more diligent and qualified contractors I know who charge in that range.
As soon as you violate the client’s sense of “you get what you pay for”, the relationship is in trouble. If someone doubles their rates, they need to be prepared to deliver work and communication deserving of that rate. There are a number of contractors in my area who have reputations of charging expensive rates but delivering budget quality work. They’re mostly limited to new clients at smaller companies who don’t have enough of a network to check their reputation.
However, if you can increase rates and deliver quality work that matches the price, you could work yourself into a premium market segment. And that’s a good place to be!
You just highlighted why doubling the rates might work for many people. If you charge $100/hr, the client may simply assume you can't handle the higher level/harder work. If you potentially can.. then doubling the rate will make the client feel comfortable giving it to you.
The same pattern happens in salaried work, A manager needs to show that the expensive new senior hire was worth the money. So they give the new hire all the good projects and leave the (cheaper) current employees high and dry. Further, management is incentivized to show the new hire's work in a positive light during performance review as they would be admitting that the manager made a mistake otherwise.
Understanding this dynamic will make you happier at work. Sometimes you need to leave so that you can be the great new hire, sometimes you need to demand more money/promotion so that management sees your worth. People inherently assume that you are worth something approximating your salary.
Doubling your rate is really only an option when you’re already charging too little or if you’re dealing with clients who have no idea what market rate actually is.
I encourage everyone to explore incrementally higher rates until they are losing deals over pricing. That’s the only way to really know the ceiling.
The other important thing to keep in mind is that higher rates bring higher expectations. I’ve had contractors who charges in the $100/hr range and delivered okay-but-not-great work with mediocre communication. We kept them on because they could deliver eventually and we felt like we got what we paid for. If they doubled their rates to $200 the first thing I’d do is wind down the contract and switch to any number of more diligent and qualified contractors I know who charge in that range.
As soon as you violate the client’s sense of “you get what you pay for”, the relationship is in trouble. If someone doubles their rates, they need to be prepared to deliver work and communication deserving of that rate. There are a number of contractors in my area who have reputations of charging expensive rates but delivering budget quality work. They’re mostly limited to new clients at smaller companies who don’t have enough of a network to check their reputation.
However, if you can increase rates and deliver quality work that matches the price, you could work yourself into a premium market segment. And that’s a good place to be!