{"id":21024,"date":"2022-12-14T17:02:22","date_gmt":"2022-12-14T11:32:22","guid":{"rendered":"https:\/\/www.karooya.com\/blog\/?p=21024"},"modified":"2022-12-14T17:02:23","modified_gmt":"2022-12-14T11:32:23","slug":"ppcchat-raising-your-rates-how-when-why","status":"publish","type":"post","link":"https:\/\/www.karooya.com\/blog\/ppcchat-raising-your-rates-how-when-why\/","title":{"rendered":"PPCChat | Raising Your Rates – How, When & Why | 13th December 2022"},"content":{"rendered":"\n

Welcome Readers! This week’s PPCChat session was focused on experts rising their rates in 2023 and how would they go about it. Here is a screencap of the entire chat which was hosted by Julie F Bacchini<\/a>. <\/p>\n\n\n\n\n\n\n\n

<\/div>\n\n\n\n

Q1: Have you ever raised your rates? If so, why? And if not, why not?<\/strong><\/h4>\n\n\n\n
<\/div>\n\n\n\n

Rate setting is above my pay grade but I know we have raised them over time just to keep up with market conditions. @beyondthepaid<\/a><\/p>\n\n\n\n

Yes, have had to. The prices for everything around us has been increasing (really fast the past couple years). Software, healthcare, fuel, utilities, and everything have gone up especially the past couple years. We kind of don’t have a choice. @lchasse<\/a><\/p>\n\n\n\n

I\u2019ve been gradually raising my rates ever since things started to pick up 3 months after I went freelance. The busier I get and the more leads that come in, the more I can charge. @ryanscollon<\/a><\/p>\n\n\n\n

No, because I’ve only really been pushing ahead with my business for a year (maybe less). Focused right now on building long-term relationships with clients I enjoy working with. @TheCopyTrail<\/a><\/p>\n\n\n\n

Yup. I do it fairly regularly. Reasons: 1. Costs are up ~15% YoY overall; if rates are increasing commensurately, I’m effectively subsidizing clients. Not good. 2. I’m better at what I do today than I was a year ago. If I charge the same, that’s not fair. @DigitalSamIAm<\/a><\/p>\n\n\n\n

Raising them all the time. If you are not a straight white man. I can pretty much guarantee you, you are not charging enough. RAISE THOSE RATES… if you got the skills to back them up.  @duanebrown<\/a><\/p>\n\n\n\n

We are constantly raising rates, but only ever raised rates on existing customers this year. Hated doing it but inflation is very high. They all understood. @gilgildner<\/a><\/p>\n\n\n\n

Yes, but primarily for new customers. @MenachemAni<\/a><\/p>\n\n\n\n

We do, usually every 2-3 years, depending on employee salary and overhead costs. I should know we bill on an FTE model, not on a retainer or commission model. @JonKagan<\/a><\/p>\n\n\n\n

<\/div>\n\n\n\n

Q2: Are you planning on or considering raising your rates for 2023? If so, why? And if not, why not?<\/strong><\/h4>\n\n\n\n
<\/div>\n\n\n\n

Already raised rates this year… so play it by ear. Right now I want to finish the year more than anything else and think about client retention over potentially raising rate.  @duanebrown<\/a><\/p>\n\n\n\n

Most likely raising rates with the way things are looking. The cost of living in the UK is getting worse. @ryanscollon<\/a><\/p>\n\n\n\n

For new clients they already got the new rates and I have started sending notes or letting them know on our calls about rate changes. Sometimes if you don’t have a lot of clients you can just quote your higher rates with new clients or if you feel uncomfortable. @lchasse<\/a><\/p>\n\n\n\n

Our agency did this year, yes. Why exactly is above my pay grade, but my interpretation is that the reasons are similar to what others have already mentioned (higher costs and more advanced skills\/offerings) @adclarke10<\/a><\/p>\n\n\n\n

Yes – especially for @ppcliveuk<\/a>. We would have worked out of just being a brand new entity to being a – we know our worth and it’s much more than what we had to offer 12 months ago. @TheMarketingAnu<\/a><\/p>\n\n\n\n

I am going to raise rates for 2023 for new clients. For existing clients, I have it set to review scope of work and pricing annually. Provides an opportunity to raise prices and also get the scope better tuned in. @NeptuneMoon<\/a><\/p>\n\n\n\n

Rates will likely increase for new retainers, but I’ll try to keep existing clients at the same rates. Our rates are high\/clients upmarket, so price shopping doesn’t really happen. @gilgildner<\/a><\/p>\n\n\n\n

Yup. I feel like raising rates should be a regular practice, not a once-a-year thing. It is helpful to use the new year to review scopes + fees with existing clients, just to ensure that everyone is still on the same page. @DigitalSamIAm<\/a><\/p>\n\n\n\n

Not planned yet. @JonKagan<\/a><\/p>\n\n\n\n

<\/div>\n\n\n\n

Q3: How do you go about raising your rates?<\/strong><\/h4>\n\n\n\n
<\/div>\n\n\n\n

For new clients, it’s about charging more for the work than I did this past year. Probably increase by 15-20%. They have no idea the rate is higher, so it’s easier. Existing clients it can be trickier. But if you’re up front & do the annual review, it’s easier. @NeptuneMoon<\/a><\/p>\n\n\n\n

For new clients it is easy. You just charge the different rate. With current clients I think just being honest and upfront about it. A lot of us don’t like doing it, lol. @lchasse<\/a><\/p>\n\n\n\n

New clients = price goes up on proposal. Existing Clients = I have a standard clause in my engagements that rates are subject to an annual increase of CPI +2.5% on the renewal date (contracts are 60 days rolling, but have a 1 year term), and\/or scope review. @DigitalSamIAm<\/a><\/p>\n\n\n\n

We build it into the scope of work, notify the client ahead of sending it over. At least 90 days notice. @JonKagan<\/a><\/p>\n\n\n\n

<\/div>\n\n\n\n

Q4: Are you nervous about raising rates for 2023? If so, why? Will the nervousness stop you from doing it? And if not, why not?<\/strong><\/h4>\n\n\n\n
<\/div>\n\n\n\n

Not really nervous. Our clients are having to raise their own prices too. Inflation affects everyone, so I’m pretty sure everyone’s gonna get real used to price increases anyway. Just what we all have to do! @gilgildner<\/a><\/p>\n\n\n\n

I only get nervous when raising rates for existing clients. New leads aren\u2019t necessarily aware that they are being charged a higher rate. I sometimes worry that I\u2019ll loose a good client if they aren\u2019t happy with the rise, but that\u2019s the risk I guess. @ryanscollon<\/a><\/p>\n\n\n\n

Used to be, but not anymore. The reality is that good PPC management\/ strategy is harder to come by than ever before — and it’s more important than ever in a low-to-no growth environment. That has real, bottom-line value for clients. @DigitalSamIAm<\/a><\/p>\n\n\n\n

There is always a chance that your price increase will be met with resistance or a firing. But most times, in my experience, it has not been. It is often just accepted, which I remind myself of! @NeptuneMoon<\/a><\/p>\n\n\n\n

Honestly – No. I’ve never been one too scared to hear “no – that’s too much for me”. I just quickly come back with a “what about…” email. If their ask is a piss-take, I’m okay (and saving enough \u00a3\u00a3 now) to be able to walk away. Never be desperate!! @TheMarketingAnu<\/a><\/p>\n\n\n\n

Big honesty here, I tend to be a pleaser personality so I hate having these conversations. It is more about me than what the clients will actually react with. When I do have them, it usually goes extremely well. @lchasse<\/a><\/p>\n\n\n\n

Someone will always have issues with our rate as we bill on the higher end. I want to think like Apple. You are paying for a premium product. @duanebrown<\/a><\/p>\n\n\n\n

A little bit, clients are vocalizing concerns over costs in general. @JonKagan<\/a><\/p>\n\n\n\n

<\/div>\n\n\n\n

Q5: Have you ever received pushback about raising rates? How did you handle it?<\/strong><\/h4>\n\n\n\n
<\/div>\n\n\n\n

In the beginning, we did (but we also had *very* small clients). As we have gone upmarket, there is essentially no pushback on rates, ever. We have found that clients past the $1-2MM\/year ad spend mark is the easiest to work with in terms of budgets. @gilgildner<\/a><\/p>\n\n\n\n

So far never, but I also tend to only increase by small amounts when I do, so that could play into it as well. Being small has advantages as my costs go up less than someone running a larger agency. @lchasse<\/a><\/p>\n\n\n\n

I have gotten pushback about raising rates. I was very honest and explained that our costs were increasing and that in order to cover those costs, we needed to raise our rates. That has generally been enough. Also, I wasn’t raising by 30+% @NeptuneMoon<\/a><\/p>\n\n\n\n

I did lose a contract over raising rates once. Stung a little that they would terminate over a 15% rate hike. But, the next client I booked as at that higher rate from go. No fuss involved! @NeptuneMoon<\/a><\/p>\n\n\n\n

Yes – I have heard “no that’s ridiculous” before and that was a relationship that didn’t happen. I responded by saying I am willing to come down a bit but I was then ghosted. no regrets. @TheMarketingAnu<\/a><\/p>\n\n\n\n

We get pushback on rates from time to time and yet people still end up signing. Usually, it’s X agency is cheaper by Y amount. This is a great chance to restate your values and why they should go with you. Otherwise, walk away. @duanebrown<\/a><\/p>\n\n\n\n

I know we’ve gotten pushback on rates. You just have to show your value. @beyondthepaid<\/a><\/p>\n\n\n\n

Yes, and I get pushback on current rates. Everyone wants it fast, cheap, and well done. You don’t get all 3. @JonKagan<\/a><\/p>\n\n\n\n

<\/div>\n\n\n\n

Q6: What is your biggest question about raising rates? Let\u2019s help each other here with sharing experiences.<\/strong><\/h4>\n\n\n\n
<\/div>\n\n\n\n

Has anyone considered offering discounts for beneficial contracts? For example, we had a big client pre-pay for the entire year this year. So we offered them a good rate. Think this is easily replicable? @gilgildner<\/a><\/p>\n\n\n\n

How do you make it so you don’t feel bad about asking for more? Sounds simple right? lol. @lchasse<\/a><\/p>\n\n\n\n

No questions. Anyone is free to hit my DMs if they want to ask me any rate and agency fee questions today. @duanebrown<\/a><\/p>\n\n\n\n

Ignoring the fact that the industry is flooded with “gurus” and “specialists”, the concern is always, am I out pricing myself vs my peers\/similar competitors. @JonKagan<\/a><\/p>\n\n\n\n

<\/div>\n\n\n\n

PPCChat Participants<\/strong><\/p>\n\n\n\n