Question

Topic: Career/Training

How To Inform Client Of Contract Rate Increase

Posted by Anonymous on 7/7/2009 at 5:34 PM ET 125 Points
Hello,

I've been working the corporate world for many, many years. I quit my job to stay at home with my new baby girl. Within 8 months after my little girl was born I landed this really sweet part-time job. The job not only utilizes all my skills, but I've learned many new things in this position. SharePoint Administration, Time Account Keeping, Marketing and lots more! I charge by the hour and do not receive any benefits of any kind. I work 99% of the time at home with very little overhead cost.

Now I've worked almost 3 years for this company and I feel like it's time to ask for an increase in my contractor rate. The only thing is I'm so clueless on how to approach the subject. Any thoughts? A sample letter? I would love to hear any input!

Since I've joined the company, their profits have increased dramatically. I'm not ashamed to say that I'm a huge asset to this company. It's a very small firm with only 12 employees, but they make TONS of money.

Thanks for your answers!
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RESPONSES

  • Posted on 7/7/2009 at 8:48 PM Accepted
    This is a perfect time to switch from an hourly rate to a retainer. That way you can charge a bit more without having to deal with what your hourly rate is.

    I suggest you read the section on pricing professional services in Rasputin For Hire. The subtitle of the book is An inside look at management consulting between jobs or as a second career. While the book is directed mostly at management consultants, much of it -- including the section on pricing options -- applies very directly to all sorts of marketing service businesses.

    And if you use the link above to order the book you'll get a bonus report download (PDF) containing a round table discussion with five of the experts from the MarketingProfs Know-How Exchange. They share their experiences and advice for new and wanna-be consultants.
  • Posted by Gary Bloomer on 7/7/2009 at 9:25 PM Accepted
    Dear Webmaster,

    Do you know how much you, personally, have added to the company bottom line in the time you've been with them?

    If you do, you can use this as leverage because your skill set is probably such that with minimal effort on your part, you could be offering the same services to other clients at premium rates.

    There is nothing stopping you putting the mechanics in position and plumbing the waters on your own to test viability. Then, depending on the results of this test, you could ramp up gradually until your own business is holding its own and turning a tidy profit and make your current employer an offer, and perhaps one they cannot refuse.

    I hope this helps.

    Gary Bloomer
    Wilmington, DE, USA
  • Posted by michael on 7/15/2009 at 9:46 AM Accepted
    3 years...small company...Don't send letter.

    Tell the owner you want to talk about where he sees your role in the future. When you get that "vision", then it's time to suggest that you might be worth more than you're getting.

    "I like that vision, I just don't see how that can happen based on our current agreement"

    Michael
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