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EG6: Raising the rates for existing customers (8-steps plan)

Written by Emanuel Martonca
on September 14, 2021

This could very well be one of those things that give you sleepless nights: how to raise the rates for your existing customers. Or, you have already blocked these thoughts completely and don’t even think about it any more.

“How could I even contemplate raising rates”?

Maybe you feel that you have such a good relationship with your clients that even mentioning raising your price will feel like a betrayal (to you and to them). 

It’s not uncommon in software development to have customer – supplier relationships that extend for 3, 5, or even 10 years. When you work for so long with someone and you go through ups and downs, starting from almost nothing and building a product or a complex platform together, it’s obvious that the business relationship takes on different meanings and it gets personal.

In other situations, you might depend so much on this one customer that you see a big risk of losing the project if you even give a hint that you want to increase your prices.

I am sure you can also give me tens of other reasons why you have not tried to increase your rates in a long time.

Between a rock and a hard place

Team members will keep asking for higher pay and you will keep raising the salaries for both existing and new employees.

Clients will keep pushing to pay as little as possible for your services. 

That’s what they are all supposed to do.

Which means that you are stuck in the middle.

If there is one skill you need to master in this business, it’s this one: raising your rates without breaking a sweat.

How to deliver the message to the client

Every time you have thought about this I bet that your mind jumped to the most difficult moment: delivering the message.

There is only one answer to this question: PREPARATION. 

You cannot just pick up the phone or, even worse, send a quick email, and expect to have a positive response from your client.

The key to the whole process is preparation.

One example: who is going to deliver the news is just as important as the how.

It’s sometimes better if another team member gives the message to the client. The account manager (or project manager) is still part of the conversation, is in the meeting with the customer, but the actual negotiation is done by someone else. This increases the chances of getting a better outcome for you and it keeps the personal relationship intact.

Make a plan

If you have decided that you want to raise your rates, here is a 8-step plan that can guide you through it:

  1. Document the why 
  2. Decide which clients
  3. Assess quality delivered
  4. Calculate the new price level
  5. BATNA (Best Alternative To a Negotiated Agreement): yours, theirs
  6. The Negotiation Team
  7. The Meeting
  8. Follow-up & Negotiation

All of the steps are equally important. Don’t skip any and approach each of them as diligently as possible.

Notice that the first time you actually talk to the customer is in step 7. As I was saying, preparation is critical.


Just think about this topic.

Take at least 5 minutes now and ask yourself

  • Do you need to raise your rates?
  • How much would you stand to gain if you manage to do that for at least some of your customers, if not all?
  • How much time would you need to invest to actually make this happen? 
  • Is there anything keeping you from it?

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