Freelance Pricing Philosophy IV: Getting Rid of Customers

So many freelancers (or sellers of any product or service) are afraid of raising their rates because they might drive off customers.

That's precisely why you should do it in some cases.

In some of the better run banks, pricing is considered a legitimate "exit strategy". In other words, when you have a customer that you'd be better off without, raising your rates is a good way to encourage them to find someone else to work with. In banking, that "someone else" is often another bank with lower standards, who will end up making an unprofitable loan to the customer you're trying to shed.

Earlier I mentioned the higher rate for customers who trigger"nuisance factor" pricing. These are people who are tough to work with, where you're going to pay for the privilege of their business with stress and unreasonable demands.

These are ideal candidates for higher rates. If they don't like it, they can find someone else to inflict their whims upon. If they accept your higher rates, then at least you're better compensated for all those extra little last-minute things you're going to do for them.

Of course, if you can't afford to lose the customer, you can't afford to price them out of your business. But that has more to do with your marketing efforts than your pricing philosophy. If you can't afford to give up any customers, you're not doing enough marketing to keep the pipeline full, and to give yourself the opportunity to replace less desirable customers with more desirable ones.

Once you have more people wanting to work with you than you can handle, review the customers already on your list. Instead of saying, "I wish I could take on some of this new business," ask yourself, "Which of my current customers could I replace with someone better?"

And then adjust your rates.