How should you format and write a rate increase letter?
I am a legal billing coordinator running my business as an independent contractor. I currently have four separate law firms that I do monthly billing for. I am trying to come up with a way to increase my rates based on my skill set. What I do is not a really known trade, but a diamond in the rough when found. I do not have a place to check current market rates for a business like mine. Is there any advise on how to write up a rate increase letter? Thanks to all who respond.
HI Amy, Whilst I agree with Scott - there's nothing like a face-to-face meeting to discuss your point - I agree with you that you need to put it in writing. I also agree with you that you should draft the letter first so that you have a consistent well-thought through argument for your meeting.
When drafting these letters you have two objectives; firstly, to get your clients to agree to the fee increase; and secondly, to maintain your client base. To achieve both, your argument needs to answer the question: "what's in it for me?" from the perspective of your client. My suggestion is a brief 5 paragraph letter:
Paragraph1states your intention and the benefit to your clients, eg "each year when I review my fees I set them so that my clients receive a service that is good value for money"
Paragraph 2 focuses on the value for money benefit and how you will continue to provide that after the fee increase.
Paragraph 3 states the new fee
Paragraph 4 invites your client to discuss the new fee with you should they wish to do so
Paragraph 5 takes the relationship into the future beyond the fee discussion eg "I look forward to continuing to working with you"
Amy: Why would you write a letter and not pickup the phone or meet with your valued clients to discuss a rate adjustment? On your website you say, "This service will save you money...". Assuming that you are providing value to your clients, they are highly satisfied with your service, and you are actually saving them money, you should be able to have a candid, value-based conversation with them on this topic, especially as any renewal period approaches.
Hi Amy. Clients love choices. Combine Scott and Mark's solutions ie consider what value you are creating for your clients then outline three options for them in writing. This moves their thoughts from - "Will I accept Amy's new price or look for someone else?" to "Which of Amy's options suits my business best?
I would ask places like Robert Half group and other recruitment type firms, what contractors usually charge, and then base your information on a common consensus, or you could try Indeed's pay grade portal thats pretty effective. But the best way is to be honest. How much are you worth, whats your targeted income and come up with a number. Be proud of your worth.Be confident in the number you come up with, and most companies will honor that. If your skill set is as valuable as you say, they will gladly pay war you ask because you have your niche, and have very low competition. So its in your best interest that way.