EP234 - Raising Your Rates - How, When & Why

0:00 Hello and a warm, welcome to this episode of the PPC chat Roundup podcast in this episode. We've got Julie taken us on another great topic talking about, raising your rates. How when and why? Yeah, definitely a good topic in to talk about the coming to the end of the year because a brand-new year beginning of the years, always a good time to really review, whether your rates are the right level, whether you're going to be doing a lot more, you've been, you're doing a lot more for your clients and you know what to do to actually improve that and really prove your worth. And honestly I put a tweet of early this morning and with before I even knew what the chat was going to be about and it was from this show called the office.

0:44 You probably heard of it for Steve Carell's version of it in the u.s. it's this quote of him saying I was never in this for the money but it turns out that the money was an absolute necessity for me and sorry. With economic crisis, with issues covid posed, with a lot of layoffs that have been happening, it shouldn't come as a surprise to anybody that as much as we do love our job jobs, most of the time if it's not pain. Well it's not really going to be worth it for us in long term. So we talked about how we talk about the money issue, how we talk about when we bring it up, you know how uncomfortable it can be but more importantly why it's important to do it. And when to know, when to walk away, and went to make sure that you are expressing your work and you're not backing down. All right?

1:36 Hope you enjoy. Hello. And welcome to this episode of the PPC chat round up a podcast where I round up the Twitter discussions that happen on Tuesdays at 5 p.m. GMT. I'm your host Andrew and I'm recording from my studio here in London UK. And I use this platform to share not just expert but also my ideas and considered best practices about paid media and the direction the digital industry is going in. So if you want to keep up to date with my tips and tricks in the industry, and get the latest on the podcast that has been called your go to even if you don't make it to the BBC chat live discussions and even if you do then like foolish and retweets on, that's right.

2:23 Twitter with my handle the marketing, a new or join us in our LinkedIn Group which is the PBC chat around. Our podcast, or if you on Instagram, why don't you check us out, at PPC, chat underscore Round Up to get quotes and Snippets from our previous episodes. So we have Julie taken us on another great and timely topic talking about, raising your rates, how, when, and why? But as usual she starts off by saying, how are we doing the bit of a roll call of whose hair? I was happy to join this chat this time doing great. I said very excited. That is my last week before my day job holiday. Because ya next week, Tuesday from Marin, I will be on holiday till the new year. As for my other brands in the PPC love UK and the the podcast, I'll need to check, you know, with the boss. Are you me when I plan on giving myself time up? Who knows learns response as well. Same the home strike for the holiday season is are next week. We'll provide some breathing room again. Don't I hear that?

3:26 I totally totally feel that. Julie advice joints a not Bad things everyone. Last week before holidays, make married, love it. And yeah, Julie then goes before we get to the questions this chat is intended for PPC, Professionals of all levels. If you have something you would want to share, please do we are friendly and supportive Community. Please don't be afraid to participate. Lurkers. And the listeners to this podcast are, of course, always welcome. Before we get to the chat, we also have Lawrence's Court of course, who suggested the topic joining us, as well as Ashwin of Optimizer and Melissa Mickey and I'm sure several others reince: as well and I'm sure more will be showing up as the chat goes on.

4:07 So yeah, let's get to the questions today we have Julie asked him. Have You Ever Raised your rates if so why? And if not, why not a gorilla who is the founder of advertise, who do they do? So I paid social media. There goes our yes. As more demand for our services come in for my consultancy. See, as I continue gaining gaining more knowledge and experience becoming more efficient and effective to help brands with either challenges and goals. Manage him goes. Yes. But primarily for new customers reince: response. I've been gradually, raising my rates ever. Since things started to pick up three months after I went freelance, the busy I get. And the more leads that come in, the more I can charge your gonna respond saying, we are constantly raising rates but only ever raised rates on existing Customers this year, hated doing it for inflation is very high, they all understood. Of course, the good ones, who are getting the raising rates for the first time will understand Walter. Don't hire response in.

5:14 Yes, depending the busier. We are on first, we wait, we rise to new customers and then Melissa Markey response saying, rate setting is above my pay grade, but I know we have raised them overtime. Just to keep up with market conditions, learn Respond responds with large agency. It's probably even more important. Real estate costs. All those computers benefits, probably gets more expensive. Melissa goes, oh yes, so much overhead and we have Lawrence's to himself as well responding saying, 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.

6:00 And then we have Ashwin responding to question one saying, 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 Sam response saying yep I do it. Fairly regularly reasons, one costs are up about fifteen percent year-on-year. Overall if rates are increasing commensurately? I'm effectively subsidizing clients. Not good. I'm better at what I do to Today than that's, number two. I'm better at what I do today than I was a year ago if I charge the same. That's not fair. Action goes really like number two, gonna keep that in mind.

6:41 When my time comes, it will come Ashman. It certainly will when Brown respond saying and raising them all the time. If you are not a straight white man, if you are not a straight white man, who I can pretty much guarantee you, you are not charging enough. Raise those rates if you got the skills. The back them up. Love that from join. And yeah, when Ryan Scotland had said that I've been gradually raising my rates ever. Since things started to pick up three months after I went freelance, some response, 100%, my rule of thumb is that if I win more than 50% of proposals, with no pushback on rates, they're too low. So yeah, if people are not pushing back, if people are not surprised by your rates, you are not making them high enough.

7:27 So yeah, there's always room to increase. Also Julie does note out Duane and his team team survey that they do. It's a salary survey. So if you go to take some risk.com forward, slash salary, hyphen surveys. You'll see like this survey salary survey that they do every year to pretty much get let yourself get review, where you sit in terms of salary rates, comparatively in terms of you the country you're in your gender. And in terms of different aspects they split out that report On different aspects and it's really interesting, really interesting read and I love the that they do it every year. Jillian, takes us on to question 2 sin. Are you planning on or considering raised considering raising your rates for 2023 is so why? And if not, why not ran response, a most likely, raising rates with the way things are looking, the cost of living in the UK is getting worse.

8:22 Yes, it is. And then, we have gildner responding saying rates, will likely increase for a new retainers, but I'll try to keep eggs. Existing clients. At the same rates are rates, are high and clients are upmarket. Surprise shopping, doesn't really happen. And then we have Dwayne Brown responding seen 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 rates Lawrence response saying that for new clients, they really got the new rates and I have started sending notes or letting them know on our calls about race 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, Ashton, cock response in our agency, did this this this year. Yes.

9:11 Why exactly is above my pay grade? But my interpretation is that the reasons are similar to what others have already mentioned in terms of higher costs and more advanced skills and offerings. And in terms of question to respond saying, I don't believe so many because we just raised them within the last Six months and I said that in terms of planning to raising rates, I was like, yes especially for PPC live UK and this is for the sponsors, not for, you know, ticket prices ticket prices might might increase a year and I'm like, I'll give it a few months, but we're talking. It's always still going to be able o to digit number and we're talking low two digit in the 20s. Maximum is what I my brain is thinking and it continues.

9:54 We would have worked out in about a year or less, you know, just will worked out. We would have worked out of just being a brand new entity to being a. We know all was and it's much more than what we had to offer 12 months ago. So I'm thinking that rates my increase at the 12 month Mark or the 13 month mark because at that point, we know we're bringing a good crowd will see how well a good crowd we can bring. And yeah I'll be really interesting to see what we do and actually responds to that, girl, get paid. I knew love it. Love and actor. Love the support from the community. As always Julie, then response to question Tuesday, and I'm going to raise rates for 2023 for new clients, for existing clients. I have.

10:38 I have it set to review scope of work and pricing annually. Provides opportunity to raise prices and also get the scope. Better tuned in Lawrence goes. This is a great idea. Personally don't do this enough. Julie goes, it is so easy with long-term clients to never revisit things and just add items to an existing scope. We all learn things about how to best Will different types of work to be profitable. We don't want to get stuck in an old in an old model that really doesn't work. Then Julie takes us on to question three saying, how do you go about raising your rates and Julie kicks us off with that one saying, answering for new clients. It's about charging more for the work than I did. This past year, probably increasing by 15 to 20%. They have no idea.

11:26 The rate is higher, so it's easier, existing clients. It can be Trickier. But if you're up front and do the annual review, it's easier Lawrence as well response to question. 3 saying 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 that. No no load of us are find that very easy to do, not too many answers for question 3, but I'm sure more will come later. But we're going to question for for now. Julie asked as well. Are you nervous about raising rates for 2023? If so, why will the nervousness stop you from doing it? And if not, why not Ryan response to question? For they're saying I only get nervous when raising rates for existing clients.

12:10 New Leads aren't necessarily aware that they are being charged, a higher rate. I sometimes worry that I'll lose a good client, if they aren't happy with the race, but that's the risk I guess. Gil, Gil knows well response, a not really nervous. Our clients are having to raise their own prices to inflation effect. Is everyone? So I'm pretty sure everyone's going to get real used to price increases anyway. Just what we all have to do and then we have some responding to question for saying used to be but not anymore. The reality is that good PPC management or strategy is harder to come by than ever before true. And it's more important than ever in a low to no growth environment. That has real bottom line value for clients Julie, then gives another answer the question for sale. There is always a chance that your price increase will be met with resistance or a firing.

13:05 But most times in my experience it has not been. It is often just accepted which I remind myself of and then you're in response to Sam's honest question. For waste time, I said used to be but not anymore. The reality is that good PPC management or strategy is harder to come by than ever before. And girl responds saying, yes, PPC has the distinct advantage of being Revenue. It Adjacent re-spend has direct correlation with profit, for the end client, easy to sell. Dwayne Brown respond, saying we have, we have to be careful of this pain to profit correlation especially in ecoman dtc's that has direct to Consumer.

13:46 I bet we have all seen account spend money on skews that convert and bring little to no profit to clients. Not enough people do skew optimization to analyze this data gildner response and Yap although with Well, structured e-commerce campaign. The rowers a rowi will be high especially splitting out products by margin. If it's not profitable, they went to be advertising for long. Doing Brown response saying you're a high-rise is relative to an add account and a brand gross and net margins. Your Tweet mentions revenue and profit which are different. We need to make sure as an industry we do interchangeably use revenue and profit since they lead to different outcomes in accounts and they're not Quite an answer to any of the questions but Julie does make an aside saying as an aside.

14:34 It's not the worst idea to take a look at your pricing structure or model to what worked before might not work as well. Now, the way you thought a particular service would be TimeWise, might be way off, make this a regular practice and then I responded question. Forcing honestly. No, I've never been one to scared to hear. No. That's too much for me and I just quickly come back with her. About, you know, and I can email or even on the phone because it's all about negotiating and not be scared about, you know, a negative response. And if they ask is a piss-take, I'm okay. And do you know, and saving enough money now to be able to walk away. So, yeah, right now, I'm all about making sure there's enough money in the bank account to last me for three months of not needing to work.

15:24 So I'm never in a state of being desperate. So, yeah. I think all those kind of things. Things are definitely very important Dwayne Brown and response to question, 3. Seen combination of seen what is other there in the market? How has our expenses changed and maintain our profit margin learns. Chase response. Question forcing, big honesty. Hey, 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. Julie responds. Yes! Sometimes we build up in our minds, how Had the conversation is going to be an ad and it ends up being short and simple and ends up with acceptance because people know that the cost of things are going up and you deserve your pay during Brown response to question.

16:13 Forcing, someone will always have issues with our rate. As we build on the higher end, I want to think, like, apple. You are paying for a premium product? Yes, sir. As well as PPC live, being a premium product, Julie, then goes on to give us questions. Five saying, have you ever received pushback about raising rates? How did you handle that? Yeah, as I said before, I've had definitely had pushed back. Someone said, no outright. They actually came back and then to change our mind and then ghosted me, I like what's the point? And because, yeah, I'm always confident to stick my to stick to what I'm saying, because I know my was go Gilman response to question fighting in the beginning. We did. But we also had very small clients as we have gone upmarket. There's essentially no pushback on rates ever. We have found that climb Pause the one to two million dollar a year at spent Mark or the easiest to work with in terms of budgets and we have Lawrence responding to question five saying so far never.

17:11 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. Oh, you're too kind. Lawrence, you're probably giving away a lot of knowledge for free. Julie the unresponsive Question 5 as well as and I have gotten pushed back about raising rates. I was very honest and explain that our costs were increasing. And that, in order to cover those costs, we need to raise our rates that has generally been enough. Also, I wasn't raising by 30%, plus she continues. I did lose a contract over raising rates rates once stunk, a little that they would terminate over 15 percent rate hike.

17:55 For me, that just sounds like someone was looking for an excuse but the next kind I At that higher rate from the go, no fuss involved. You see you lose some, you win some, when Lots, even learns response to that? Yes, I turned to stay around that 10% Mark when I do it. Ten percent is not enough Lawrence. Make that 15 you if the number doesn't scare you, it's not high enough. That's my philosophy. Gilligan takes us to the last question of the day. What is your biggest question about raising rates? Lester, Let's help each other hair which sharing experiences. Has girl responds saying, has anyone considered offering discounts for beneficial contracts?

18:35 For example, we have a big client prepaid for the entire year this year. So we offered them a good rate. Think this is easily replicable during the response. I would want to know ahead of time that was the billing cycle they wanted and I'd price accordingly because discounting work is a sip slippery slope. Yes, you get all the dollars at once but once you offer a discounted rate. It is hard to increase Gil response, most traditional agency. Bill media spent annually or quarterly in advance, so this company was used to having the model rare for PPC braid, definitely worked out for us. So we plan on doing it again. If we find ourselves in those scenarios and then the Lawrence gives his own question in terms of answering questions. Sex and he goes, how do you make it? So you don't feel bad about asking for more sounds simple, right?

19:30 He just got to get past it and know that your costs are worth it. Yes, it sounds too simple. And on that note, we come to the end of the chat. Yeah, we knew that last question was the last question really goes? Thank you. All for great chat. Looking for the looking, for the recap plates, post later this week on the PPC, chat side. She puts it on official, PPC, chat.com. She will be hosting next week again with the topic of PPC holiday. Wishlist. Yes, that is a long wish list. Terms of what we wish. Google Microsoft Facebook, and all the other platforms will do there is also a LinkedIn private groups. If you go to LinkedIn, look for PPC, chat, you will find the group's. I'm sure she'll be happy to, you know, invite you to that. And there's also a PPC chat Twitter community and yeah if you just had for that I'm sure you'll be able to find it as well.

20:22 So yeah that brings us to the end of our chats. I hope you have found that child very useful. If you want to continue talking about Stuff like what we were talking about. Join us on Thursday, at 5:00 p.m. GMT. 12 p.m. eastern time to. Yeah, I do to join the chat and to talk more about asking for a raise that. Not even asking for raising your prices, and raising your cost. As an agency was, a freelancer, was a consultant and a see where that takes you to. So, yeah. Maybe you want knows what? I want. Some more tips, you want to give some tips on how to do it, and how you've done it before successfully. We'd love to have you there. So, yeah, if you On this talk useful and taking some great takeaway and you want to even like yeah, give some corrections or updates about what the chat is, please.

21:07 I'd continue with the chat, going PVC chat handle, hashtag even and continue the chat or send me a DM. I'd love to hear from you but tread lightly. I don't like sales diem but yeah, I would love to chat about anything on this topic. I will also be great for my long-standing and brand new listeners to give the podcast a review or be great to as a group strategy to get more or people interested in knowing that this is a podcast that is useful for people. And yeah, if you go to link tree.com /p PC chat underscore round up, you'll get all the links of where you can leave a review or rating, especially on Spotify. It takes seconds to just give like a star rating. And yeah, definitely always using this opportunity to talk about PPC live UK with.

21:54 I have the next event in the new year, on the 2nd of February, we've got four amazing. Because while spoken at other stages before we've got Maddie Crawford, we've got surfing Logan who from Victor has the head of paid media as mmm. Ahmad, who does, who has a podcast? The top 10 podcast, I don't want to mess up the name of that podcast. But is he has a fantastic podcast go and check the I said she's named search on his Twitter. You will find the part cause I think it's a Zine speaks zoom digital speaks because he speaks to death threats. Different people in the marketing world and the fourth in is Tiffany shares. So that is Maddie Crawford Tiffany shares as a Muhammad and Sophie Logan talking about four amazing topic.

22:37 So yeah. Go to PC live UK.com to find out more about that. Finally, remember for your campaigns and businesses to Glide smoothly, there's a lot of hard work needed beneath the surface, so keep your swans kicking by and speak to you next week. in is Tiffany shares. So that is Maddie Crawford Tiffany shares as a Muhammad and Sophie Logan talking about four amazing topic. So yeah. Go to PC live UK.com to find out more about that. Finally, remember for your campaigns and businesses to Glide smoothly, there's a lot of hard work needed beneath the surface, so keep your swans kicking by and speak to you next week.