Q: In November I landed a client that has given me tons of referrals and work. But he locked in a low rate at the beginning and won’t agree to a higher rate. He has referred 50% of my business this year and I like working for him. But I feel ripped off at the low rate. I’ve raised rates with everyone but him because I’m afraid he will drop me. I don’t want to burn that bridge. Any advice?
We do not look kindly upon low rates around here. Except maybe in the case of fire or being outright broke.
But in this situation you may do better by sitting tight. Especially if this pinchpenny has already balked at raising rates.
The key is the referrals.
It sounds like you are gaining more from his steady referrals than you are losing at his low rate. (You know the math better than me here.)
At this point in your career, widening your universe is probably more valuable than trying to coax an extra XX% from this one client. Especially if you think he — and his referrals — will disappear if you raise your rate. You lose the referral stream, and whatever work he was sending, even at the lousy rate.
Consider this. Endure his low rate until (a) the referrals stop, or (b) his $5 work gets in the way of doing all the $10 work you have on your desk. At that point, his business would be a net loss.
At that point, he gets a pleasant email announcing your new rate. He may actually pay. Or not. But you will have moved on.
In the meantime, of course, like this afternoon, you are eagerly chasing referrals from those new clients he sent you. To replace his bargain-basement work.
Get the snowball rolling. Then you don’t have to worry about this fellow.