Ask HN: What should I do to be able to raise my rates? | Hacker News Reader

Ask HN: What should I do to be able to raise my rates?

13 pointsaymeric14 comments

The recent post about Sam charging $1000/hr (http://samsoff.es/posts/one-thousand-dollars-an-hour) and the fact that my current client just spent $30K on a load testing provider who didn't provide much value made me think about the things I should do to be able to naturally raise my rates.

Here are the things I can think of:

- Raise my profile by speaking in local events

- Polish my website to showcase my experience (10 years in .NET and numerous side projects)

- Pick a niche that provides high perceived value: security / training / load testing (apparently)

- Charge per day or per week rather than per hour (as suggested by patio11)

What else do you suggest me to do or has worked for you?

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The easiest way to raise your rates is to raise your rates.

Totally not joking. One of the reasons tptacek and I go on the war path about this is that us geeks seem to be culturally abominable at properly pricing things. I mean, half the comments on the $1,000 an hour rate are people who a) are geeks selling services and b) want the geek to lose.

There are other ways to raise your rates:

1) Specialize in a particular thing which is in-demand by...

2) ... savvy clients who receive a high, easily quantifiable value from it and ...

3) ... has limited competition available.

But even HNers who do, e.g., commodity PHP web development could probably get 50-100% more just by turning down anyone who doesn't pay 50-100% more.

I completely agree with all the points. The key is to find a specialized/niche domain where demand is high but competition is limited. But in some cases, you can just ask for a raise and it might work. It is very common that lot of people are afraid to ask for a raise thinking they won't get it.

I think it's the fear point of 'if I do this and put my prices up, what happens if I get no clients'. Which of course is a reasonable thing to be scared of, and if it doesn't work then drop your prices back and work out what you can do to be more valuable.

Any thoughts on how to land the jobs to begin with? So far the largest gig I've landed was actually due to my comments about the hiring market if you're not at the top end.

3) is definitely the hard part. People all over the world realize there's money to be made and have joined into the labor pool for programming, design or pretty much any sort of creative class service. Some of those people are unskilled, but others are on par with workers in expensive countries.

Hi Patrick,

I have actually experienced with my own rates over the course of a year, and found that there is an upper limit where clients don't call back after the first project because it is too expensive.

I think the nature of the work you do is as important as your public credibility when it comes to rates.

For example, if a lead comes from someone recommending me, I can easily charge more.

experienced -> experimented

Great advice. Another way to think of it is to look for areas that companies often have teams of people working for weeks (or months) to solve a problem that you can solve in a fraction of the time. If they are spending $100K to not solve the problem, asking for $120K to solve it in two months is a good deal for both sides.

You can never get more than your perceived differential value, but buyers will be happy to pay you far less if that's OK with you. ;-)

Why do you need a specific reason?

If you feel you are worth more money, starting quoting projects appropriately. The market will respond with data ( or lack thereof) which you can incorporate.

How do you find higher paying clients for example?

How do you push the upper boundary of how much you can charge without turning away all your leads?

How do you find higher paying clients for example?

There's many ways to do this. One way is to figure out who has ability and desire to pay for things in your area of expertise. I help folks sell software. One way to find people who are capable and desire to pay $$$$ for selling more software is to go to conferences about that that charge, e.g., $2,000 per ticket. If you send a team of five people to that conference, you're not too likely to be scandalized when I quote you.

How do you push the upper boundary of how much you can charge without turning away all your leads?

The lowest risk way to do this is to have all of your needs met at your current utilization level, at which point decreasing your hit rate basically can't harm you, so why not quote higher? If you get engagements at $CURRENT_RATE + 25%, then a) your new rate is $CURRENT_RATE + 25% and b) you've got even more flexibility in turning down engagements.

Repeat as necessary.

This was my approach with EFL of all things, believe it or not. As a 27 year-old in Taiwan I was successfully billing $50USD/hour for helping 9 year-olds with problem areas from their recent beginning-level classes. The rate for most native English speakers doing that kind of work at the time was $20USD/hour.

I did have far above the median skills to back it up, though.

One element that I feel is quite important in the post you mentioned (Sam charging 1k per hour) is that Sam has actually shipped something, though I don't know how successful his app is. I'm guessing that a lot of devs don't have this experience (A - Z participation in shipping something.) Even a lot of small start-up devs are likely shielded from many of the headaches that go into doing something like this. The experience he has picked up is very valuable and could probably sell a lot of hours in client work.

I actually shipped _a lot_, so you think this can play an important part in the process?

Just do it. No one will come down on you or anything. Do a quick A/B test. For the following clients, split them in two. Given side A your current rate, and side B your new rate. Measure the difference and prepare to realize that there is none. People who will hire you will hire you. Money gravitates to those who ask for it, and not to those who "deserve" it.

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