Here is the passage I want to discuss:

As for the consultant who wanted to know how to augment his rates without alienating existing customers, Mr. Jacobs’s counsel was to be gentle. First, he said, increase them for new clients only, and use the exercise to explore how high you can push the rates.
Then, he said, the consultant should inform existing customers in person — not in writing — that he plans to raise rates by 5 to 10 percent. “Have a conversation as part of a regular visit,” he said. “Make it casual. Tell them why you’re doing it. Say something like ‘I hope we can work out an agreement.’ ”

It’s that last sentence that will get you in trouble. I agree with the writer about talking to current clients in person. However, I disagree with leaving them room to negotiate with you. When you say, “I hope we can work out an agreement” you are in effect saying, “This new price is not really firm and you can talk me down. Go ahead. Try.” If you feel compelled to tell clients why you are raising your fees, simply say, “due to rising costs.”

Yes, this is stressful. But the truth is that not everyone should be able to afford you. Even if you lose some clients who will not pay the new higher fee, you will create room at the top for higher paying clients. If you never lose any clients when you raise your fees, I suspect you are not charging enough. You will make more money with fewer clients if you charge at the top of the range. (I’ll save my thoughts on the emotional aspects of this for a different post. I’m just finishing the ebook on the emotional dynamics of charging people money.)

When you decide to raise your fees, make the new fees effective for all NEW clients. Then, let your current clients know that you will be raising your fees. Tell them you appreciate their business, and because they are current clients, you are going to give them two months notice. Let them know that you’ve already raised your fee for new clients. “Therefore, the new fees will not go into effect for you until…” I know this is hard, but you simply must make enough money to maintain a healthy business and avoid financial deprivation!

Well, at least I got this intellectual product thing started. Yeah for me! I will improve it and expand it. But at least I’m started. I give myself a lot of credit for that. What about you? What great ideas do you have that you are sitting on? Are you waiting until you have it all figured out? You’ll be waiting a long time…

I put together the rate-setting toolkit over the past six months. It is a combination of workbook and audios. Then I hired a marketing consultant. It was a LOT of work and much harder than the books lead you to believe.

The bottom line is I announced the toolkit to my subscribers and offered it on sale for two weeks. And the orders started coming in!!! Then the fear in the middle of the night awoke me. Was it good enough? Was it helpful enough? Were there mistakes? What if someone read it and it didn’t help them enough? What if they thought it wasn’t worth the money they paid? The front cover isn’t professional enough. There is a mistake on the back over. I could go on and on.

The good news is that I put it out anyways. If I waited until I felt everything was perfect, I would still be waiting. Of course we should put out the best work we can– work we can be proud of. But there is a line between doing great work and being overly perfectionistic. Have you crossed that line? Being a perfectionist can serve to keep you standing still.

Yes, it is hard to get away from the anxiety that comes with putting yourself out there. Being visible is stressful. What if they don’t like it? (We translate that to: What if they don’t like me?) But if I am going to earn my worth, I must go out on a limb and offer my work to the world. Change that: I must SELL my work to the world. There seems to be more money that way. (www.ratesettingtoolkit.com is where the toolkit lives by the way.)

I really liked some of the phrases he used to illustrate point number three. He writes:

If the way you communicate portrays a lack of confidence in your ability to charge the rates you want, clients will pick up on it. Phrases like: “Let me know if these rates suit you”, “But I’m open to negotiation,” and “Let me know if this is more than you can afford” all say one thing and one thing only to clients: “I hope you’ll pay me what I’ve asked, but I’ll easily work for less“.

Are you guilty of using any of those phrases? Instead, he recommends using phrases like “My standard fee for all clients is…” or “The minimum rate I do this kind of work for is…” I agree that this will discourage people from trying to negotiate.
Just remember, not everyone should be able to afford you. If everyone can afford you, you are not charging enough money. I would add to his list a fourth point. YOU must believe you are worth what you charge. So much of rate-setting is about convincing ourselves that we are worth charging our dream rate.

So there I was. I was seeing tons of private clients that week, I was preparing for the rate-setting toolkit launch, working with my new assistant and attending to 100 other details and then these emails started pouring in. I mean, POURING IN. I couldn’t keep up. Neither could my assistant. In the middle of it I left for an appointment with the eye doctor. She was late, of course, so I was cooped up in this little room, feeling like a caged animal. I ranted to my husband on my cell phone, “I’ve got to get out of this room!!!” I think the front desk heard me ranting. I’m trying to keep my cool. (Not succeeding). Then my personal cell phone rings, and it is my dad, “What is going on with your mailing list?! I can’t find this link…” and I started to cry. Crying is not good when you are seeing an eye-doctor, by the way. It makes it hard to check your eyes….

I spent several late nights responding to many, many people. I figured, if they actually took the time to email me, they must really want to stay on my list. I am honored by this! So I had better personally reach out as best I can.

I think I’ve gained some weight. It must have something to do with all the dark chocolate bars I bought this week. I’ve been nibbling away at night, coping with the anxiety and stress. Chocolate does seem to help, by the way. People think being your own boss must be soooo cool. Those of us who actually do it know the truth—being the queen of your own world has definite ups and downs. Yes, there is no cap on what we can earn. But there is no floor on how low we can go either. So you just ride along, as best you can, sometimes trying not to throw up. I’ll be more inspirational next week. I promise.

My marketing consultant told me that I would likely lose HALF my subscribers in the move. Everything else I read confirmed that. For me, this is about visibility. If I’m going to earn my worth, and spread my message to the world, (and yes, I believe those goals are completely compatible) I have to stay visible. I have to send out my newsletters etc. Of course it’s more comfortable to stay invisible—far less stressful. However, these is no money in invisibility

I know that not everyone will notice the opt-in messages and some people only read me occasionally. And it is good to have to clean out your list from time to time. But this really sucks. I’ve painstakingly built my list over the years, so the thought of losing half of my subscribers makes me ill.

Don’t you just love the setbacks that come out of the clear blue sky? Sometimes it takes a strong stomach to stay focused on earning your worth. Luckily I’ve been self-employed for a decade, so I strongly suspect I will survive this. If bad things never happen in business, you aren’t taking enough risks. (Or you live on another planet. Can I come and visit?)

Act “as if.” How would an experienced person in your industry act, when discussing her fees? Act as if you are that person and you’ll find your confidence increasing with each conversation. Practice, practice, practice.

Yes, as she says, telling someone about your prices can feel risky. But with risk comes great reward! As anxiety provoking as it is to take the risk of telling somewhat what you charge (no discounts!) the rewards are great. But remember—don’t talk about your prices until you are sure they need your services. Find out what they would like before you delve into pricing. (“Before we talk about price, can you give me a sense of what it is you would like done?”) Then if they are an appropriate client for you, you can tailor your conversation to what they are really interested in. And like Karyn says, even if you don’t feel confident while you are talking to them, fake it! It gets easier with time.

Many of us service-providers are “good girls” who always want to be nice. Colleagues and clients call with a “quick question” and thirty un-billed for minutes go by in the blink of an eye. Resentment sets in. We try to read our e-mail while half listening to the caller. (Anyone not guilty of that?) So here is a tip: after they identify themselves, instead of saying out of habit: “Hi Suzy, how are you?” say instead, “Oh hi Suzy, what can I do for you?” This immediately focuses the conversation on the task at hand and eliminates a lot of chit-chat. Said in a friendly tone, this simple trick works beautifully. So tape a note to your phone that says, “Hi… what can I do for you?” You will be amazed how much this helps. (Timothy Ferriss has a fabulous chapter called Interrupting Interruption and the Art of Refusal in his book, the Four Hour Work Week.)

Protect your time and start earning what you really worth!