As the year comes to a close, it's easy to get wrapped up in finalizing all of those last-minute projects for your clients. But this is also a great time to perform an end of year assessment of your voiceover business. Take time to go through your client list, marketing, financials, and if you haven't already done so - go ahead and review that current rate guide of yours. Are you charging your worth? And if not, could this be a good time to raise your rates?
Chances are, when you started in VO, your rates were more "cost-effective" for your new clients. You probably justified this because you were a new talent, less experienced, and hungry for work.
I get it.
Full disclosure here - I did the same thing <GASP> when I first started out many moons ago. I have since learned my lesson and, like any good Mamma Bear, want to share my experiences with you so you can avoid making the same mistakes I made. Take a look at your business now, and ask yourself, “Should I still be charging the same rates?” As your business grows, it’s important to increase your rates from time to time as it reflects your increased skillset and experience. But I hear you, raising rates can be tricky, and it's scary! It takes COURAGE to raise your rates. You certainly don’t want to lose clients because you’ve become more expensive. Let’s talk about how and when to approach raising your rates, and how to do it in a fair and easy way that will actually create more customer loyalty.
When is a Good Time to Raise my Rates?
The first thing to do is to take an accurate look at whether or not now is the right time to adjust your rates. The end of the year can be an especially sensitive time for people, and may not be a great time to inject your customers with a price hike. But you can certainly assess and plan for the best time now. Most of us think the best and most logical time to raise our rates is at the beginning of the year. However, I have been successful in raising my rates mid-year, and this can sometimes be a more subtle way to introduce new rates to your clients. Especially if you already know your worth and bring clear value to your customers. An essential question to ask yourself is how busy are you? Do you have a full schedule of work? The answer to this question engages the law of supply and demand. If your VO business is in demand, it may be the right time to increase your rates. Next, have you looked around the industry to gauge what other businesses or people in the industry are charging? If your rates fall below the industry standard, raising them is almost always justified. Also, consider the rising costs of doing business year after year. At a minimum, your goal should be to keep pace with your own expenses.
Time is on Your Side
The longer you’ve been working for a client, chances are the more they value your work. Repeat business is a sign that your client trusts you, likes the VO that you provide, and appreciates the relative ease of your working relationship. More than just the voice you bring, they are willing to pay for that reliability and comfortable professional communication. But here’s the deal, you want to honor that relationship by informing your clients of your upcoming rate increase well in advance. Give your clients time to adjust to a new price. If you spring a rate increase on clients overnight, sometimes the sticker shock will cause a knee jerk reaction and could lead to that client dropping you. Give them time to adjust to the idea of the rate increase and you’ll find that clients understand and accept an increase willingly. Be confident that your new price is what you're worth. If your clients push back, tell them you're willing to help them out a little, but this is the industry standard for the services you sell. Go ahead and refer to the standard rate guides out there such as GVAA and SAG-AFTRA. It's not bad behavior to believe in your worth and what you're doing.
Put it on the Calendar
Businesses like predictability. You can bet your clients have a yearly, quarterly, and monthly plan. They look at the year and plan out employee reviews, when they are going to launch a new campaign, and when they close the fiscal year, just to name a few. You want to become a part of your client’s yearly plan. That is to say, raise your rates around the same time every year. This will allow your clients to expect and plan for rate increases. You don’t want your customers to feel surprised or shocked, so create an expectation that your business reevaluates rates on a yearly basis. Some VO talent even write this into their client contracts. The bottom line is that you want to give your clients all the time they need to plan for a rate increase. And if you are already at the top of the market price and decide to stay where you are, it's a win-win for both. For new clients, it's certainly easy to simply charge your new rate, especially if you don't publically post a rate sheet.
Go Gentle Into that Good Night
We all dream of that 50% salary bump. It’s awesome to think that you could make a jump like that. Heck, even 20-30% seems on the good side. But the reality is, you should keep your rate increases to 5-10% at most. It may not seem like a lot to you, but it will to your clients. Most employers have co-worker evaluations at the end of every year. [In good ecumenic times] a perfect score typically translates to a 5% raise. Keeping the price increase at 5-10% will allow your clients to see this increase more as a standard business practice, and less of a price gouge. You can also play the percentage game to manage your client’s perception. For example, let them know well in advance that you are approaching your yearly rate increase of let’s say 15%, but because of the volume of work they provide, you’ve decided to give them a 5% discount on all future work for the year. This creates what’s called an “anchor price” of 15%, and when they see that their increase will only be 10% they’ll feel like they are getting a deal because of your business relationship. Meanwhile, you’ve been able to raise your rates by 10%. Your client is happy and you’re happy!
“I’m Afraid of Worms, Roxanne”
There are undoubtedly new expenses, equipment upgrades, coaching, and demos that you’ve invested in during the last year. Heck, maybe you’ve been laid off from your full-time day job, and raising your rates is necessary in order to make ends meet. While all of this may be true for you, be careful of what you include in your notification to your client. It’s tempting to lay out all the “reasons” for your need to increase your rates. But the short of it is, as a person your client may empathize with your situation, but as a business, unless they see a benefit to them, they won’t really care. That may sound a bit callous, but I assure you it’s true. People may be empathetic, but businesses care about their bottom line. So, take advantage of that perspective in your communication with them. Choose your words wisely. Outline the features of your business that you’ve upgraded for their benefit. Like studio upgrades, new gear, connectivity features like Source Connect or ipDTL. Be sure to frame it in a way that is focused on what their business is gaining. This way you’ll ensure that you remain a vendor that provides excellent service and value for their company.
Too Soon?
Lastly, think about how long you’ve been working with each of your clients. Instead of rate hiking the same amount across the board, look at each client individually. Every client is unique, and you may find that each client will tolerate a different rate. For example, let’s say you’ve landed a client that you started with 4 months ago. While your relationship is good, it’s not really established enough to justify a rate increase, and your client may see the increase as more of an inconvenience rather than a value. More than likely I’ve already established a more current market rate with them anyway, as I am always mindful to charge my worth. I’ll let my longer-term clients have a discount (really a value-add!) on my rate increase. And any new clients will see the new rates fully.
YOU are Worth It.
No matter how much advance notice you give, how predictable you are, or how gentle you are with your increase, you may get pushback from your clients. This is normal, and you should be thankful actually. They are willing to communicate to you about their considerations rather than just dropping you as a vendor. While it may be tempting to cave into a client's demands right off the bat, step back and take a look at the situation. Look at their company, is their business growing or are they struggling? Do you have an established relationship where you could negotiate successfully? Remember, there is always a possibility that you are going to lose some clients through this process. Sometimes companies just aren’t willing - or are able - to budge on price no matter how justified it is. In these situations, remind yourself of this; You are valuable. Your work is valuable. You can find new clients that are willing to pay you what you are worth.
Remember, your goal is to grow your business. Whether you win new customers or not, you want to be as profitable as possible during your work hours. Raising your rates allows you to be paid your worth and be more efficient and more effective in your business. Lastly, think about what it says about you and the service you provide if your rates are higher. Sometimes we can get in our own way. We have to value our own unique offerings. Having a strong sense of self-worth is reflected by how you price your services, and it subconsciously shifts your buyer into the belief that you are worth that price as well. So, go out there and be a BOSS - and the best business owner you can be!
Much love and Keep on rockin' your biz.
XOXO,
About the Author: Anne Ganguzza is a full-time voice talent and award-winning director and producer who works with students to develop their voice over and business skills - including VO demo training and production. She specializes in Conversational Commercial and Narration styles, including Corporate, E-Learning, Technology, Healthcare - Medical, Telephony, and On-Hold. Located in Orange County, CA, Anne offers private coaching and mentoring services to students in person and via Skype, ipDTL or Zoom.