When it's Best to LOWER Your Rate with an Ongoing Client

Is there ever a time when you should lower your rate with an ongoing client? 

Yes, and I’ll explain when and why.

Most of the time we talk about when to raise your rates with clients and how to do that. But we often avoid the subject of lowering your rates because who would ever want to do that?! Why would you lower your rates? 

Although it seems counterintuitive, there are times when lowering your rates can mean all the difference in establishing deeper trust with a client that can lead to referrals and great reviews. 

The easiest way to explain when you should lower your rates is to tell you a story of when I’ve done it and why. It’s important to note that although I’ve lowered my rates a few times with clients, the lower price always came with an adjustment in my services. 

Let’s discuss a recent example of a situation where I lowered my price. 

I had a client who I was working with for almost a year. I was managing their YouTube channel strategy, optimizing videos and helping them to grow an audience on YouTube. 

At first they were releasing 1-2 videos per week and I was charging a $200/week management fee on top of a $75 video optimization fee. 

The management fee basically covered the time I was working on their account each week which averaged around 1-2 hours. Essentially I was getting approximately $150/hour, which is my standard consulting fee, while the $75 covered my team’s time in helping to optimize the videos. 

After a while, this client’s team started to take over more of the optimization process, and ended up writing the video descriptions which took some work off our plate. They offered to write the descriptions without asking for a lower price, but after a few weeks of them handling that part of the video optimization, I was feeling that what I was charging wasn’t matching what I was delivering. 

Even though the client was fine paying $75 per video, I knew the value I was providing didn’t match that, and I can’t tell you how to know except to pay attention to your feelings on it. 

Some of the reasons I felt that way were very obvious though, because we simply weren’t spending as much time optimizing a video. Yes, we were still editing the description to make it more SEO friendly, but that takes less time than writing it from scratch. 

So a few weeks into this, the client started probing, asking how much time it took to optimize each video. They saw that I had logged an hour on Upwork and were thinking that meant that I spent a full hour optimizing a video, but I was actually charging a flat rate while using an hourly contract. (I use hourly contracts for my flat rate projects because it’s more flexible than Upwork’s per-project contract.) 

So part of the confusion was me not explaining clearly to the client how I was billing. 

I should have explained that even though it was a flat rate I was logging “time” in Upwork to bill the flat rate, and that I didn’t actually spend an hour. Each video was taking me more like 20 minutes,  but then each video published also adds onto the time spent managing the channel.

Anyways, they weren’t asking for me to lower my cost, it was more that they were probing for an explanation in how much time it took me to do certain things. When you’re charging a flat rate, that really doesn’t matter since the client is paying for the project and that project has a certain value that they’re paying for rather than the time it took. 

But when a client is probing for how long something is taking and questioning the billing, that’s a good signal that they are feeling what you’re charging isn’t adding up to the value provided. 

So I took the hint and I offered to lower the video optimization fee to $25 instead of $75, which still kept me in the green because I wasn’t writing the video descriptions from scratch.

They responded with gratitude to that change, and you could tell the energy shifted back to an equilibrium where they felt that they were getting the value they’re paying for. 

Then a couple months later with that same client, another opportunity came up for me to lower my rate. 

This time, there was no probing from the client whatsoever. No complaining, no questioning the billing, but this time I was more in tune to get ahead on the adjustment before it became conscious enough to them to bring it up. 

With this change, they hadn’t been consistently posting videos every week for a couple months like they were at the beginning and so charging a weekly management fee started to make less sense because without posting new videos, there was less to manage. 

Yes, we agreed in our contract that the fee would be charged whether they posted videos or not. 

I set it up that way because some of that weekly fee went into paying me to do some monthly things like reports. I felt I was providing results since their channel was growing by 20-30 subscribers per day. When I first took over the channel, they weren’t getting any new subscribers, so that was a good sign that what I was doing was working. Despite that, they still haven’t grown big enough to monetize the channel, so it makes it harder to keep paying that weekly fee when they aren’t getting money back yet.  

Since I had another client that had recently closed our contract because they didn’t feel like they were getting value from that weekly management fee, it was already on my mind that I needed to rework the management fee with clients who had smaller channels that weren’t posting videos as often. 

So I proposed to the client to drop the management fee and instead raise the video optimization fee slightly to $45 instead of $25 

I then added a monthly fee of $400 for doing the monthly reports and audits. So this way each fee was attached to a very specific deliverable which I’ve learned makes the client much more at peace about it when they have smaller channels and less ROI. 

They know that they are paying $45 to have a video optimized and boosted with YouTube ads. They know that they are paying $400 once per month for me to go in and audit the channel, create a report with recommendations and provide that strategy consulting. 

So when I did away with the weekly fee, it dropped what they were investing monthly in my services from $900 to $500. 

That’s almost cut in half, but I also lowered the expected deliverables to make it a win for me as well. 

I told them that if we do this, I will no longer be available for quick responses Monday-Friday, since the $200/week fee also was a bit of a retainer fee where they could get daily and weekly support from me regarding their channel. 

Without that fee, they no longer get the daily support, but we both feel that they don’t really need that right now given where their channel is at and how frequently they post new videos, which is only 1-2 times per month. 

So in this second scenario, I didn’t just drop my rates to bribe the client to keep me around, I adjusted the deliverables to better match what they actually need. 

I also reduced the potential time I’ll be investing in their channel each week. I’m no longer an on-demand consultant for their channel, but I’m available to them once per month for consulting instead. Of course, I still keep posting their videos during the month as well, but the time investment of consulting drops in this new arrangement. 

So hopefully my experience has helped you understand when you might want to lower your rates with a client.

Overall, if you can get ahead of the client on suggesting the change in rates, you’ll win them over as a long term client and increase your chances in getting referrals from them. 

By being the first to mention it, they now see you as very honest and value-focused and willing to only charge what you’re worth. Too many freelancers wait until the client complains enough or even asks for a lower price before changing the contract, but being the first to mention it can be a really good move. 

Again, this isn’t about you undercutting the value of your services. I changed my deliverables so that I was still getting paid what I thought my services were worth. And when the situation changed and the client took on more of the work, I adjusted my rates to reflect the value I was providing. 

Even if it means lowering my rates because I realize I’m overcharging after the task changes, I try to price my services according to the value my clients are getting. 

At the end of the day, pricing is extremely relative. If a client feels they are getting their money’s worth and they’re paying you $100 for 15 minutes of work, don’t feel guilty about that. 

Some tasks are worth more. Your expertise is worth something. For that client to do the same task, it could have taken them 2 hours. But what I am pointing out is that it can be a trap sometimes because you’re thinking, “Well the client isn’t complaining so they must feel they are getting their money’s worth so I’ll trust them on that.” 

Now I’ve learned that sometimes the client just silently feels like they are being over-charged but they aren’t totally sure so they just slowly build up resentment without saying anything. That’s why you have to be on top of it and be the first one to adjust pricing when it’s needed. 

I’ve had times where the client beat me to it and it didn’t feel great, but I’m working to beat the client to it more often because it’s a much better experience for them, and it will keep your clients around longer. 

Give it a try next time you’re feeling that the client is getting uncomfortable with what they’re investing in you. 

Now, there are other factors that could play a part, like maybe you’re just not reporting your results or tasks well enough so they don’t think you’re doing much for what they’re paying you, or you haven’t explained to them well enough what metrics you’re defining as ROI. 

They might be thinking that increasing subscribers are what you’re supposed to be delivering to them but in reality they’re at the stage where increasing views are more important for growth than new subscribers. 

So get on the same page with them on what metrics you’re using at any given time to measure the results of what you’re doing. And I’m sure there are other aspects here we can cover but that’s it for now. Check out the rest of the blog for more content like this and be sure to let me know of topics you want me to cover.