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A Simple “2 Step” Plan For Increasing Your Rates In Your Virtual Assistant Business

Michelle Dale - Monday, July 25, 2011
Today I’m going to be answering a question related to raising your rates with existing clients, and also how you can introduce a periodic increase for all clients. Before we go into this, I’m going to send you a quick reminder, to take a look at your current rates, and ask yourself if you are happy with them, as it’s always very important for you to make sure that you are displaying and charging your ideal rates.

So onto the question…

“How do you approach increasing your hourly rates with existing long term clients? Expenses such as electricity, internet etc… are increasing and I’ve definitely got a lot more knowledge and experience under my belt now then when I started with some of my clients, not to mention I usually wind up doing a mixture of other pricier services together with “standard” services.”

There are a few things that we can address in this question, and some excellent points were made, so let’s break this down, but first of all, before we do, we need to understand one very significant thing about increasing rates, it’s the reason why everyone is scared to do it in the first place, we can’t ignore it, so we should take it into consideration…

You are not indispensable.

If you want to go ‘Gung Ho’ into raising your rates with the client, no matter how polite you are about it, how you justify it to them, how you are well within your rights, how you approach it, what a great relationship you have with them, and/or how long you have worked with them, you must be able to accept one thing, and that is that you (may) lose them – I am not saying you will, in fact, it’s very likely that you won’t if you have a good relationship with them, and you provide a top notch service, but no matter how well you think you know the client and their business, as a business owner yourself, you will also know that anybody with a business will likely have a budget, especially the small to medium enterprises which virtual assistants in particular tend to work with.

Let’s say, as a random example, you charge them $47 p.h. and you want to increase to $57 p.h., and they hire you 20 hours a week — that hourly increase comes out to an additional $10,400 a year… not easy to swallow. Let’s not be fluffy about this — raising rates for long term existing clients is a calculated risk, even if you are worth every cent of the extra 10.4k a year…

To raise, or not to raise?

As the VA who asked the question pointed out, we cannot deny inflation and generally speaking, a rising cost of living just happens, as well as becoming more skilled and able in our work over time, and we also cannot deny that as this happens (rising inflation/business/living costs) our overall profit on the hourly rate can decrease, which can seriously impact our business and lifestyle. But you also need to be aware that your client is likely in the same situation, and their expenses are also increasing, so it depends entirely on the client and how they operate their business as to whether their budget will allow them to keep you on, it also depends on how much you want to raise your rates by… It sometimes has nothing to do with how much they want to continue working with you or how much they value your virtual assistant services.

So just be aware, in particular, if your increase is quite a jump, e.g. $10, you may potentially part waves with the client. So take care, and make sure this is a calculated risk. I don’t personally raise my rates with long term valued clients if they come under the following 3 criteria:

  1. I actually need their business (and don’t want to run any sort of risk of losing it) and I still make a decent ongoing profit on it (very important).
  2. I love working with them and particularly don’t want to lose them, especially if they are a smaller business or start up who has the real potential to become very successful. Strategically, I like being there from the start.
  3. Working with them provides several other benefits such as regular referrals at my new higher rates, or regularly increasing workload.

My clients vary, some I know could easily afford a price hike, for others, I am sure it would be difficult for them, their finances are not my problem, my finances are my problem, and taking care of my family, but if I value their business, it’s something I need to consider carefully before I go in with my rate guns blazing.

Do keep in mind I have a multi-VA company, I need a steady, consistent flow of clients and work, and I need to meet a minimum quota every month of thousands of dollars in order to maintain the business at this scale and meet my obligations to my team members. It’s different for solo practitioners who work alone directly with all of their clients. But, also note this rate increase plan which I am going to suggest can work in any size company.

So, let’s get down to how you can actually do this, and raise your rates with existing, long term clients. It’s a simple 2 step plan, the first step to cover your own back with regards to inflation which we touched on earlier, so you don’t have to worry about this in the future so much, and the second step to gradually introduce this change to clients where you need to make a more immediate increase.

Step #1 – Plan ahead with a new policy.

The “softly softly” approach…

This option is most likely to be the most favourable to the client, which means it’s the safest way to introduce a rate increase, without running too much of a risk of losing them. You can begin with implementing a new company policy that every year or couple of years you reserve the right to increase your rates by a certain percentage, or an amount e.g. $2, $3, $4, you could base this roughly on inflation, in the sense of the absolute minimum increase, put this clause in your service agreement, then new clients won’t get any surprises in the future. They will know up front that your rates will increase each year or couple of years if you like, by X amount. You could put a cap on this so clients will know the rate won’t go over a certain amount during a fixed period. This way you can simply raise the rate according to the clause in your contract, sending out a reminder 3 months and again 1 month prior to the scheduled increase.


You can put a clause in your service agreement that every year, the clients rate will increase by $2 (as an example), so if they are paying $47 now, next year, the rate will be $49, so on and so forth… Introduce this to new clients as well, if you intend to raise your published rates regularly, e.g. per calendar year.

Important note, the above is just an example to demonstrate this technique. If you decide to base your increase on inflation, you need to make sure your increase is above the rate of inflation whatever country you live in, it varies, but you need to make sure that it is an ‘actual’ rate increase.

Step #2 – Transitioning existing clients.

The “quick style” approach…

You could introduce the policy above and leave it at that, but if you would like to start getting your existing clients onto a higher rate more quickly, depending on your relationship with the clients, you can choose other more rapid increase options such as half yearly or quarterly, depending on how quickly you would like to get them up on your new rate.

Once you have chosen the rate of increase and the timescale you want to transition into that rate for existing clients, you can write to them saying changes have been made to your terms and conditions and request they sign a new service agreement, highlighting the section with your new terms. Beginning to increase their rate ‘gently’ each half year/quarter etc.. until they reach the rate that you want them to be at.


So going back to my earlier rate example, my rate is $57 per hour, I have clients paying $47 per hour, and I want to get them on the $57 per hour rate, I can increment their rate increase by raising it by $5 to $52 for the first 6 months and after those 6 months, they go onto the full rate, at another $5 increase to $57. Ideally I would try and limit the rate of increase as much as possible if I can, so the ones who are doing around 20 hours a week aren’t having a $10.4k cardiac over their morning cornflakes when they open their email first thing…

Of course whatever you charge, and whatever timescale you set to implement the increase all depends on you and your circumstances, but you could use a standard letter to inform clients, something similar to this:

Hi [client name],

I am writing you inform you that there have been some important changes to our standard service agreement.

As you can see from our website, (enter link to rates page) our rates have increased since we began working together. I am sure you can understand we are extremely committed to your success as a client, and we would like to continue to provide the same excellent standards of cutting edge skills and impeccable service levels for your business. In order to do this, a rate increase across the board for existing clients is necessary to bring it in line with our published rates for all new clientèle.

I appreciate that this rate increase could impact your business, and significant consideration has been placed into transitioning our existing clients to this new rate by offering an [annual/half yearly/quarterly] increase option.

Please could you review and sign our new service agreement detailing our new rate increase policy. If you have any questions at all, or if for any reason you’re not in a position to continue under this new agreement, please don’t hesitate to contact me to discuss this further.

I very much appreciate your understanding, and I look forward to continuing to provide you with a first class virtual assistant service.

Best regards,

In all honesty, if they are long term and have settled down nicely into a client area and your relationship is well established, then this will not come as a surprise and I am sure the client will be happy to pay the increase if they are able to. We have discussed living costs and touched on inflation, but skills and ability were also mentioned, which also needs to be taken into consideration when applying rate increases, but whatever you decide to charge for your services, you now have a technique which will allow you to implement these increases with existing clients as and when you feel you need to.

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Hi I'm Michelle, an entrepreneur specialising in virtual assistance, a digital and real world nomad, and a down-to-earth mother of three.

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