It seems like there is no such thing as an easy topic when it comes to the business of editing. In reviewing past articles, it seems I have called nearly every topic a difficult topic for editors. And here I go again. The issues of whether, when, and how/how much to raise prices are three more difficult issues with which an editor has to grapple.
Whether to raise one’s prices depends on a lot of factors. Who are your clients; what types of documents you edit; what services you provide; whether quantity of work is more important to you than receiving what you consider fair or adequate compensation; what both your direct and indirect competitors charge; how easily a client can move the work to a lower-priced editor; and myriad other considerations.
Each editor is different. For example, I prefer to have every day of the year loaded with work — enough to keep myself and several other editors busy – and so am willing to accept a price that is lower than I think my work is worth. Some colleagues with whom I have discussed this topic prefer to have less work, even with not knowing how much down time they will have, but receive higher compensation. Where you fit in this scheme, only you can decide, as there is no single correct answer.
However, regardless of where your preferences fit, you must be aware of market conditions and what your competition is charging. I know that there is a school of thought that says we need to move away from thinking in terms of hourly pay (with which I agree) and instead think in terms of the value we add to a product (with which I agree philosophically but recognize the impracticability of in real-world editing). The oft-used example is web design, where the designer, when asked by the client what the price will be, replies with her own question, “Why do you want your website redesigned?” The client responds that the redesign will generate $100,000 of new business, so the designer says, “Isn’t it worth spending $20,000 to earn $100,000?” Needless to say, the client agrees, the designer charges what she values her work to be worth, and all is well. Alas, that doesn’t work for editing.
That is not how negotiations go between editors and clients. Editors cannot identify anything in their work that will increase a client’s sales by a sum certain or a definite quantity. No client says to an editor, “the value of your editing will increase my book’s sales by 50%.” Editing is more invisible than that. Additionally, editing protects the after-sale reputation of the client; it doesn’t generate the initial sales.
So whether we should raise (or lower) our prices depends on a lot of factors that are outside our control but are important to consider. Once that hurdle is overcome, the timing of a price raise must be considered.
Some editors do a general announcement at the first of the year. A new year seems like a logical time to raise prices, especially if your clientele is individual authors rather than companies. If your clients are companies, however, you need to consider timing in several ways: How much lead time is necessary between the announcement and the implementation? Is there a better (or worse) time of the year to raise prices for a company client? Should you even raise current client prices or just use the new pricing for new clients?
When raising prices, I try to keep in mind the client’s fiscal year. I recognize that my clients plan a budget far in advance and that trying to raise prices in the middle of a budget is asking the client to hire someone else. Consequently, if I raise prices, I try to give 6 to 12 months’ notice. I also make it clear that any already scheduled project will not be affected by the price rise. So, at the same time that I announce a price increase, I encourage the client to preschedule as many projects as it can to lock in the old price.
The last piece of the puzzle is the how/how much. Some editors announce a single price increase (e.g. $1 for the year); others announce an overall amount but in increments (e.g., $1 for the year in 25¢ increments every 3 months); and still other editors simply go for small but more often amounts (e.g., 25¢ every 3 months).
One thing that is important to consider in the how/how much contemplation is the percentage the increase represents. This has long been a trick of marketing. To say you will receive a $5 discount is not as effective as saying you will receive a 50% discount, even though that 50% equals $5. Similarly, it looks better and a client may more easily accept a small price increase represented in dollars than the same amount represented as a percentage if the percentage exceeds 5%. In my experience, 5% seems to be the magic percentage. However, what you need to do is make the raise look as minimal as possible; the more minimal it looks, the more palatable it will be to the client.
I am not a fan of incremental raises. Clients rapidly come to think you are nickel-and-diming them. I think it is best to do yearly increases of relatively nominal amounts.
Of course, all this assumes that you are able to raise your prices. Some editors are able to do so, but many editors, myself included in the past couple of years, have been able to only hold steady on our pricing and even have had to lower our pricing. This is a result of competition plus the lack of, in the United States, a true professional organization that separates professional from nonprofessional editors.
Ease of entry and the constant influx of people who claim to be editors has put significant downward pressure on editing prices. Combine this with the globalization of editing and trouble is brewing in raising-prices land. In addition, one’s approach to editing is important.
I, for example, have decided that I would rather be busy and keep other editors busy than raise my prices. I prefer quantity. Consequently, I consciously decided that it is preferable to compete within my sphere than to have idle time, even though I would receive a higher price. (This does not mean, however, that I will accept work at a price that is below what I have determined to be my minimum acceptable price — my pricing floor.) My ultimate earnings would be about the same, but I prefer not to have the idle time. Consequently, to meet my goal of no idle time for myself and additional editors, I had to lower my pricing.
Did I make the smart move? Again, it depends on what you want. But I also look at it like a challenge. This is one of the reasons I created EditTools and keep modifying and adding to it: I needed and wanted to maximize my effective hourly rate while lowering my price so I could keep busy. In other words, I take steps that have the same ultimate effect as raising my price – steps that make the editing go faster, although with increased accuracy, which means my effective hourly rate rises.
Raising prices depends on so many factors that no one can give you one-size-fits-all advice. The most difficult part of the equation is the whether factor. Resolving that question — whether to raise, retain, or lower your price — is the most difficult and the most important consideration; once you resolve that, the when and how/how much will fall into place.