Rate hikes

[permanent hearing damage]

how much work do you anticipate losing on rate hikes?

i've been pondering this for a good long while. my rates are pretty low for what i have and my level of experience (i'd like to think) and i get a good amount of work i'm sure because of it.

ideally, i would hold out on the rate increase until my schedule was filled consistently but since my last rate change i have 1)moved from 16 track 1" to 24 track 2" and a full digital setup 2)moved the space out of the basement and into a massive warehouse space 3) moded and upgraded my console and 4) bought a ton of nice new mics and added a couple chandler germaniums to my aresenal as well as some other outboard stuff.

also, my rate hike is basically doing away with the hourly rate and just making my day rate what i charge for 12 hrs (on the rare occasion that i actually charge for the time they actually use instead of cutting them a break). the only other option i am offering is a 4 hour block for 1/2 of day rate.

[MoreSpaceEcho]

1,2,3 and 4 certainly justify a rate increase IMO.

[cgarges]

We put in a new console last summer and increased our rate. We'd been very busy for some time, so we felt like all the right reasons were in place. With the economy like it is, I'm still surprisingly busy, but it's tougher to say what effect the rate increase has had on our business. It certainly puts us in the top of the rate bracket of the "middle range" kind of studio for our area (partially because of the influx of more expensively-priced "budget rooms"), but there are much more expensive places with bigger rooms and more expensive consoles around here and they're hanging in there.

I can tell you for sure that once I tell people who call to ask what our rate is, I'm getting a lot less additional questions from mumbly people or people who say, "uh," a lot. But the people like what they've heard from our place or dig our website or whatever don't seem to think our rate is unreasonable. So, basically, the rate increase has reduced the amount of time I spend talking to people who seem to have major PITA potential.

I did keep the old rate the same through the end of the year for our continuing or returning clients and people have appreciated that. We'll see how things go the next few months.

Chris Garges
Charlotte, NC

[JWL]

I've always thought the rate thing was pretty straightforward: if you are constantly busy, booked out weeks.months in advance, then your rates are probably too low.

If you raise your rates, and business falls off, then your new rates are too high.

[DrummerMan]

I think it also depends where on the scale your rates are now. In my old studio, when I raised the prices from low/cheap (which I thought would attract more clients) to more around the average prices for studios of that size (which was still less than many other studios around, but not dirt cheap, or "bargain" anymore), I actually got more and better, less-whiney, clients.

I think if your rates tell potential clients that the advantage to going with you is saving money, then that's what it'll always be about, which sucks, IMO. You can always do like Chris said and keep the rates low for old clients throughout the end of the year or something, but, assuming that your work stands up for itself, of course, you'll probably get taken more seriously if it seems to others that you take yourself more seriously.

[gradwellhouse]

My partner and I had many long discussions about this and here is how our rate increase and results went:

We were a moderately equipped and large spaced commercial spot in suburban south jersey charging $25/hr....after about 2 years at that rate (our 6th year at that point) we decided it was time to up the rate, we were constantly busy (10-16 hours a day almost 7 days a week) so now we needed to figure out a fair and appropriate rate. We decided on $40/hr, why? Well we didnt wanna go to say $35 and then in a year or 2 goto 40 so that was that angle and we didnt want to go $50 and end up backing off because it was too high so there it is.

So after we finished off about 6 months of offering the old rate for advance booking we saw how thinks were going to go. We "lost" about 50% of our hours but gained 40% more $ for each hour so that almost evened out.....the big bonus was that people stopped coming to our studio as their 1st stop in recording land and recorded with friends or cheaper studios to break their cherry. We lose the $ but also lose the insane headache that those sessions can be and lets face it, bad bands almost never refer good bands, that reference ladder usually goes down or laterally, not up.

I think we made a great move and 4 years later we really changed the perception of our studio from a demo studio to a "project"/"album" studio...whatever that means.

Also keep in mind that new gear is great but most of the justification we used for the increase was based on our improved skills/experience as engineers because really your brain and ears determine how stuff sounds right?


Steve
http://gradwellhouse.com

[@?,*???&?]

I can tell you for sure that once I tell people who call to ask what our rate is, I'm getting a lot less additional questions from mumbly people or people who say, "uh," a lot.

Ah, the threshold of professionalism!

lol

[Dave Stanley]

Hey Gradwellhouse, just an FYI my Avast Antivirus popped up an alert and didn't let me go you your site. It was reporting it has a virus: JS:Redirector-G [Trj]

Maybe it's a false positive? I dunno but thought you ought to know....Cheers!

[Shane Michael Rose]

here is my story with rate increases.

when I owned my own studio, for 2 1/2 years, I was certainly the best bargain in town, which is often a terrible place to be, if you have any hopes of moving beyond the best bargain in town. I raised my rates every 6 to 8 months and most of my decent clients followed.

When I went freelance, I kept my rates pretty low, $20 an hour to start with. I was barely getting by with that, but my past clients didn't feel a hit, which at least kept me afloat through some longer projects that I was working on.

I have since raised my rates twice, now charging $30 an hour, which no one has batted an eye at.

Although I am currently having some issues with clients whining about rates, it is from people who booked when I was much cheaper, and they are compaining about supposed "economic" situations. In reality, I have found out that this is more about people skeezing for a deal. I say... raise your rates but up your game. It is not about the gear but about how many people recognize your name on the back of the record sleeve.

[audiogeek1]

The few times I have raised my rates have been because my workload is getting crazy. I have lost 25% of clients the times I do. These clients are the ones that had trouble paying anyway. So it is a weeding out process. I generally use the gear as the reason for the increase. But mainly it is a way to get work back to normal. I usually will only do it if I have been working for 6 or 8 months wishing there were 2 of me.

In 22 years at this it has happened about 6 times.

Mike