One of the most paralyzing questions freelancers face is this: “How do I raise my rates without losing all my clients?” It’s a fear that keeps many talented professionals stuck at unsustainable pricing levels, afraid to step into their true worth.
Recently, Cameron reached out with exactly this dilemma. Not only was he concerned about increasing his rates, but he also wondered how to build a foundation now that would support his transition to running a small agency later. His question reveals a common misconception about client relationships and pricing that holds many freelancers back.
Key Takeaways from this Episode:
- Your clients have motivations beyond just saving money—they value problem-solving speed, long-term thinking, and avoiding the inconvenience of replacing good freelancers.
- Shift from hourly billing to flat fees as soon as you can predict project timelines, and eventually graduate to true value-based pricing that focuses on outcomes rather than time.
- Higher prices often earn more respect from clients and position you as an authority, reducing pushback and allowing you to lead projects more effectively.
The Fear Behind the Question
When freelancers worry about raising rates, there’s often an underlying assumption: that their clients are purely motivated by finding the lowest possible price. This thinking suggests that the moment you’re no longer the cheapest option, clients will abandon you for someone willing to work for less.
But this assumption oversimplifies how clients actually make decisions. Austin Church, founder of the Freelance Cake community and author of “Free Money,” points out that most clients have multiple motivations when hiring freelancers.
Consider your own purchasing decisions. When Austin needed emergency plumbing repairs, price wasn’t his primary concern—he wanted the problem solved immediately. When he and his wife were shopping for a new stove, they consciously decided to prioritize long-term value over short-term savings, choosing to invest in the appliance they really wanted for the next decade.
Your clients operate with similar complexity. They’re not just looking for the cheapest option—they’re solving problems, making investments, and seeking reliable partners.
The Hidden Value of Consistency
One factor freelancers consistently underestimate is how inconvenient it would be for clients to replace them. If you’re good at what you do, dependable, and deliver quality work, you’ve built something valuable: a working relationship.
Think about it from a corporate perspective. When an employee asks for a raise, it’s almost always cheaper for the company to grant the increase than to go through the process of hiring, onboarding, and training a replacement. The same principle applies to freelance relationships.
Your existing clients already know:
- Your work quality and style
- Your communication preferences
- Your reliability and deadlines
- Your understanding of their business
Replacing you means starting from scratch with an unknown quantity. That’s a risk many clients would prefer to avoid, especially when the alternative is simply paying your new, higher rate.
Moving Beyond Hourly Pricing
One detail from Cameron’s question reveals an important opportunity: he’s currently charging by the hour. While hourly pricing makes sense for newer freelancers who don’t yet know how long projects take, it becomes a limiting factor as you develop expertise.
Hourly pricing creates a problematic incentive structure. The faster and more efficient you become at your work, the less money you make. You’re literally being penalized for developing expertise and improving your processes.
The first step beyond hourly pricing is moving to flat fees. Once you can reasonably predict how long different types of projects will take, flat-rate pricing rewards your efficiency. If a project that used to take you eight hours now takes six, your effective hourly rate increases automatically.
But even flat-rate pricing often remains anchored to time-based thinking. The ultimate goal is value-based pricing—charging based on the outcomes you deliver rather than the time you invest.
True Value-Based Pricing
Austin shared a perfect example of value-based thinking when someone asked about the ROI of fresh branding. His response: “What’s the ROI of a good reputation?”
Some benefits simply can’t be quantified in traditional financial terms, yet they’re incredibly valuable. A professional brand image, a reputation for reliability, peace of mind knowing problems will be solved quickly—these outcomes transcend hourly calculations.
When you can help clients think about value in these terms, pricing becomes less about what your time costs and more about what your solutions are worth to their business.
The Psychology of Premium Pricing
Here’s something many freelancers don’t expect: clients often show more respect for expensive services. Austin has found that he actually gets less pushback when charging higher prices.
When clients pay premium rates, they’re more likely to:
- Trust your expertise and recommendations
- Let you lead projects without micromanaging
- Respect your creative decisions
- View you as the authority rather than trying to direct every detail
This shift in client behavior isn’t just about the money—it’s about positioning. Higher prices signal expertise, exclusivity, and quality. They position you as an authority in your field rather than a commodity provider.
Building Your Agency Foundation
For freelancers like Cameron who are thinking about eventually building an agency, this pricing psychology becomes even more important. Agencies typically work with clients who understand the value of professional services and are willing to invest accordingly.
If your current client base is primarily motivated by low prices, you’ll struggle to transition to an agency model. The clients who see you as a commodity provider won’t easily accept agency-level pricing and service models.
Start now by:
- Positioning yourself as a specialist rather than a generalist
- Focusing on the expensive problems you solve, not just the services you provide
- Attracting clients who view professional services as investments, not expenses
- Building relationships based on value delivery rather than cost savings
Making the Transition
The path from fearful freelancer to confident agency owner isn’t just about raising prices—it’s about fundamentally shifting how you think about your value proposition.
Stop thinking about yourself as someone who trades time for money. Start thinking about yourself as someone who solves problems, delivers outcomes, and provides strategic value to businesses.
Your pricing should reflect this shift. Whether you’re moving from hourly to flat-rate pricing, or from cost-plus to value-based pricing, each transition should be anchored in a deeper understanding of the value you provide.
Remember: clients who are only motivated by low prices probably aren’t the foundation you want for building a sustainable agency anyway. The transition starts with attracting and serving the right kinds of clients—those who understand that quality professional services are investments, not expenses.
The fear of losing clients when you raise rates is natural, but it’s often based on assumptions that don’t reflect how clients actually make decisions. By understanding client psychology, positioning yourself as an authority, and pricing based on value rather than time, you can build the foundation for both immediate success and long-term agency growth.
Episode Transcript
This transcript was generated automatically and may contain errors.
Preston (00:51.92) Hello and welcome to another episode of Freelance to Founder, where we help you start freelancing, grow your agency, and live the work life you’ve always wanted. You can send in your questions at freelancetofounder.com slash ask. I’m Preston Lee and I started freelancing in college. From there, I’ve built, grown, or sold a few businesses. And together with my co-hosts, I’m ready to help you do the same. If you’re ready to grow your service-based business into something bigger, if you’re ready to become a founder, this show is for you. We’re here answering your questions every single weekday now. And today I’m joined by my friend Austin Church. He’s the founder of the freelance cake community and he’s an author of the book, Free Money. Austin, welcome to the show, man. Austin L. Church (01:35.384) Thanks so much for having me, I’m delighted to be here, Preston. Preston (01:38.414) So excited to have you. Longtime listeners will recognize your voice, your name. We’ve had you on the show before, but give us a quick update just on the freelance cake community and your book, Free Money. Austin L. Church (01:48.288) Sure. So I’ve been freelancing for about 16 years now and eventually realized, Hey, I want to organize. want to connect advanced freelancers with each other with resources, with advice. So that’s what I do in the freelance kit community. And then the book free money is a pricing and money mindset guide. So it’s for folks who know they need to price more strategically, more sustainably to make. progress toward their long-term financial goals. So I laid out the process and people have appreciated that. Preston (02:26.65) I love that today’s question actually is gonna have to do with pricing. So I think that’ll fit right in with some of the stuff in your book. I’ve read your book. I highly recommend it. We’ll leave links both to the freelance cake community and to Austin’s book in the show notes of this episode or in the description of this episode. So you can be sure to click through and check that out. Today’s question comes from Cameron. I’m gonna give it a quick read. So Cameron submitted a question at freelancetofounder.com slash ask you can do the same. Cameron says, how can I effectively increase my rates without risking my client relationships? Given that I’d like to grow into a small agency model in the future, how do you advise I build a foundation for that transition now while I’m still freelancing? So we’re gonna answer Cameron’s question in this episode, in today’s episode, right after a quick word from our sponsors. We will be right back. Preston (03:23.236) All right, I am back. My name is Preston Lee. I’m here with my friend Austin Church, and this is Freelance to Founder. We are answering Cameron’s question today. So you heard before the break, Cameron has a question about pricing. Austin, what strikes you about this question? He’s asking, how do I increase my rates without killing off those client relationships? And how do I set myself up for the future to be an agency? I think maybe we tackle the first piece of the question, like how do I increase my rates without scaring my clients? And then maybe we can talk a little bit about. The second part of the question, is like, what do need to do now so that I can price like an agency down the road? What do think? Austin L. Church (03:58.136) Sure. So because I don’t know Cameron, I can say whatever I want, just kidding. But it does strike me that the framing of the question seems to have a little fear around the edges. Meaning if I do raise my rates, then I’m going to negatively affect my clients or maybe even lose some clients. And though there’s always the risk that one of your clients or one or more may not be willing to pay higher prices. I think that way of thinking is also very, it oversimplifies our clients motivations because most of our clients and I’ll put myself in with our clients because I’m often the one hiring freelancers now. And so even if I look at my own tendencies, it’s not just to always save money. I have other motivations. And so when Cameron is thinking about raising his prices, if all he’s thinking about is, my clients are only ever motivated to pay the lowest possible price. And as soon as I’m not, you know, I don’t represent a low price, they’re all going to leave. I think that’s a false assumption. And if it is a false, if it is a real assumption and you’re wanting to build an agency, Preston (05:17.615) Hmm. Hmm. Austin L. Church (05:24.844) I just don’t think you can build a long-term, viable, sustainable business with very price-sensitive clients. Meaning, if you are wanting to grow into an agency, you need clients for whom saving money is not always their most powerful motivator. So. Preston (05:47.534) Yeah, that’s so well said. If you’re only working for clients who just are always looking for the bottom dollar deal, then not only does that say about you that you feel like, well, you’re just a commodity, you just take the lowest price, but it also is an interesting look into who your clients might be, right? Do they have the confidence in their own business to say, if I invest in this thing, Austin L. Church (06:09.422) Mm-hmm. Preston (06:15.649) it’s going to be worth it in my business as opposed to I’m just gonna do the cheapest thing possible and hope and cross my fingers and hope that it works. that’s, those aren’t necessarily the long-term kind of clients that you want anyway if you’re looking to build an agency. And so I agree, you know, this idea of valuing yourself, it’s really hard for a lot of freelancers. There’s a lot of imposter syndrome happening and there’s a lot of saying like, yeah, my clients are with me because I’m the cheapest because they, you know, Austin L. Church (06:27.81) Mm-hmm. Austin L. Church (06:35.713) It is. Preston (06:43.427) went to Upwork and they looked at a hundred different profiles or a thousand different profiles and I was the right price with the right resume or whatever. so I think marketplaces have done that a little bit, commoditized freelance work, not a little bit, a lot. And so it does make it challenging to remind yourself or to remember price isn’t everything. If you have current clients that are working with you that are happy, that have had results, and even especially if they’ve been working with you for a long time, Austin L. Church (06:57.592) Mm-hmm. Preston (07:09.967) they probably care about more than just how much you’re costing them. Austin L. Church (07:13.74) That’s totally true. I want to point out a couple things. Number one, two of my recent purchases, one stove for our house and two repair at a building that we own, a plumbing repair. Now with the plumbing, I wanted it done ASAP and they got there and they repaired it and I would have paid them whatever they asked. My motivation was to solve the problem as quickly as possible. Preston (07:41.837) Right, yeah. Austin L. Church (07:43.22) So sometimes with your clients, if you’re solving problems for them quickly, you’re removing a headache. You’re making a painful, expensive problem disappear. Like if you are metaphorically plugging a leak that could cause like catastrophic damage, if it’s left unchecked. Well, there’s a lot of value and you can charge a premium for that. With the stove. When the first stove that we just got secondhand didn’t work out and we knew that we were going to have to pay out of pocket for a brand new stove, had a conversation with my wife and she said, I think we need to change how we’re making this decision. Instead of trying to save money, I think we need to make a long-term decision. What is the stove we really want? Why wouldn’t we pay, you know, 50 % more and get the one we really want that we want to have for the next 10 years. And so if we take the long view, then we make a different decision. So we will have clients that are in both camps. They’re not just trying to save money. They’re trying to get rid of a problem or they’re not just trying to save money. They’re actually trying to make a long-term decision, a long-term investment. And so to your point, Preston, if Cameron doesn’t have those clients, then the pricing problem or challenge or opportunity is actually different than the sort of positioning opportunity. Because if you are not currently attracting the clients that have more multifaceted motivation, other than just saving money, go get those clients, figure out where they are, figure out what their problems are, position yourself. as an authority on solving their expensive problems. And then I won’t say that you can charge whatever you want. I will say that the sort of price spectrum is much wider and much higher. If you become that recognized authority in a very specific niche, solving problems for a specific group of people for whom saving money isn’t always the most powerful motivation. So. Preston (10:03.309) Yeah, yeah. Austin L. Church (10:04.236) Also, I’ll just throw in like, you’re probably underestimating. And this is the second thing I’ll say, and then I’ll shut up. You’re probably underestimating how inconvenient it is for your clients to replace you. If you’re good at what you do, if you’re dependable, if your prices are reasonable, then when you raise your prices, you You have to recognize that forcing your clients to replace you is actually very inconvenient for them, and they may not like the higher price, but that will just become the new normal. And many of them will stick with you simply because it is inconvenient to replace you. Preston (10:37.765) Mm-hmm. Preston (10:49.141) Yes, well said I was actually gonna bring that up as well this comes back to my days I you know I did some work in corporate America before I ran my own business and this was always drilled into your head like You know if you’re gonna go ask your boss for a raise It’s gonna be way cheaper for that company to give you a raise then then to find a replacement right not only cheaper But just way easier a lot, you know a lot less question marks in their mind when you’re working with a client that likes you Austin L. Church (11:07.65) Mm-hmm. Preston (11:15.759) They already know that they like to work with you. They know that you’re dependable. They know you get the job done. They know your caliber of work. And so there’s all these unknowns to hiring someone else. So you have to remember that like you’ve built a relationship, you’ve proven your worth and yeah, like you said, it’s a lot scarier for a client to go with an unknown than to just pay a little bit more. Now, Austin L. Church (11:21.473) Mm-hmm. Preston (11:39.458) You know, one thing that’s really been interesting is I’ve been digging through Cameron’s question a bit more. was a little bit long, so I couldn’t include all the details, but I’m noticing also that Cameron charges by the hour. So I’m curious, Austin, what your thoughts are on value-based pricing versus hourly pricing in this kind of scenario where they’re saying, you know, I’m scared to raise my rates, and we’re saying, you have to know your value. To me, sometimes we say know your value and people stick with an hourly value and it’s like, well, Is that really the right approach? don’t know. Do you have any thoughts on that? Austin L. Church (12:11.874) I think charging hourly does make sense for newer freelancers who don’t know how long certain tasks and projects take. So until you have a handle on a realistic time investment for different projects, you reduce risk for yourself by charging hourly instead of by charging a flat fee. That being said, as soon as you can with Preston (12:35.845) Hmm. Mm-hmm. Austin L. Church (12:41.292) reasonable accuracy predict how long certain projects or tasks are going to take. It makes a lot of sense to shift to flat fees because flat fees reward you for your speed, your efficiency, your expertise. If you used to spend eight hours writing a blog post or five hours building out a new web page, but you get more efficient, And now it only takes you six and a half hours to write that same post or three and a half hours to build out that same page. And yet you’re charging a flat fee. Well, now your effective hourly rate has gone up. You’re getting paid more to do the same amount of work. And that is a winning proposition in any business. so unfortunately, a lot of freelancers, consultants, Preston (13:25.028) Mm-hmm. Austin L. Church (13:39.754) agency owners get in this position where they get better and better. They get faster and faster. And yet they’re not actually being rewarded because they’re still charging hourly. So my advice to Cameron would be if you aren’t already track your time like a maniac. So that way the next time that same project comes around, you know about how long it will take. You can charge a flat fee instead of charging hourly. And why wouldn’t you reward yourself for your speed while also having a very satisfied client? Because as long as they get what they pay for, it’s none of their business how long it took you. Preston (14:26.571) Mm-hmm. It’s it’s really interesting. I’m gonna push back just a little bit here if I can Austin. think what you what you said is is completely wise and correct and I think if you’re not if you haven’t gone through the exercise we’ve talked about this Clay and I have talked about this previously on the show which is like if you if you don’t know where you’re spending your time you got to do one of these time audits and just figure out how long do my most common projects take Where am I spending most of my time during the day? You have to do that. You have to know where your time is going Austin L. Church (14:31.288) Go for it. Preston (14:56.921) But I’m going to push back just a little bit because I worry sometimes that freelancers, especially when you’re the whole show, right? When it’s all you, you’re doing all the work, you’re not subcontracting. I worry sometimes that we price based on our time, even when we’re doing flat fees. Because we’ll say like, well, it’s going to be a flat fee, but I’m still, I’m going to accomplish it quicker. And so it’s still going to be a Austin L. Church (15:16.63) charging flat fees. Preston (15:25.645) a higher effective hourly rate, right? And which I think is good. If we’re talking like good, better, best, I think maybe that’s better. If charging hourly is good, maybe that’s better. But I wonder if there’s, I wonder if we can make room for this idea of like, it doesn’t matter how long it takes me. This is the value that it brings to the client. True value based pricing, right? Your oven that you’re purchasing, it doesn’t matter to you how long it took the people to manufacture it. It doesn’t matter. Austin L. Church (15:44.767) Yes. Austin L. Church (15:53.762) Right. Preston (15:55.11) how much the cost of goods were, like the materials that it’s made out of. What you care about is like, I want an oven that’s gonna last me 10 years and it’s gonna, and it’s not gonna break down and it’s gonna fit well and it’s gonna match my other appliances and all these other pieces of it. That’s what you care about. And that’s what you base your value on or the value of the product. And that’s a little different, you know, service versus product. But I just wonder if there’s room for freelancers generally to think more often about like, Yeah, this website is going to take me or let’s take, let’s take you, you do a fair amount of like branding and logo and stuff, don’t you, Austin? And so I wonder if we even take that example because we were talking off the air before we started about, about someone who said, well, what’s the ROI on, on fresh branding anyway. And you said, well, what’s the ROI on, on a good reputation, you know, which I thought was so smart, such a, such a. Austin L. Church (16:30.816) Mm-hmm, I do. Austin L. Church (16:46.902) A good reputation, yeah. Preston (16:52.761) great professional wise comeback. you can’t put really an amount on that. You can’t put a dollar amount on that, right? You can’t say a good reputation is worth a thousand dollars. And so really that opens up, yeah, yeah. Which on the one hand is really hard to then justify your prices, but on the other hand, if you can get them to buy into the idea that, this is valuable. an oven that lasts me 10 years is valuable or having a Austin L. Church (17:08.28) You can’t quantify that. Yeah. Preston (17:21.977) brand that looks professional is valuable, then you can start to assign just value to it in terms of money instead of like hourly value. Austin L. Church (17:31.736) really glad you pushed back because you bring up something which is true in pricing and it doesn’t get talked about all that often. How we price is often based on our level of confidence. And people who know their value, they are very confident in their value, will graduate to value-based pricing eventually. And there’s one other just sort of shading here I want to point out, and that is Preston (17:45.678) Mmm. Austin L. Church (18:02.466) people show more respect to things that are expensive. And I’ve actually found that I get less pushback from clients when I’m charging them higher prices. So even if you’re content with charging hourly and even if you’re content with your effective hourly rate when you charge a flat fee, you may still keep raising your prices because you find it gets you more respect. Preston (18:13.27) Yeah. Austin L. Church (18:31.33) You find that other people see you as the authority, as the expert. They let you lead the brand development project. They don’t push back. They don’t second guess your every decision. They don’t undercut the project by trying to become the creative director, even though that’s your job, because they’re like, well, hey, I’m paying this person a lot of money to tell me what to do. so pricing is Preston (18:45.529) Mm, mm-hmm. Austin L. Church (18:58.914) branding pricing is positioning in the sooner we all arrive at that, including Cameron, sooner we arrive at that realization, the sooner we make smart and strategic business decisions that trickle down to our prices. Preston (19:16.355) I love that. I think we could talk forever as evidenced by your book and other pieces of your work. I think we could talk forever about pricing. I think there’s so much to unpack when it comes to just how much should I charge? How should I charge? It started as like a how much should I charge question. It ended as like, how should I think about charging? And so I think there’s just so many avenues we could go. Unfortunately, we are… Austin L. Church (19:33.006) Mm-hmm. Preston (19:42.487) out of time for today, but good news listeners, Austin is gonna be joining us all week on the podcast here. So we may dive into some of this with your questions later on in the week. If you want your question answered here on the show, just like Cameron, thank you, Cameron. Thank you so much for writing in. We would love to answer your question as well, listener. So you can visit freelancetofounder.com slash ask. We have a really cool new voicemail feature there. You can leave a voicemail or you can leave a written question. We’ll take them all and we would love to answer your question on the air. You can also catch up on past episodes at freelancetofounder.com. That’s where we have a bunch of our former episodes, a bunch of episodes with Clay. We have just a bunch you can listen to there to help you grow your freelance business, help you grow to an agency. So please check that out, freelancetofounder.com. can subscribe obviously wherever you get your podcasts, but thank you so much for listening. And Austin Church, thank you so much for joining us today. Really quickly, I remind people where they can find you and then we’ll sign off. Austin L. Church (20:41.836) Yeah. So you can find me on LinkedIn. You can also get my book free money for free. If you follow the link in the show notes and check out the freelance Kate community for advanced freelancers as well. Thanks Preston. Preston (20:56.577) Excellent. Thanks so much. I’ve been Preston with millo.co. You’re listening to Freelance to Founder. We’ll catch you next time.
