How To Tell A Client You Are Raising Your Rates

A therapist explaining to their client that they're raising their rates.

To keep pace with changes in healthcare and inflation, it’s likely that you will have to change your rates many times over the course of running a private practice. While this is necessary to ensure you’re always offering the best service, informing clients of a price increase can feel awkward.

Clear communication is necessary to ensure everyone is comfortable with the rate change. Learn how to tell a client you’re raising your rates with this guide.

Why You Will Need To Raise Your Rates?

No prices ever stay static, which is something you’re likely to notice every time you fill the car with gas. Private practices and other healthcare services are no different. To keep up with inflation and adapt to changes in the service, you will need to raise your rates.

The thought of raising your rates might feel alarming, but remember that it’s necessary for the health of the business. If you don’t adapt your rates to the market, you won’t be able to provide the best service.

How To Tell A Client You Are Raising Your Rates

Follow these tips to smooth the awkward conversation, and introduce rate changes with less fuss.

Include Potential Rate Changes In The Consent Paperwork

Price changes are a part of any business, and a private practice is a business. At some point, you can expect your rates will need to adjust.

In the initial informed consent paperwork, include a clause stating that you may change your rates in the future. 

Have The Initial Conversation In Person

It’s much easier to send a letter, but the best way to inform a client of a rate change is to tell them in person. Practice what you want to say before the meeting, so you can keep it informative and professional. Explain that you’ll be sending further details through the post/via email. 

Most of your clients are likely to take the news well, even if they need some time to think about their finances. However, you can expect some pushback in places. Before you start informing clients, consider the kind of reactions you expect to receive, and plan for them.

Give Clients Advance Warning

Inform your client several weeks before the rate change, so they can make any inquiries, and adjust their budget. The appropriate time period will depend on just how substantial the rate increase is. However, clients should be informed of even small changes at least 4 weeks before they come into effect.

For larger rate changes, try and give at least 90 days warning. Send follow-up emails as the time for the change gets closer.

Contact Them Directly

Each client on your list should be contacted directly. Don’t just put up a dialogue box on the practice website and hope everyone sees it. Instead, send an email or a physical letter, detailing the reasoning.

Having made initial contact, send follow-up emails/letters in the weeks leading up to the rate change. One or two will be enough (depending on how far in advance you’re sending notice).

Don’t just send a generic message stating that there will be a rate change. Tell each client the exact figures the new rate will be.

Finally, a courtesy call is a good way to reinforce the importance of your relationship, and ensure no one is out of the loop.

Get To The Point

Don’t try to hide the purpose of the conversation. Instead, get to the point immediately. If you drown out the message in too much preamble, the client might end up missing the important details. Then, when the price increase comes, they’ll be caught unawares, and more likely to drop the service.

After the initial greeting, dive right in with the news. Explain all the key details: what the price increase is, what the new rate will be, and when the new rates will be taking effect

With the key information out of the way, you can go into more detail about why, and how it will be happening.

Avoid Over-Explaining

You probably have a folder full of reasons behind the price change, explaining how you reached the exact figure. 

Your client doesn’t need to see this. All they need is a simple explanation to what the rate change is, with perhaps a brief note on the reason why. “To keep pace with the rising costs in healthcare,” is all the reasoning you need.

Over-explaining can complicate matters, and distract from your purpose. It’s also easier to let emotions come to the fore when you’re caught up in explanations.

Resist The Urge To Apologize

No matter how necessary the change is, or how well you can justify the price increase, there’s no avoiding the fact that your decision might have a negative impact on others. It’s only natural to feel compelled to apologize, but you should avoid the temptation.

You know and understand the justification for your rate change, and we’re sure it isn’t a decision you made lightly. This is a business decision, so it’s important not to make it personal with apologies.

The urge to apologize is likely to be stronger during the initial face to face meeting. Practice what you’re going to say beforehand, and consider how to respond to negative reactions.

Reassure The Client Regarding Quality

If you’re expanding your practice or adding new services, a rate increase is often necessary across the board. With more services on offer, operating costs will go up. Explain any new services that you’re offering in your letter or email.

Not only will this help clients understand the need for a price increase, but it can also get them interested in trying an additional service. If there aren’t any new services, simply add a paragraph explaining the rate raise is necessary to maintain the same level of service.

In person, you can take the opportunity to reflect on the work you’ve done with the client.

Offer The Opportunity To Reach Out

A rate change can be stressful for clients, particularly if they’re already struggling financially. You should offer them the opportunity to reach out and discuss any thoughts they might have about the change.

Final Thoughts

It’s likely that at some point you will have to raise your rates. While your clients might not appreciate the news, clear communication can help smooth the change.

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