My farrier came out to trim my horse's hooves yesterday, and afterward — as per his usual — he proceeded to talk my ear off.
Interestingly, one thing he talked about was rates. Since that has been a commonly discussed topic on Lori Widmer's blog lately, I decided his point of view had relevance for writers, too.
I've been using my farrier for over a year, and in that time he has not raised his rates once. Now at $40 a trim (which takes about 15 minutes on my horse) his prices are in no way bargain basement, but they were average when I started using him. The thing is, many other farriers raised their prices as the cost of gas went up — so while he wasn't necessarily cheap, his customers sure appreciated being able to count on his prices staying the same.
Now he's reaping the rewards of not raising his prices when everyone else did. Not only has he kept most of his customers, but he's also getting calls from new customers who want to switch farriers. Meanwhile, the other farriers aren't getting calls almost at all.
Now, I'm not advocating lowering your prices to lure clients away from other writers — my feeling is that in the end, you'll get only enough extra work to make the same amount of money you were before, with less work. However, I think this example shows how important client perception is. While my farrier's rates were not and are not cheap, his clients feel they are getting a bargain when he doesn't raise his rates.
So how does this translate into writing rates? Well, for one thing I'm thinking of holding off on raising my rates this spring. I can handle where they are at right now, so perhaps a raise isn't as valuable as being known as the writer who was willing to work with her clients during tough times.