I've been working on a quarterly title with a client with whom I get on very well for the last couple of years. I kept the initial fee reasonably low (not too low, just reasonably low) to get the work, then didn't raise it last year to make sure they stayed with me. But frankly this year I think it should go up. Just wondering how other people deal with the problem - I don't want to scare them off - and how much would be a fair percentage raise. I should add that they are a charity, but a pretty big wealthy one...

If your client's as wealthy as you say, I don't think they can possibly complain about an inflationary increase.

But increasing your rate above inflation is harder. If you're still doing basically the same job as you did two years ago, they might not be too keen about a price increase. But if you've added serious value to their organisation over the last two years, you ought to make your case.

I think it depends on your approach. If you have a good relationship and know that they rate you, be confident and go for it. The worst thing you can do is be shy about asking.

It also depends how easy it would be for them to find someone else to do your job. I imagine that finding another designer would be inconvenient for them. But not impossible of course!

I think if you go in at a low price, to get the work and because the client is a charity, you may find it difficult to raise the price if there are other people around who are prepared to work at a low price. I think few designers are charging inflationery increases – anyone out there able to do this? But you have built a good relationship with your client presumably.

I'd start by researching the market and see if you can find out whether you are undercharging or not for this kind of work. If you discover you are billing below the market rate, ask for more.

Then look at the benefits of using you. Do you make their job easier by taking work off their hands? Do you do such a brilliant job they are unlikely to someone else as reliable/creative/nice to work with etc. If they see the value in using you they may be prepared to pay more. Discuss this with them.

Keeping a price low requires mutual respect. Sometimes there are genuine reasons to charge more, like the client is asking you to do extra work. Don't include it in your price, itemise it, cost it and agree an increase before you say yes. Whatever you do, don't charge more after doing the work.

I'd be interested on how 'you research the market' to get an idea of what is a fair fee... are there any league tables of fees for type of project/size of design group. Do we all need to be more open with each other about billing? I heard the other day that a 'famous' design company marks up print by 120%.... do their clients know this? How can they be happy with this? Do designers make more money from mark up than by billing fees...? I'm all for a level playing field, I think we should try and agree a 'norm' for fees... because nobody seems to be able to put a price on creatiuvity so what else can we base fees on?
I know I've gone off the point, so back to increasing fees... obviously its about your relationship with them but from my experience I think minimum you can get is inflation. On top of that I would outline clearly, if you haven't already done so, a clear list of what you will do for the money and how you will charge for 'extras'... I have a consultancy arrangement with a client and that's how we do it and it's quite successful. I also outline projects that are outside the scope of the consultancy and we estimate and invoice seperately for them.

Alex, you are experiencing a dilemma most small design businesses have. We've been in this position, off and on, for the best part of twenty years. It's right to say you should research your market but at the end of the day it's a question of balance. How much do you need the work. My guess is (like us) you really need all that's on offer, provided there's a reasonable fee. We have such a wide range of clients that our fees are as diverse as £40 - £100 an hour so it makes an across the board price hike really difficult. Sometimes we 'dump' low paying clients because of time constraints, only to find a month or two down the line we could do with them when work goes quiet.
I think Pippa is dead right, we are after all, in the business of communication and building up a good rapport with your clients is vital. Be honest and tell them why to need to (reasonably) raise your fee. You don't need to harp on about 'going in low to get the work', they're not mugs and will know when they are getting a good price. Let them know how much you can offer in terms of experience. If they value you, they will understand and want to help (keep you). Percentage-wise you need to go on your gut feeling. If you made a good decision on the original pitch price I'll bet you could get the next one right.

Well, just to let you know what happened... We had a very honest conversation about what I offered the charity. In the nicest possible way I pointed out what they get on top of what we've agreed (you know, all those little bits and bobs that are hard to really pin down but in the end add up to quite a lot of work) and said politely but firmly that I felt an increase would be fair. I suggested a figure (which was well above inflation) and they agreed straightaway (damn, knew I should have asked for more) but locking me into it for two years, which seems fair enough. Everybody left the meeting happy. Coming up will be a similar negotiation with rather more commercial clients...

That's great news and a happy outcome - well done. Goes to show if you don't ask.... plus it means you have that particular client for at least 2 more years which adds value to your company too. Result.