Ask HN: Should I raise my rates?

[JimDesigns]

So I’ve been running Jim Designs (https://jimdesigns.co/), my one-person subscription-based design studio for SaaS startups, for a bit more than a year now, going from making my first internet dollar to close to $10k MRR.

I’m getting too much demand these days, and I’m genuinely wondering if I should raise my rates.

The obvious answer is yes, but I know these spikes come in waves, and I'm concerned that if I raise my pricing, it will diminish future demand, and I’d lose a competitive edge.

I’ve been gradually increasing my pricing ever since I started, but I feel like I'm hitting a glass ceiling, although I realize my current rates are quite low for the provided value.

I’d for sure rather have fewer clients willing to pay more, but I see quite some benefits in having lower prices:

- Gets you more clients, thus a bigger reach, and an increased word of mouth potential - Feels more sustainable in the long run as you need a continuous stream of new clients with this model.

I’m not sure if these arguments are legit, or if I’m just trying to justify my lack of confidence here.

The one thing I’d like to avoid is to increase my rates, but then have to revert back in case it doesn't work out well. I'd feel bad for the customers who'd go for a given price point, then later realize prices went down :/

I don’t wanna sound like I’m creating reach man’s problems for myself, but I’m genuinely interested in what the best approach would be here.

Jim

PS: You can follow me on Twitter (https://twitter.com/JimDesignsCo) as I continue to share my journey.

[JohnFen]

I think it depends on what your business goals are.

Do you want to have a one-man business that provides a good and reliable income for you? Then raise your rates -- that's one of the knobs you can turn to reduce your workload to something that won't consume your entire life.

Do you want to grow your business into something larger, supporting employees and having numerous clients? Then lower rates will help with this.

Both things are legit, and each has their own advantages and disadvantages. My advice is to clarify what your goal is here so you can better aim for it.

[JimDesigns]

Thanks John, that makes quite a lot of sense actually. I guess I need to think about that more in-depth as I feel like I want both.

[nonrandomstring]

You advertise as "premium".

Advice I once heard; if you're commodity price as _low_ as _you_ can bear. If you're premium, price as _high_ as _they_ can bear.

Dunno much about your product and I just glanced at your site but feeling I get is if AI is really going to reshape markets the way some people suppose and destroy the commodity side, then human design is going to become a luxury anyway. So you may as well jump into that fully as a premium service now and go for the top.

[JimDesigns]

Love the perspective! Thanks!

[throwitaway222]

Pricing page is a bit weird. If someone can pay $1000 they can probably pay $1500 a month. It sounds like its a service that can replace an in house designer so probably.

However pricing pages shouldn't have prices like that. Is there any way to change the model to have Free, $5, $30, Enterprise (call)?

Free gets customers but you don't need to mentally worry - there would need to be something that automates everything.

$5 is also automated, but maybe one of the features that you don't get "free" is available...

Maybe this is not really what you're going for though, so treat this comment as a half grain of salt.

[JimDesigns]

That sort of pricing would make sense for a SaaS, but not sure for a service like mine.

> If someone can pay $1000 they can probably pay $1500 a month

I realize this is increasingly true as most of my customers are now actual startups (vs indie hackers in the early days)

[mortenjorck]

Interesting model. As a designer currently exploring options outside of the increasingly competitive full-time market, I’d love to learn some more about how you’re making this work.

On the pricing front, I would suggest this: look at how your customer base breaks down between your two pricing tiers. If it’s weighted toward the higher tier, that may be a signal that you can push higher. Maybe experiment with raising that tier first?

[JimDesigns]

It is in fact weighted toward the higher tier. However, I intentionally wanted to keep a reasonable gap between the two plans (< 30%) to not undervalue or overvalue one or the other.

PS: Happy to provide insights on how this model has been working for me