I’m kind of cheating by participating in this one since I’ve already raised my rates =)

Like you mention, raising rates is all about finding the right balance. I also like to think of it as your rates set the amount of work you do. If you have really cheap rates, every man and his dog will want you to work for them. If you’re really expensive, you might not get any work. It’s all about finding that sweet spot where you’re making the most money for the right amount of work.
.-= Luke´s last blog ..Growing by turning down work =-.

You’re so right. We have this subconscious thing where we judge the value of a product/service by its cost. So most of the time, if something is inexpensive, we think “Oh then it musn’t be any good.”

On the other hand, it’s also possible to be too expensive and out of reach to most prospects. The key is finding the perfect price point for our particular target market.