Freelancers of different types, styles, and specialties share one significant shortcoming: We never actually know what a “good rate” is.
One Friday afternoon, back in 2006, I was sitting at my enormous desk in in my teeny tiny bedroom in the teeny tiny flat I shared with my (teeny tiny) mother.
My Nokia 5500 rang. On the phone was a nice lady who worked for a large multinational that sells fizzy soft drinks in red and white cans. She wanted website copy for the company’s foundation in Africa. Fantastic.
(Had I written web copy before? Nope. Did I think I could? Yup.)
Did I know what to charge? NOPE. NOPE. NOPE.
I asked the nice lady to hold and called down the teeny tiny passage to my mother, who was sitting on her bed. It was, remember, Friday afternoon. She’d heard the whole conversation, of course — well, my end of it — because: teeny tiny flat.
“What should I charge?” I asked her. “Ten grand,” she said. “It’s a nice round number.” So I did. And it all worked out. Happily.
But asking your mother what to charge is not a sustainable strategy for a freelancer.
So here are three things you can consider:
1. What others are charging
What you can charge depends to a large extent on what your competition charges.
But what are they charging? Can you find out? Google rates surveys from your industry. Many freelancers post their rates on their websites, so look there. You might even consider asking them; the worst they can do is refuse to tell you.
Furthermore, how good are they? How does their experience compare with yours?
The overruling question is this: Where do you fit in with your competition? And the answer dictates how aggressively you can and should set your rates.
Now, I’m not a massive fan of this approach, because you may be underselling yourself wildly. But it can be a good starting point or a worthwhile sanity-check.
2. Your competence and speed
Your competence and speed can have a huge impact on your bottom line. So don’t under-value yourself by charging per hour, just because you happen to be good.
Remember, the client is paying you for all the experience and knowledge you bring to the table. And value-based pricing means you’re remunerated for the benefit you bring to the client, not just your time.
Think about this:
As an experienced copywriter, for example, it will take you far less time to throw together an ‘About us’ page for a website than it would a junior writer.
Sure, your hourly rate will be higher, but sometimes you’ll come out charging less than a junior would, because you can do it faster — and are more likely to hit the brief the first time. Figure out a reasonable price for the end product, and charge that.
3. Package-based pricing
You don’t want to under-charge and work for peanuts. But you also don’t want to over-charge and scare away potential clients. So how do you find the “sweet spot”, where you charge the maximum amount your client is willing to pay?
The answer is simple: Offer multiple options. Use a 3-pronged pricing technique and allow the client to choose which package best fits their needs.
The “bare bones” package costs just enough to put you in your “Minimum Happiness Zone”. The medium package is your standard bundle and slightly pricier. And the “bells and whistles” package is the VIP treatment. This one should be BIIIIGGG.
In my experience, most clients head straight for the middle package (which, incidentally, is also what I do when presented with a wine list in a restaurant). It feels safe there, like you’re getting what you need and you’re getting value.
Give these a try.
But if you’re still wondering how to a) figure out base or standard rates for yourself and then b) have the confidence to stick to or exceed them…
Or if compensation in your industry is comparatively low and it’s hard to negotiate up…
Or if the idea of applying a value to your expertise and experience fills you with anxiety…
…there are 7 things you need to know about rate-setting — and there’s 1 trick that changes the game.
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