#003: How to Command Higher Fees With This Simple Strategic Shift

Summary: In this episode of Smarter freelancing podcast you'll hear from Ed Gandia on how to command higher fees with a simple strategic shift!

Are you having trouble getting clients to pay you what you're worth?

Sick of all the low-cost providers who are bringing down prices in the creative arena?

I have a different take on all this. And that's exactly what I'm discussing in this week's show. Once you understand what's really going on, you'll have a key piece to solving the "getting higher fees" puzzle.

The notes that follow are a very basic, unedited summary of the show. There’s a lot more detail in the audio version. You can listen to the show using the audio player below. Or you can subscribe in iTunes or Stitcher to get this show delivered straight to the Podcasts app on your smart phone, tablet or iPod.

Mowing Lawns and Freelancing

First, let me set the stage by telling you about my “apocalypse” backup plan.

It's mowing lawns!

But I wouldn't mow just any lawn anywhere—I'd be strategic. I'd go to expensive neighborhoods with lots of young urban professionals. Why?

  • They have money to spend
  • They have nice homes they want to keep looking nice
  • They don't have time to do it themselves
  • They would rather hire a professional and reliable company to do it.

It's the same in the world of freelancing!

One of the most common challenges I hear from freelance professionals is that their prospects and clients don't value what they do enough to pay the fees they deserve.

This could be the result of three things:

  1. You haven't communicated your value
  2. You haven't demonstrated your value
  3. You aren't working in the right markets.

Today I'd like to address point #3 (we'll cover the other two points in future shows).

Which Neighborhoods Are You Targeting?

If I owned a lawn service business, it would be pointless to complain that people in inexpensive neighborhoods don’t value my service!

If I asked you for advice, you'd tell me to go after “hungrier” markets and start prospecting in more expensive neighborhoods—neighborhoods that are willing to pay more for your services.

No matter what your profession, there are probably markets where you could apply your services and get paid well. But to find them, you have to understand how companies prioritize their budgets.

Where Are Budgets Shifting?

Most clients prioritize their internal projects on a scale:

  • Nice to have
  • Important
  • Urgent

When the economy is strong, clients spend money in all three categories. But when conditions deteriorate or the market shifts, budgets focus more on "Important" and "Urgent" items. "Nice to Have" projects are put on hold or scrapped.

Key Point #1: In a competitive economy, freelancers simply CANNOT afford to go after projects that aren't considered "Urgent" or "Important" by their clients.

Key Point #2: Also go after prospects that provide primarily “Urgent” and “Important” services to their own customers.

By doing this, you make your business relatively recession-proof.

But What If I Love What I Do and Who I Work With?

I get that! You don’t have to overhaul your entire business.

#1: Consider other topics/markets you’re interested in.

#2: Experiment with hungrier markets.

#3: Look for new types of clients that work in the area you enjoy and would pay a premium for your services.

#4: Ask yourself what will happen if you continue on the same trajectory? What if the market DOESN'T wake up to what you offer (and aren’t willing to pay more for it)?

  • bsaunders

    I enjoyed the analogy. I have a cousin who built his teen lawn-mowing business into a grown-up landscaping company. He's doing very well. I've found that the best-paying projects come from clients who need thinking skills not just writing skills. For example, I started out writing consumer-facing content for a company. The assignments evolved into translating findings from technical reports into fact sheets for executives. Within the stable, I have much less competition for that work.

    • edgandia

      Brilliant of you to have made that distinction. "Thinking skills" -- love that!

  • Great podcast Ed. It's nice to hear more about the mind shift that we freelancers have to make in order to break out of a rut (if we consider it a rut, natch.) It's one thing to know what to do, but it's another to truly believe in those actions, and also believe in the changes that the shift will bring. Change can be difficult & scary, but in the end, totally worth it. =)

    • edgandia

      Thanks, Julia! Yes, fully agree -- it's definitely worth it! Appreciate your comments. 🙂

  • Jenn Osborne

    Thanks for addressing this aspect of the changing freelance marketplace, Ed. I agree completely with key point #1. In my experience, working on projects that aren't urgent also lowers my sense of my own value. If it can be accomplished for $5 on Fiverr, then unfortunately that's exactly how much that project was worth. I'd rather hear from my clients when a project is high-priority--even if that means they call less frequently.

    • edgandia

      Amen to that! Thanks for the feedback, Jenn. It's tempting to look at the market dynamics and complain that we're being commoditized. But the reality is that every market and profession will ALWAYS have a segment that is continually being commoditized. We have a choice -- we can complain about the injustice ... or we can adjust to what the market will inevitably do over and over again.

  • Amanda

    Once again, Ed, you have stated the almost-obvious with that extra bit of insight that makes all the difference. Thanks for doing what you do! (And thanks on behalf of the visual learners for continuing to make at least part of the material available in written form.)

    • edgandia

      Thanks, Amanda! Appreciate you listening. And thanks for the feedback on the written show notes. When I decided to try this approach, it sounded like a good mix of media. Glad to hear it's working in practice. 🙂

      • iFixText

        It absolutely is Ed! I appreciate the option to scroll through when I'm in a hurry but don't want to miss your insights. You're really make a difference in so many freelancers' lives. I'm hoping to soon be in a position to invest in one of your training sessions, as I know it will provide huge return!