Why You Should Charge More

One of the tenets of wealthy freelancing is getting more out of the work you do. Getting more out of it in the way of enjoyment, satisfaction - and, of course, income!

And one of the best ways to boost your income is to raise your fees until they're truly aligned with the value you deliver. Once you reach that level of parity, you must continually work to add even greater value, which in turn allows you to raise your fees again and earn a better living.

(You can also boost your income by improving your productivity, but that's another training episode.)

Of course, when your fees are higher than the average freelancer in your field, it won't be long before a prospect balks at your quote. You'll hear comments such as, "Wow! I usually pay 30 percent less with other freelancers."

Or, "Are you kidding? This should only take you a couple of hours to complete. How can you justify charging $600?"

There are several ways to address these pricing objections (some of which I've never used because they involve profane language!). But the best commentary I've ever heard on this issue came from author and blogger Jonathan Fields.

In a recent blog post, Jonathan commented on his recent throat surgery. He ended up going with a top-notch (and ultra-expensive) specialist who didn't take his insurance. But Jonathan was happy to pay several thousand dollars out of pocket because, as he pointed out,

"I wasn't paying for his 'time in the O.R.' I was paying to be as far as possible away from the guy who went first. I was paying for his 25 years perfecting his skills, thousands of patients, tens of thousands of hours and tons of newbie mistakes avoided. I was, quite simply, paying not to be first."

Here's the thing, my fellow freelancers. If you're experienced - and if you're good - smart clients are NOT paying for your time. They're paying to be as far away from your first client (and the mistakes from your first project) as possible.

Smart clients don't want costly mistakes. They don't want the project to bomb. And they certainly don't want to hold your hand.

Instead, they want to be able to award you the project and feel confident that you'll come through and deliver an excellent product. On time and with little to no hassle.

The more experience you gain, the more projects you work on, the more problems you help clients solve, the more value you can add"¦and the more you're worth.

So the question is... Are you charging accordingly?

Now... I'm not going to sit here and just tell you to charge more. Yes, I've found that most of us underprice our services-some by a lot!

But before you do anything, you need to be honest with yourself. You need to determine how much your clients value you and your services.

One of the best ways to illustrate this point is with the Cobb Value Curve, which was developed by William C. Cobb, a consultant based in Houston, TX who works with law firms.

Source: WCCI, Inc. v Cobb Consulting Group (www.Cobb-Consulting.com)

If you look at the diagram above, the horizontal axis represents the volume of work available in the market for the services you provide. On the other side is the relative value those services deliver, as perceived by your clients.

So, at the very top, you have hugely important needs ("nuclear" events) the client needs to take are of right now. For instance, say you're a crisis-communications expert. And one of your clients is Acme Foods, which makes peanut butter. Say that there's been a massive food-safety alert involving Acme's peanut butter products, and the Food and Drug Administration (FDA) has issued a recall of tends of thousands of jars of Acme's product.

Your client is now in crisis mode. They need help communicating to their customers and to their retailers. They need you, and they need you now. They're not shopping around. They want someone who can take care of this problem in the best and most professional manner possible.

Few of us have the luxury of being in that situation all the time. I certainly don't. But it doesn't need to be a catastrophe. If it's massively urgent for your client, it qualifies.

OK, but what about more common occurrences? Well, there's still great opportunity outside of nuclear events. In fact, it's the sweet spot, and it's the place you want to shoot for. It involves situations where you bring your experience and track record to bear... and you're hired mainly because of that experience.

Note that this is a great place to work because you're still in an area where there's less price sensitivity. The client perceives your expertise and track record as very valuable. Which explains why she is not as price sensitive as she would be with other types of services or in other situations.

Assignment

Yes, I think you should charge more. But before you go there, I urge you to take a hard look at your experience, expertise, skills, work background and track record.

Then, ask yourself: how does all this make you different and better than others you're competing against?

Take your time with that question. Write as many answers or reasons as you can.

Next, if you're not already doing so, how can you communicate that value and expertise throughout your website, your marketing communications, and your conversations with prospects.

And how can you do it in a way that makes sense to them?

For instance, I'm a marketing copywriter. But rather than just saying that, I tell prospects about my software sales background. And how I leverage that experience and track record to write marketing and sales pieces their sales force can use to generate more leads and speed up their sales cycles.

A business development consultant I know positions himself as an expert in Latin American market expansion for telecommunications companies. He ran the Latin American division for a global telecom company, and now works with companies who are trying to expand into these markets. His experience is invaluable for his clients.

A graphic designer I recently met is an expert at designing visual elements for events. Specifically, customer conferences, trade shows, and industry symposiums. Many of her peers are being commoditized, but because of her specialty and her track record with that type of work, she commands higher fees.

So, the lesson here is to not discount anything. Take a hard look at your background and experience. And find as many reasons as you can to start communicating higher value to your prospects. If you do that successfully, you'll soon find yourself consistently working in that sweet spot of the Cobb Value Curve.


  • Ali ‘Bahraini’ Al-Awadhi

    How about people who are starting?
    For example I have an experience in graphic design (specifically in branding, and illustration)
    but then I moved to a different area and I have to start rebuilding myself
    What can I leverage in a market filled with designers?

  • JDMorgan22

    Until I read the International Freelancer's advice on fees, I was under paid, big time. I feel more at ease in charging what I'm worth. Just started with this new attitude, will keep you poster.

    • JDMorgan22

      Posted.

  • Mia Sherwood Landau

    This is a great evergreen article about pricing our services, Ed. I really appreciated the quote from Jonathan, too.

    • edgandia

      Thanks, Mia! Glad you found it helpful.

  • James palmer

    Hi Ed. Great post. I know it was meant to be motivating, as I'm sure it will motivate some, but it just makes me depressed. I charge high rates for my services, I just never get them. I recently had a referral who wanted me to create an email marketing campaign and a free report to give away for $100. Rather than cave in, I told him I couldn't do it for that, and I never heard from him again. Good riddance. Plus, I'm a generalist. I don't have a specialized background or set of experiences that will wow anyone into hiring me. I have subjects I'm interested in--tech, social media--but no demonstrable experience in these subjects. I'm currently contacting marketing agencies looking for content marketing writing work, but I suspect my lack of a particular industry experience is why I'm coming up empty there, too. In the meantime, I'm pitching to blogs that pay $50-$100 a post, and getting a couple of assignments, all just to fund my publishing business. My real passion is fiction anyway. Good luck to everyone here. I know it can be done. I've just never had much luck with it. At least I have the dead end full-time job. The thought of searching for freelance copywriting clients makes me physically ill.

    • edgandia

      James -- I know how trying this can be, and I definitely sense the frustration in your comment. There's a very good explanation of what's going on out there, and I discuss it in his podcast episode: http://b2blauncher.com/episode9. I'm not saying that this is THE answer. But I really think it explains the dynamics of the freelance market and why so many struggle while a few seem to thrive.

      I really believe with every fiber of my being that 90% of success as a solo pro is NOT inborn talent or luck. I think it's a combination of preparation and opportunity. When those two factors meet, magic happens. Have a listen at that episode and see what you think.

      • James palmer

        Thanks, Ed. I read your thorough notes with that episode, and will download it as soon as I get home. I think you're right on the money. My biggest problem has been a lack of a clear client profile and niche. My ideal client is someone with money who has a lot of projects! The exact opposite of what I've been attracting. In the end, I think it became more about the money than anything else for me, and when I wasn't even getting decent fees, it just wasn't fun anymore. All I wanted to do was replace the day job so I would have more time to write novels. Now that I have a slightly better job at the same employer, and the technology is in place to make self-publishing a viable option, I think I'm better off pursuing my chief passion. The thoughts of putting up another website and prospecting now makes me sick to my stomach, especially since I still don't know who my ideal prospect should be, besides a very general sense. And If I can't do it right this time, there's no point in me doing it at all. I can make $50-$100 by writing an article for a blog in an hour, instead of scrounging for months and working for hours on something for another cheapskate client for the same amount. What would you do if you were me?

        • edgandia

          James -- if the thought of building another website and having to prospect for clients makes you sick to your stomach, I would pass on this. Seriously. As you already know, this takes serious commitment and tenacity -- and a very strong stomach. If your heart wouldn't be in it, why do this? You'll be miserable.

          I'm not judging or putting you down in any way. Far from it. Just giving you my honest, unvarnished opinion.

          Keep looking for the right path for you. You'll find it, my friend.

          BTW, have you listened to this episode of my podcast?
          http://www.b2blauncher.com/episode39

          • James palmer

            Thanks, Ed. That's exactly what I needed to hear. I'm just not willing to build another website and go through everything I know is involved and have to stop my other writing to do it. That, and I don't have a clue who my ideal prospect is. I do however know who my ideal reader is, and I understand how to reach them. I'm going to keep doing that. I wouldn't trade the time I spent copywriting for anything. I made some much-needed money and met and worked with some amazing people (like you, Steve Slaunwhite, Bob Bly, some of the folks at Early to Rise, and some fabulous business owners, like a blind woman who sells clothes). I've also met some folks who were absolutely cray-cray and worked on some horrible assignments. I also learned a lot about myself and what I'm capable of. I've learned some Internet marketing tricks of the trade that have helped me sell my books.I've learned to follow my passion rather than what the "market" says will make money. I've learned that the only true failure is to never have tried at all.
            No, I haven't listened to that one yet. I gave it a pass, even though stories like that interest me. I love hearing success stories from other businesses. I'll give it a listen.
            Thanks for everything you do and everything you are. I appreciate it.

  • Mari Serfontein

    I'm still pretty new at this, but you certainly made me look at my previous experience in a new way.

  • Jon Pietz

    Smart companies focus on the 20% of customers who provide 80% of the profits. Smart freelancers should do the same.

    I remember reading an account by author Tim Ferris who had a vitamin distribution company. He got fed up with being treated shabbily by demanding customers and working 16 hours a day to fill orders. He analyzed which customers caused the most stress, and which created the most income. He subsequently fired 90% of his customers and ended up retaining most of his profit while freeing up 75% of his time. Then he used the spare time to get better clients, greatly increasing his profits while cutting his work hours way down.

    Use the 80/20 rule to raise your rates and find better clients! You don't need to fire them all at once, but it'll help you decide which ones to focus on.

  • MariaN.

    Interesting article. Thank you, Ed. I have a question: Suppose you have lots of experience,
    but you want to branch out into a new area. What strategy would you suggest in that situation?

  • Adrean

    How do we find out what others charge for the same services? Most freelancers don't post their prices.

    • edgandia

      @b3a62acef8cc9da22aaa4d928e9544c0:disqus - Start a mastermind group with colleagues in your industry. Make the sharing of fees/pricing the basis for getting together. Can definitely be a virtual group and you can meet over Skype or teleconference line.

  • It took me a very long time to realize that my background in manufacturing and actual shop floor experience is one of my value adds.

    • Good point, Dianna. It's actually the one thing most freelancers DON'T do -- leverage their previous background, experience, contacts and insights. THAT'S where the magic is. That's what will get clients to stick with you.

  • I saw a fascinating video recently. Two monkeys were assigned a task. When they were both given a piece of cucumber as a reward, they both complied. When one monkey was given a grape and the other just a slice of cucumber, the monkey who received the cucumber threw it back at the person who gave it to them. That made me wonder why we freelancers don't stick up for our rights to equal pay for equal work as we should. In my case, it was because it took me a long time to see that other monkeys were getting grapes while I was getting cucumber. When I did, I tripled my rates over a period of a year and only lost one client.

    • @Rob Schneider, Love that!! Do you remember where you saw that video? I'd love to see it. You're so right, Rob. At some point, we have to realize that most of us are severely undercharging for the value we deliver. Few things have motivated me more than seeing colleagues who added no more value than I did ... yet they charged 50%+ more (and they were getting it!).

    • Enoh

      Great piece. I started freelance writing at $3 an article. After a particularly nasty employer tried to force down my rates, I basically told him to take his jobs elsewhere. I realised I had been working for guys who would get these $30 an article projects, then hand me $2.50 and pocket the rest. I decided to seek out the primary clients and got a few of them. Now I do not do articles less than $20 a piece. I have even charged up to $40 a piece and now make about $1,500 a month, which gives me lots of time to do other things.

    • JDMorgan22

      I love this analogy, thanks, Rob.

  • That is actually basic knowledge and the problem is that it is so basic, that many of us forget it...

  • I'm working right now on enhancing my message to clarify that the expertise my clients get combines my 16 years of teaching composition, my lifetime as a poet and published writer, my experience as a theater artist since 2005, and my marketing savvy. That's certainly worth a lot.

  • I'm having a deja-vu moment, feeling like I've commented on this piece before, but it's good information either way!