When it comes to working in the gig economy, one of the biggest hurdles for a solopreneur is freelance pricing. Oftentimes, when you’re starting out, you’re so desperate for work that you charge less than you’re worth. Thus, I’ve been asked several times for my advice about when and how to right-size what you’re earning.
Obviously, this isn’t about what someone just starting out would charge. This is about how to get where you want to be when you have some time under your belt. So, with that said, here’s my two cents.
1.) Focus less on the hourly and more on the package.
When you charge by the hour, you’re constrained by the number of hours in the day. When you package and bundle your offerings, however, you can take time out of the equation. The goal is to give clients choices and let the focus be on value, not price.
Find out which “extras” are enticing to clients and put those into a package with your regular offerings. The goal is to make clients feel like they’re getting more value for their money.
2.) Offer discounts for pre-payment.
It doesn’t make much sense to do onsies and twosies for new clients when the getting-to-know-you process is much more involved. As such, consider setting the bar for starting to work together.
I have a friend who won’t sign a new client for less than a 10-hour package. Since her packages must be paid for before the start of service, she offers a 10% discount (or, one hour free) to incentivize the client. Then, she stipulates exactly when those hours expire (in a “use it or lose it” fashion).
3.) Don’t worry about the competition.
Although many freelancers base their rates on what similar providers are charging, this may not put you in a prime position. If you charge less, you may be perceived as bringing less to the table. If you charge more, you may be seen as unnecessarily pricey. In general, the problem with charging what others are charging is that you’re then seen as a commodity–just like everyone else.
Keep in mind: we’re in a global economy, so someone who works in New York or L.A. isn’t going to charge the same as someone in Kansas. Conversely, even the least expensive freelancer in your local market is going to charge more than someone in the Philippines. Thus, in terms of finding your best bracket, be sure to consider the local competition.
Also, focus on how portable your job is. If you can make yourself valuable in a more expensive locale–and work remotely–then you’re going to seem like a bargain.
4.) Publish a price list.
Once you’ve established your packages and pricing, don’t worry about keeping it a secret. Proudly publish your price sheet on your website. People like to have clear expectations about what things will cost. If they already know they can afford you, they’re more likely to hire you.
In addition, when your prices are set in black-and-white, you’re less likely to discount your services when you feel put on the spot.
5.) Give your quotes and estimates in writing.
Instead of hemming and hawing about what you charge, put it in writing. Not only is it more professional, it also ensures that there are no surprises (or misunderstandings) down the line.
To give it the one-two punch, try combining your proposals with an agreement. In other words, tell them what you’re offering for how much…and then ask them to sign on the dotted line. It’s an assumptive close, and it works more often than not.
6.) It’s about more than just money.
When you look at who you’re working for and how many hours they’re throwing your way, it’s important to do a cost-benefit analysis. Simply stated: better clients get better rates.
Or looking at it a different way: perks. Whether that is additional hours, a bonus piece of work, or your time on weekends, it should be no surprise that you will naturally want to treat some people.
7.) Offer a satisfaction guarantee.
If you find that new clients are a bit gun-shy, consider offering a money-back satisfaction guarantee. By providing this olive branch, you’re able to build trust up front and take the fear out of buying a package, sight unseen.
Be very clear what steps the client must take in order to take you up on your offer. This must be in writing. (For instance, the client must request their money back, in writing, within the first X hours of your package.)
Afraid that they’ll actually take you up on it? Better to know now. To give you an understanding of why all those infomercials are always shouting that you can get your money back if you aren’t a gazillion percent satisfied. Most consumers do not take advantage. In fact, at a vitamins company I worked at in a past life, we had a 150% money back guarantee. Less than 0.5% of our millions of dollars in sales took us up on the offer.
Even if someone does want their money back, don’t despair. It’s better than the freelancer’s kiss of death: a bad online review.
8.) Tie your brand to bigger, more notable brands.
If you went to an impressive school, worked for a big company, or served a “wow” client, use their logos and names on your website and marketing materials. Leverage the brands that other people recognize to make your own brand that much more powerful.
This not only creates a trust bridge, it also has a built-in perception that you are worth more than someone who has no ties to well-known work.
I’ve worked in the gig economy for over a dozen years and, believe me, I’ve seen it all. I’ve struggled with raising rates…only for my clients to hardly bat an eye when I do. It’s an age-old problem and a never-ending battle.
We all hate sticking our necks out, but standing behind your offerings proudly is the only way to truly become the best choice in your client’s head. If you truly believe that your worth what you’re charging, do so confidently. It’s the only way for others to believe it, too.
So, tell me, Changers, what do you charge for your services and why? How did you get to where you are today? Please share your experiences in the comments section below so that others may learn from your strengths!