For freelancers, the topic of freelancing rates is an important one. Our fees, or how much we charge for our services, directly affects our income. The more we charge, the more money we make. Also, the higher our fees, the fewer clients we need to meet our target incomes and for other reasons.
In this post, I’ll discuss some of the other reasons why freelancing rates are important (reasons that you may not have thought about). I’ll also provide you with some painless tactics that you can use to raise your own rates.
Why Our Fees Are Important
But our fees are important for many reasons besides meeting our target income. For one thing, prospects judge us by our fees. It’s like shopping for shoes. When you see a pair that looks nice but is incredibly cheap, you wonder, “What’s wrong with it?” On the other hand, when you see a pair that’s $200 or more, you think, “Wow, this designer shoe must be made of some hard-to-find leather to cost this much!”
In the same way, people make similar assumptions about you, based on your fees. If you charge $5 per article, they could come to the conclusion that you: are not a native English speaker; live in a developing country; are not to be trusted with research; will probably need to have your work double-checked for grammar, typos and accuracy of data.
On the other hand, if you’re pricier than most of your competitors, prospects will naturally judge you to more talented, more experienced, and in higher demand than them. It’s not necessarily true, of course, but it’s the way we humans think most of the time.
Your fees also affect how well you service your clients. If you charge low fees, you’ll need to have more clients to earn a given income. This means your time and attention will be divided among more clients. You’re going to be spread more thinly. You’ll also use up more resources to find and manage all these clients.
But if you charge higher fees, you can earn the same given income with fewer clients. You’ll be working on fewer projects, so you’ll be able to give each client more of your time and attention. Each one will have a higher share of your bandwidth. You’ll also save on the effort and money it takes to find new leads and manage all your clients.
With higher fees, you’ll have more resources to invest towards your training, tools, equipment, and support.
In short, charging higher fees helps you be a better freelancer.
Tips for the Faint of Heart
Despite all the benefits of charging high fees, the thought of increasing fees can be scary for freelancers. In all likelihood, you will lose some clients. Depending on how much of an increase you implement, you could move into a new market altogether — which means adjusting your marketing strategies.
Below, I’ve come up with different ways to increase your fees, starting with gradual, less scary increases, to bolder moves you can make when you’re good and ready.
- Increase in small increments over time. If you’re scared all your clients will bail on you when you increase your fees, then try making small steps. A 10-15% increase is hardly noticeable to your clients, but can make a significant impact to your bottom line. You’ll be pleasantly surprised how willing your clients are to pay you MORE–assuming you’ve been keeping them happy. That said, it is possible for even a small increase like this to make you unaffordable to some of your existing clients. If that’s the case, negotiate to change the scope of the project. Perhaps for the same rate, you can write eight articles instead of the previous ten articles per month. Or maybe your client can give you more time to complete the same service, or pay you in full upfront instead of when the project is completed. The idea is to earn more for the same amount of work you used to do, or earn the same for less work.
- Increase your rate for each new client. Another way to increase your fees gradually is to do so with proposals you create for new prospects. I’m assuming you don’t publish set fees on your site and other marketing materials (see number 4 below). This way, you don’t have to worry about them being used to negotiate for your previous (lower) rates.
- Increase your rate for each new project. For new as well as existing clients, you can start making small increases in quotes for new projects. If the new project is similar to something you’ve done for a former client, give a brief (not apologetic) explanation for your new rates. Say something like, “I’ve increased my rates since we last worked together.” You could even add “For new clients, my fees have increased by 25%, but because you’re a preferred client, your increase is only 15%.”
- Publish your fee range, instead of set fees. It’s easy to increase your rates when you publish your fees as a range or ballpark figure, instead of set amounts for each service. For example, if a prospect knows I charge sales page $1000-2000 per sales page, then it would be easy for me to move towards the higher end of my range. And then I could easily increase my range to $1,250-2500.
- Bundle existing services with a new service for a premium price. This is one way you can start earning more, without changing your existing fees. Create a new package where you bundle a new service with an existing one. For example, if you’ve been creating website headers alone, why not offer a complete website graphics package, composed of a website header, custom social networking logos, and a newsletter header? If you go this route, you should still increase the rest of your fees eventually.
- Formulate a platinum package. This is a bolder variation of number 5. Ask yourself what is absolutely everything your prospect needs to achieve his or her goals? Then come up with a package to provide all of it. To illustrate, I provide sales page copywriting. My platinum offering could be a complete product launch package complete with: pre-launch videos, email sequences for in-house lists and joint venture partners, squeeze page, sales page, Twitter tweets, and post-launch email sequence. Because the package is so comprehensive, I can charge a premium amount. I may need to bring in other people to offer everything my client needs, such as graphic artists, multimedia editors, and virtual assistants. Factor all this in when determining how much to charge.
- Go big and relaunch your freelancing business. After making small increases in your rates every few months, you’re going to get more comfortable with the idea of charging premium fees for your services. When that time comes, you might want to make a big change. This is a good time to relaunch your freelancing business. Evaluate, not just your fees, but your branding and marketing strategies as well. And then make a big deal about relaunching your business. You may have completely new service packages, collaborate with other freelancers, or have a bigger virtual team. You’re also going after bigger clients now. You want to be expensive, look expensive, and be totally worth it.
What did this post inspire you to do? Are you going to take small steps towards charging more — or are you willing to go big and bold?
Share your next steps with us in the comments below.
Image by Refracted Moments