Get Your Clients to Stop Comparing Rates
Posted February 15, 2010 in Managing Clients, Marketing
You are the best at what you do. No other freelancer can do what you do as well as you do it.
The problem, however, lies in getting clients to understand this. This is particularly hard if you’re still in the start-up stage, where you’re having to find the clients, instead of them coming to you.
In certain industries, like design, it’s easier to get the client to understand the difference in quality and rates (although designers still get rate-comparing clients), but if you’re a developer or writer, it’s tougher to get the client to understand the difference.
So how do you convince the client that your $100 an hour services are better than the other guy’s $30 an hour services?
Think Like a Consumer
We are all consumers of products. A client-freelancer relationship is much the same as a consumer-product relationship.
When the consumer (the client) shops around for a product (the freelancer), several factors are taken into account before the consumer purchases anything. What are these factors?
Let’s pretend our consumer is shopping for a car. All cars are essentially the same in that they have four wheels, some seats, a radio and a windshield. They all get your from Point A to Point B in the same amount of time. So what makes a consumer pay $60,000 for a BMW when they can get a Yaris for $8,000? Perception.
- Perceived Value–A consumer generally believes that the more expensive product is of better quality.
- Perceived Status–A consumer generally believes the more expensive product makes him better looking, cooler or more accepted by society.
So how does this apply to a freelancer? You must make a client believe they are going to get a lot more with your services (the BMW) than the other guy’s (the Yaris).
Of course, perception is nothing without reality. If consumers found out that the BMW breaks down every week, uses cheap materials and was missing seat warmers, a premium stereo and other gadgets we’ve come to expect from luxury cars, the BMW would quickly lose its “luxury” perception.
Make sure you, as a freelancer, really are providing your clients with “BMW” services before you start charging that premium price.
Get Clients to Come to You
The best way to get clients to stop rate-comparing is to get them to come to you. This can be done several different ways.
- Referrals–If your client tells a friend that your work is super-awesome and that friend comes to you for some work–they’re less likely to haggle prices. This is because they already know you do awesome work and there’s no one else to compare your rates to, since they’re probably not shopping around. They’ve already seen the product and know how it awesome it is.
- Testimonials–Testimonials work similarly to referrals, but are less effective. Testimonials are especially effective when they can be tied to actual pieces in your portfolio.
- Through the grapevine–You hear other freelancers and experts talk about the importance of social media–and they’re right. If a client sees you active on Twitter, with lots of followers and professional conversations, and then sees that you have a popular blog, they’re going to know that you’re one of those experts. And they’ll pay more for that.
Don’t Use an Hourly Rate
Hourly versus set rates have been debated plenty of times before, but if you want to set yourself above other freelancers, you need to stop using hourly rates. This is important for several reasons:
- If you’re faster at what you do than most other freelancers, you can shortchange yourself by completing projects too quickly.
- Clients like to know what they’ll have to pay up front. What sounds better? “I charge $50 an hour and it will probably take me 10 to 20 hours to get that done.” Or, “That project will cost $1,000?”
- Hourly rates can be limiting. When you tell a client that you charge $100 an hour, a client only sees that hourly number. They don’t see that while you charge twice as much as the other guy, you’ll get it done in half the time (and do it better).
- There’s a cap to how much you can set your hourly rates–certainly no one will pay you $300 an hour for your services, but you can charge a $300 flat fee for something you know will only take you an hour to complete.
Go Above & Beyond
Don’t just offer your clients a design, development or writing service. Give them more and don’t charge for it. For example:
- Offer business or web-related advice.
- Deliver your product ahead of schedule.
- Tweet or blog about the clients’ site or business.
- Always answer the phone and emails with a smile on your face. It shows.
Make sure you’re giving them those luxury features to remind them of why they’re paying you more.
Focus on Benefits, Not Prices
A client once told me that although I charge a lot more than other developers, I was worth it because my work was great and I was easy to work with. This is the kind of response you want from all your clients.
Unfortunately, you’ll always have those low, or no, budget clients that always choose the cheapest freelancer, irregardless of the quality of services you provide. But, the great clients that you really want will recognize the quality you provide and are willing to pay more for it.
Don’t be sneaky about your prices, but try not to focus on it. State your price, but then talk about the benefits and ROI you can give that client. Why should he hire you and not the other guy?
Share Your Experiences
How did you get your clients to pay your higher rates? Are you still stuck trying to accomplish this?
Image by refractedmoments
- A Simple Way To Stop Clients From Rejecting Your Proposals
- How To Stop Scrambling For Clients And Get A Steady Stream Of Paying Gigs
- 3 Reasons Your Rates Are Still Low (And How To Start Raising Them)
- Will You Raise Your Rates in 2010?
- Why Your Rates Are Painfully Lower Than They Should Be