5 Signs You Are Seriously Underselling Yourself
Let’s not value ourselves and our work so little.
Freelancers agonize over pricing.
They might be new and uninformed about their market. They might be desperate for income. They think: low price, more work. They think they can’t say no to any job, and undersell themselves in order to get as many jobs as possible.
If you do that, you’re cutting your own legs out from under you.
First, understand one thing: shoddy work doesn’t work. If you’re not providing an excellent service or skill set, your financial situation will reflect it. When I say “underselling” I’m talking about high quality work without equally high and valued pay, not low-quality work for high-quality pay.
1. Tying Price To Self-Worth
What people pay you is an exchange for goods and services, not a reflection of your worth or value as a human.
It also shouldn’t be a reflection of your confidence level in the given moment.
Women are particularly notorious for basing pricing structures on factors that are outside of the goods/service realm. A 2006 study (A Behavioral Study of Pricing Decisions: A Focus on Gender) found that one of the reasons women tended to earn less than men is because they tied pricing into feelings about clients and themselves.
Your feelings towards your client should not affect your pricing structure.
Determine the rate you’re willing to exchange goods and services for, and stick with it. Straddling the fence between building loyal relationships and undercharging is a very difficult place to make a comfortable living. You’ll grow to resent customers (even ones you like) because they’ll become used to getting something cheap.
Train them right from the start what you charge, and they won’t expect any difference. If you start low, you’ll have to fight to go higher and you’ll make people angry. If you start high, you can always lower it later, no problem.
Remember, what you offer is not who you are. The value of each is separate.
2. Ignoring What The Market Is Doing
Prices that are too low only attract customers that want great things for nothing. That doesn’t mean they are bad people, it does mean they come with a different attitude than a client who says “You’re the expert. I’m happy to pay you what you ask.” What works in a retail world is not necessarily great for a freelancer.
Oddly, customers who pay the least often demand the most in return. You want to attract serious paying customers, and not freeloading users.
Trying to be the cheapest person for hire doesn’t do you any favors. You have to be able to make a living without working 24/7. Underselling the market attracts those who aren’t actually in your market. Stay competitive in your market, and don’t seek a lower bracket.
3. Undervaluing Your Experience
If you’ve been doing something for a decade, you’d better not be charging the same rate you started at.
That decade of experience? It has its own value. It is made of time, mistakes, hardship, self-taught skills – and it’s worth something. Expect future customers who benefit from your experience to pay for it, even if it means you can actually work faster than you did early on. The better you get, and the less time it takes you, the more you charge. Your rate increases as the time decreases.
Your experience has value. Charge customers if they want to make use of it.
Pricing too low only means you’ll be exhausted, disillusioned, and unhappy. You’ll quit.
4. Too Many Free Lunches
Do you find yourself practically giving things away?
It’s fine to give back to your community. Donate to worthy causes, teach others how to do something, write useful tips on your blog. But if you find most of your time dedicated to work you aren’t seeing any financial return for that only generates more requests for something for free, the balance is way off.
Is what your doing for free going to build your business later? Will it build loyalty?
You’ll know you’ve been giving away too much of value for free when your clients start demanding the premium service or product but always for next to nothing. That’s no surprise; you’ve trained them to expect things for free instead of teaching them that they need you and will pay for it.
Give enough away to keep them hungry. Keep the thing that makes you money behind a pay wall.
5. Extreme Frustration
Asking too little creates frustration in your life that manifests itself in strange ways.
Being tired, irritable, or unmotivated are common. You’ve hit your tipping point for work and you can’t even find a clear focus anymore. Feeling anger about your situation, towards your clients, and towards your work can often be traced back to the fact that you aren’t charging enough to live on and it is having a destructive effect on your life.
When you undersell yourself, you willingly give up more time. Because your cost of living is at level X, you must work and earn enough to meet it. Underselling means you must work more, and work harder. Do you have to work an 55-hour work week just to make ends meet? Or could you work 40 hours and charge more?
While it’s not unusual to be frustrated with clients once in a while, there are few things more angering than a needy client you know you didn’t charge enough. They still have the same demands as any client, but you’re getting paid much less for your time.
Do you find that even in the most frustrating of client situations, you feel a sense of relief at the amount of money they are paying you? Or do you instead feel cheated and have anger towards them for “trapping” you?
Charge higher. Don’t fret the clients that don’t bite. There are others.
Make Some Changes Now
Are you underselling yourself? This is the perfect time to stop.
1. Research. Grab a pencil and paper, and start doing some research. Find out what market rates are. Call around if necessary. Look online. Increase your prices and alert your clients. You’ll know which ones were with you because they love your work (they’ll stay) or because you were cheap (they’ll put up a fuss and go).
2. Look Inward. Take stock in yourself. Look at your skills, knowledge, and experience honestly. If you can’t, find a trusted colleague that can do the evaluation from an outside perspective. Write it all down. See your value and worth in professional terms, and you’ll quickly see you have a legitimate right to charge more than you are.
3. Separate. Force yourself to separate your worth and identity from your work. Otherwise, every rejection of your work becomes personal, and makes it too easy to drop your price in order to get the client and regain your “self-worth.”
4. Practice No. Practice both saying no to jobs that don’t fit this new plan, and practice living with yourself after you’ve said no to a few projects. The first couple of times you’ll struggle, always calculating the money you turned down. Find a way to turn that extra time and focus towards something more productive.
When you set yourself up to work more with less income, you’re asking for exhaustion, disillusionment, and unhappiness. You’ll eventually give up on freelance work, or quit and find a “regular” job with a “livable” wage. Be sure that the dream you gave up was because you wanted to, and not because you didn’t charge enough. Underselling yourself poisons dreams and makes them monsters.