3 Steps to Raising Your Rates and Getting Paid What You’re Worth
- Working all hours and still not making the money you want?
- Working on small jobs with fast turnarounds and no budget?
- Confused about what to charge and how to command the fee you want?
Don’t worry. You’re not alone. Most freelancers price too low and, as a result, feel resentful and burned out. This is typically born of the belief that if we price low, we’ll get more clients. But believe me, being the cheapest option is not a competition you can, or want to win.
With 15 years of representing creative talent and 6 years of coaching creative professionals under my belt, I’ve learned that pricing creative services is a complicated issue. There’s the logistics of it: How much are my services worth and What will the market bear? Then there’s the emotional aspect of it: Do I have the right to ask for that much? or Will my clients actually pay that much for something that comes so easily to me?
The difference between the freelancers who stay stuck in a hand-to-mouth cycle and those who build a business that supports the lifestyle they want to have the ability to get paid their worth.
So let’s get you into that latter category! In this newsletter, I’ll share 3 ways you can confidently ask for, and get paid,what you’re worth.
1) Know the difference between cost and value
You’ve probably all heard of the famous story about the Nike “Swoosh” logo design. The sports brand paid just $35 USD to graphic design student Carolyn Davidson back in 1971.
Crazy, right? Yet, most of us start out basing our fees the time it takes us, not the value that our work adds to a company.
Take a moment to reflect honestly on your business? Is there a gap between what you’re being paid and the value you add? Even if you’re not sure how to put a number on your value just yet, knowing that your unique skill is worth a great deal to others will help shift your mindset into one of positive expectation — a crucial element to confidently asking for what you want.
Note: If you have some baggage around money and asking for what you’re worth (and most of us do!), I’ll be sharing a few great resources at the bottom of this post to help you shift your mindset to one of growth and positive expectation.
2) Stop charging by the hour
Charging by the hour immediately makes you a commodity in the eyes of your client. The first step to getting paid what you’re worth is to shift from an hourly to a project or retainer rate. Here’s why:
- It positions the creative product as something of real value, rather than an extra pair of hands to be paid hourly
- It positions you as a resource for the bigger, more creative projects
- It helps the client budget and allocate funds for projects
My clients often fear they will meet resistance when they shift from an hourly to a project rate, but it’s rarely as bad as they think! Clients (or the ones you want, anyway) recognize this is business and are open to talking about different ways to work together. Remember to approach the conversation from the perspective of how it benefits them and you’ll be good to go.
Here are some tips to moving from hourly to project pricing:
- Communicate to clients from the outset that you only work on a project-by-project basis and you’ll be happy to consult with them on the scope of their project and put together a proposal.
- Ask the client what their budget is before creating an estimate. Proposals take time to create and you want to be sure your expectations are aligned before investing that time.
- Be sure to communicate verbally and in your estimate the value of what they will get as a result of working with you.
- Don’t share prices upfront. Wait until you have spoken to the prospect, communicated that you understand their needs (and can deliver) and established the value they will receive.
- Don’t price too low. Clients place higher value on something that is an investment. Remember, you can always negotiate down, but you can never negotiate up
- Price yourself in the top 10% of your industry peers
A general rule of thumb is you want the client to have to think about the significance of the investment for a moment, but move forward because they recognize the value.
3) Know your hourly rate
Now I know I just said you’re not going to charge by the hour, so while you won’t be sharing your hourly rate with your clients, you need to know what that is based upon the hours you’re actually able to work (billable hours). This formula will help you calculate your hourly rate, which will be the basis upon which you estimate project fees.
If you’re ready to bring more freedom, fulfillment AND income into your creative business, I invite you to schedule a free call with me.