Estimated Time, Pricing And Budgets
I got a question a while back about freelance pricing and hourly rates and the like.
I’ve written about these subjects before, but it doesn’t ever hurt to give updated views on the whole thing.
The question asked about a client who said, “We’ll pay you whatever is less: your quote or the price we have in mind for hourly estimates.”
This is a bad set up for a number of reasons.
Let’s talk about them.
#1 Never Let The Client Set Your Price
This is a newbie mistake that freelancers make, and clients are all too happy to take advantage of.
You need to know what your service is worth. Know the going market rate and what a client should expect to pay, and then hopefully you’ll command a premium because you’re better than your competitors.
Clients will want to pay less and sometimes you’ll get clients who have no business hiring in the first place. These are the guys that’ll say, “I want a website built for me. $50 should do it, right?”
You need to know your value and you need to charge that value. Good clients will respect you for this and are more likely to hire you. Bad clients will be put off immediately and that’s a good thing.
On a related note: You are being hired because you are the subject matter expert. If a client tells you that they could do it themselves or otherwise acts like they know better about your business than you do, then they are incorrect.
You know your field better than they do otherwise they wouldn’t need to hire you.
#2 Avoid Clients Who Want “The Best Price Available”
Clients who will try to heavily barter you on price are almost universally bad clients.
For copywriters this is especially true. If a client is trying to haggle you down on the budget they’re hiring you to work on, then the chances of them having a budget big enough to effectively run traffic to your offer are very low.
But in general, clients who aim for the cheapest option view your services as a commodity.
Assuming your work isn’t a commodity, you don’t want to be put into that box.
In any case, competing on price is a race to the bottom.
It is much better to set your own rate and then set a “discount rate” for projects you particularly want to take on, than to allow yourself to be bought for a bargain price.
#3 Don’t Charge By The Hour
Internally, you can arrange your fees by the hour. So if you want $100 an hour and a project will take twenty hours, you can charge $2000.
However, you shouldn’t charge your clients by the hour except in very specific circumstances. So if you’re doing an hour long consultation, then you will charge for the hour, because the time is a key component.
However you don’t want longer projects or more complex, task-orientated projects to be charged hourly.
Why?
Because time is a poor indicator of value and it’s contentious.
If you charge by the hour, a client will want to micromanage you or haggle you down. I saw one guy recently who got told to download a time-tracking software to his PC so that his client could “make sure he was working.”
That’s insane.
More commonly, you’ll get someone saying, “Hey why did this article take five hours when I could write it in fifteen minutes.”
You shouldn’t be paid based on the time you spend on something. Some of my better performing work has been done in a single draft, and some has taken forever to create.
You are paid based on the finished article.
#4 You Are Your Own Boss
Let’s just wrap this up because the question – and most questions people have about pricing – come from the same place.
That place is the place where people aren’t acting like their own boss.
“Should I charge X?”
“Can I charge for Y?”
“What do I do if my client says Z?”
All of these things can be circumvented if you learn your value, set your price and stick to it.
At that point, all of the variables can be condensed down into, “This is what I do, this is what I charge and you’re either in or out.”
And that’s the best way to approach dealing with clients.