Imagine for a moment that you’re driving down the highway and you’re low on fuel.
You pull off at the next exit and see two gas stations. To your surprise, the one on the right side of the street wants $4 a gallon, but on the left side of the street they’re only asking for $2.
Where are you going to fill up?
For most of us, the answer’s obvious: at the cheaper station. After all, gas is a commodity. Shell and Exxon both sell the same product, no matter how hard they try to differentiate themselves.
So why do we question why our clients balk when we try to command a higher price or reach beyond the invisible ceiling of “market rates”? If all we’re selling is words, why should they pay you twice as much as what I’m proposing?
Value-Based Pricing: Your Escape from Commodity Pricing
Once upon a time, I ran a decent-sized web agency. Like most, I charged around what I heard other people were charging.
After all, there’s an acceptable rate for what we do, right? Wrong.
As we grew, I started really looking into the psychology behind pricing. Why do I buy stuff? Why do my clients buy from me? And why do I win some proposals and lose others?
And as I started researching, I quickly realized that I wasn’t being paid for my work. No one was paying me to write code, create designs, or author words on their behalf — they paid me because they wanted to solve a business problem.
Let the Problem “Anchor” Your Price
Once I came to this realization and started peeling back the layers behind each project request, it was pretty easy to use a little Socratic questioning to uncover the “why”s behind a project.
No one was asking for a new site for their restaurant. They were asking for more walk-in customers.
Nor did the local ecommerce retailer want a “fresh redesign,” they wanted more profit so they could expand faster.
And by positioning the work we did toward that end, and treating our craft simply as the vehicle that got us there, we ended up changing everything. Our initial meetings focused more on them, and less on us. Our proposals focused on delivering a return on investment, and not a fancy project brief. And our work was always constrained by, “Will doing this help us get closer to the goal?”
When you’re talking with a prospective client, try to determine why they want more content added to their blog. What’s the real reason behind their project request? (Hint: it has nothing to do with words.)
Once the focus shifts away from you and your skills, and more toward the client and what tomorrow looks like for their business, concerns over price will largely be a thing of the past. You’ll be confident with what you charge, because you know what impact you’ll have on their business.
GLFH says
“I know that I know nothing.” As Socratic as this one who comes to learn from ground up gets. Thank Firepole for pointing here.
Jackson Anderson says
Hey Brennan, great article and great tips. It really is in the wording in how you present it to your client.
I’ve only got 1 client at current and while I haven’t hit them with a rate rise or anything like that still in the VERY early stages of the relationship I do feel I may have been able to fetch a higher price per article when quoting.
I opened with $40 USD and it was so easily and quickly accepted I probably should’ve asked for more and gone through at least some negotiation, live and learn as with everything 🙂
Next time I’ll definitely “high ball” a bit more and see what happens!
Alicia Rades says
Oooh fun prize. I love the idea you’ve outlined that it’s about making sales and not about the actual words. I think I’ll have to use this idea on my writer website.
Jessica says
Yay! What stops me is a mixture of loyalty/guilt and lacking the confidence in my work.
Margaret McGriff says
“Let the Problem Anchor Your Price”
I need to post that on my wall! Great posr and just what I needed to read.
What always kept me from raising my rates was the fear I would be charging too much. But like you said, if you know the value you bring (and let potential clients know it!) then they will gladly pay you higher rates.
Awesome post!
Chris says
Brennan,
Great article. It is all about mindset and how you look at things. I am interested in the video, as I need a little mindset work.
Marysia Trembecka says
I think I tend to worry that others are as good or better than me for the price. Silly really but ….
JR John says
Hi Brennan,
Thanks for that bit of motivation! Loved it!
In answer to your question, the real thing that keeps me from raising my rates is, well, I’m still a bit in “I-don’t-want-to-lose-potential-clients-so-I’ll-quote-cheap” syndrome.
It’s just the feeling that I’ll scare ’em off (hey, whaddaya know, that’s part of this post’s subject line! 😉 ).
However, I’m slowly learning that there’s a market for beat up Volkswagens & Hondas, and there’s a market for BMWs, Lambos, and Bugattis.
Just my thoughts.. 🙂
Regards,
JR John
Maricel Rivera says
This hit home, to say the least. And I totally agree with you, Brennan.
Last month, just before the year ended, I dove into a rate raise discussion with my biggest client. There are two types of content work I do for them. After some discussion, he agreed to raise my fee 50% on the first. (I proposed 100%. Not bad, if you believe in aiming for the moon if you want to land on the roof.)
On the second, a “seasonal” type content work, some sort of a test they do every now and then, he gave me this as food for thought: “If your articles do well and get us some leads or sales, we’ll raise your rates.”
Indeed, it isn’t about the articles per se but the return on their content investment.
Louisa says
A great perspective on an age-old problem. Thanks. This will really help me. I left a decent-paying corporate job over 10 years ago, and when I first became a freelancer (translating and proofreading) I struggled so hard with the invoicing aspect. It somehow felt wrong to charge a decent rate for doing what I love to do (bonkers, I know!) Thanks for the fab post! 🙂
Geoff says
Very well put. Thanks for this and other great pieces! I got into freelance because of a love of writing and the business side of things has definitely been a rewarding (and mostly fun) struggle.
Cheers
Permy N. says
AFTER 1 YR BREAK, am re-establishing myself in the industry and there is so much still to learn, so much has changed
Celeste says
What stops me raising my rates?…Let’s see…Will I loose current clients who are used to paying the lower rate? How do I sell the same thing but make it seem more valuable so that I can charge a higher rate? There’s other people who know waaay more than I do on this topic so who am I to charge more? Suppose the client doesn’t think what I’ve delivered is worth the raised rate?…and I’m just getting started…Lol!
Bruce Hoag, PhD says
I’d say that fear was the biggest reason. Unless you have a full order book and more potential customers pressuring you for your expertise, the fear is that the clients you have now will high-tail it for cheaper shores if you put your prices up.
Kaila says
I think because I am unsure of my value. Once I give myself the pep talk, it’s easier to raise my rates.
Jodie says
Fear is what stops me but I’m going to change that now.
Christy Piper says
Great way to put this into perspective, Brennan. For me, it’s more that I haven’t established my clients yet. I feel like I should have a few solid ones to put into my portfolio. Or maybe my own blog is enough? It’s always hardest getting started.
Rohi Shetty says
Hi Brennan,
Thanks for the great advice – it’s all about the client’s needs and wants – so true.
I’m still building my business and have started outlining my first e-book.
Ginger says
I’ve just started freelancing, and I really need work – that’s what prevents me from raising my rates.
Bree Brouwer says
I don’t want to raise my rates because every so often a voice in my head goes, “You don’t have enough experience or social proof to convince your clients you’re worth it.”
And a note from the wife of a car geek: Shell actually has higher-quality gas with more detergents. 🙂
Lynn Silva says
Thanks for a great article. I’m really gifted at being able to identify the root problem even with clients who don’t really know what it is they want. They come saying, “I need less stress.” Sometimes that’s all I get so I have to dig and read between the lines. What I am NOT good at, is negotiating. Once I identify a core issue, I get so focused on that issue and how I can help that I’m very easily talked down in my rates. I have to stop doing this. I absolutely need more self-confidence. I just hope I attain it quickly. : ) Again, that you for a very helpful article.
Sophie Lizard says
Lynn, that isn’t a self-confidence issue. It’s an over-helping issue. You’re so busy trying to help, you feel like you should give your clients the “help” of a lower rate too.
Remind yourself that if you can’t pay your bills, you’ll get too stressed to help people effectively anymore. It’s your *duty* to charge enough to make a living so you can make the valuable resource of your help available to others.
Chris Peden says
Spot on advice, Sophie!
Lynn – I am guilty of the same thing. Let’s make a joint resolution to stop doing this!
MJ says
I’ve only had one client so far, and that was by pure luck or fate or whatever you want to call it.
I had never heard of freelance blogging. I had only been blogging for less than a year on a mom blog I share with my best friend. A friend of a friend was looking for someone to blog for her company, and my friend suggested she contact me.
I charged her $15 per post, and most posts were between 450 to 750 words. Yeah, I know – slap me. I had no idea what the hell I was doing.
I found Sophie’s website after starting to research about freelance blogging. I wanted to kick my own ass after I saw the money I could be making.
So after a month, I told my client I would incrementally raise her rates and the next month her rate would be raised to $35 per 450 words. She dropped me instantly. I didn’t feel too bad because I found out she knew *exactly* the deal she was getting. Bitch.
I now decided my rate would be $50 per 450 word post, but I still feel extremely uncomfortable, like I’m not worth it. I have 2 potential clients right now – both of whom would be regular ongoing work.
Logically, I understand everything in your post and it makes complete sense. But my self-esteem demon keeps me down and questions why I feel I am worth more since I have so little experience.
Also, in person, I not quite talk so eloquent… ly.
How do you sell yourself when you have to talk to a client in person (or on the phone) and you basically *love* being a hermit?
To give you an idea of how bad I am, I have a degree in applied biological sciences and I was pursuing a career in police forensics because I wanted to mainly work with dead people and a microscope. 🙂 It’s very strange where life will sometimes lead you.
Bethanny Parker says
Maybe one of your specialties could be writing about new forensic techniques and equipment. Is there a trade magazine for that?
Bethanny Parker says
Here you go: http://www.forensicmag.com/. Look below the form on the contact page for editorial e-mail addresses. Why not send them a pitch?
Sophie Lizard says
MJ, I used to be a member of the Forensic Science Service here in the UK. This type of specialist knowledge is GOLD. All you need is the right type of clients, and Bethanny’s already supplied your first lead. 🙂
We can talk a lot more about your options in your prize mentoring session. I’m looking forward to it!
MJ says
Wow, small world. 🙂
I guess it’s time to start researching and reading up on what’s out there now. It’s been a few years since I pursued a career in this field.
I’m really looking forward to the session, too! Hopefully, I will be able to schedule it soon.
MJ says
Thank you, Bethanny! Silly me, but I’d never even considered looking in that direction. It’s been a few years since I pursued that career field.
Bethanny Parker says
I’ve been trying to raise my rates with new clients. What’s stopping me is that no one has said “yes” yet. I’ll get there.
Cat Williams says
I haven’t charged or been paid anything yet as I have been accepting the mentioning of my book as ‘payment’. My pieces are being highly rated but I don’t know who will pay and how I ask them to…
Aisha Shehu says
I seem to be scared of charging too high and keep feeling that I will negotiate around my clients budget. Now I’m thinking is this really a good way to charge my clients…
Allen Taylor says
I know some of my clients are going to bail as soon as I raise their prices and I can’t really afford that right now. So I’ve decided to secure new contracts before dropping my lowest paid clients. When I reach a new income goal, I’ll drop a client.
At the beginning of the year, I sent my lowest paying client an option: Pay what everyone else is paying or I’ll scale my services back. They chose to let me scale my services back, so in effect I did raise my prices on that customer.
Raspal Seni says
Hi Brennan,
Seems the question maybe somewhat dificult for me to answer since I haven’t yet started getting clients for my writing business.
I sure raised my rates from time to time when working on oDesk, but the rates were tiny and the highest one was only 8 USD an hour. I even decreased my rates at times when I wouldn’t seem to get jobs despite great coverletters, great test scores, great feedback and portfolio/profile. And after decreasing the rates, I’d start getting job offers even without applying.
Anyway, what held me back from raising my rates abovve 8 bucks an hour was, I didn’t think there were many clients who’d hire me at high rates. Secondly, I didn’t know my worth and didn’t know then, how much could I charge for my writing. Demanding too high a rate would not get me the jobs, whereas demanding too low wasn’t good and I felt as if wasting time, working for pennies per hour. I needed guidance or examples of people charging higher for similar quality of work as mine.
BTW, thank you for making everyone win. 🙂 This is the best kind of prize and makes everyone happy, except, maybe Sophie and LittleZotz … because they won’t win. They don’t need this is another thing, though.
Rachel says
Am I sorry I missed this!! I just received a request for a proposal, and I’m at a loss of how much to charge. I’m worried about charging too much, because then clients feel like it’s too much. On the other hand, it’s hard to quantify value when I can’t guarantee what results they’ll have. I can’t promise they’ll end up on the first page of Google, for example.
So how do you phrase the proposal so that people see the value of the proposal, but so that you don’t have to worry about promising things you can’t guarantee?
Sophie Lizard says
Promise what you *can* guarantee instead. Promise to save your clients time and make their existing website visitors more loyal to their brand, for example. Or promise to triple-check all your facts so they never suffer the embarrassment of publishing a poorly researched piece by an inferior quality blogger. Of course, to figure out what to promise, you first have to sit down and think through all the things your blog posts will do for the client! Then pick out no more than 3 points to emphasise.
P.S. If you get stuck, try including some research data, for example “Studies show that businesses with regularly updated blogs publishing at least X posts per week make up to Y percent more sales through their websites”. Sometimes it’s more effective to point to a study or report by a well-known authority than to give your personal assurances.
Rachel says
The truth is, I always use stats to prove my points, especially in the wooing stages. I think I’ve got it figured out now. This client wants to be ranked for certain KWs on the first page of Google. I was all worried that I couldn’t promise that could happen.
However, maybe I could just say something like ” improve ranking for x KWs by” and list a percentage.
I guess what I’m saying is that I want to make sure there is a quantifiable measurement to show I’ve done what I said I would. But maybe my client doesn’t need that quantifiable measurement? Maybe only I do? Hmm..
Sophie Lizard says
Hmm indeed, Rachel! I’d go with “improve ranking for X keywords to meet targets agreed in consultation”, then determine what ranking or percentage growth is both realistic and satisfactory for the client. If you want to quantify your promise, talking to the client is the only way to make sure the numbers you give are the right ones for that project. 🙂
Rachel says
Thanks Sophie! Just checking in to let you know that this is exactly what I did, and I landed the job! $1200 first payment and an additional $5800 when he gets the results we agreed upon.
Yay!