My favorite Catalyst Blogger Jen has an excellent post up about defending one’s prices to clients. She gives you great advice on defending, not lowering, your prices.
I can’t help but think you’re sitting there, new to freelancing or just never comfortable talking price, thinking the client has some justification in debating what you charge. You may be thinking “Yes, my rates are a little high. I mean, I live in …. and here, no one can afford that.” Or it could be that the minute a client mentions price, you feel the guilt crawling into your gut and you can’t possibly charge that. But just like Jen said, the minute you compromise your price, you compromise your standing with that client.
Here are some reasons why you can’t lower your fee so quickly:
Your client will nickel-and-dime you throughout your relationship. Yes, they will. One client paid a meager sum for blog posts, but would pay much more for newsletter articles. That lasted about a month, then he was back complaining that he didn’t see the difference, so he wasn’t comfortable paying the agreed-upon higher price for the articles. Buh bye.
You get a reputation. I had one client to whom I had given a rock-bottom price for his project. He referred his mother to me. Only Mom expected the same rock-bottom price not for one website page – for her entire website. He’d told her I was cheap (isn’t my mother proud right now?). I couldn’t escape the mindset with him or his mother, or frankly anyone else he’d refer to me. I had to let that referral stream go. Amen.
Your client’s financial issues are no more your concern than yours are to him. They do it quite often. They say “I can’t afford that.” Some will even go so far as to justify it further with the gawd-awful line “I just paid a designer / web host/ accountant most of my money.” That’s no excuse. Your price is built on your ability to conduct business and turn a profit. You deserve a profit, just like they do. Would they raise the price if you said something like “I can’t work for that because I have to pay for my kid’s braces this month”? Hell no. So don’t let that sway you. Give them alternative payment options, but price breaks are only for ongoing work and regular clients.
You attract bottom feeders. Once you’re used to dropping your price at the mere mention of cost, your level of clientele begins to dip. You’ve shown you have no faith in your abilities and no backbone when it comes to justifying your price. They smell fresh meat, and they’ll pass your name down the same food chain to other clients who won’t value your services. Worse, you begin to target clients at that lower level. Ask for what you need and stick to it.
The client who wins the fee debate controls the project. Normally I’m not about who has control of what in my life, but in my work, if I can’t own the writing process, I’m merely a clerk-typist. If a client wrests control of the price too easily, that client is going to be picky and uber-managerial throughout the rest of the project. Don’t think it’s a direct correlation? Try it. Better yet, avoid the agony and just listen to those of us burned a few times by that very phenomenon.
Why won’t you drop your prices?
I don't drop my prices because this is my business, not my hobby, and I am worth every penny.
As I say when they start arguing, "You want the best? Hire me. You want something second-rate? Go hire someone else."
It sounds egotistical, but it makes the point in negotiation. You are a business person. If you don't negotiate as a confident, competent business person, you tell them it's okay to treat you disrespectfully. And they will.
An interesting article on why we don't need literary agents or publishers anymore.
http://www.bostoniamagazine.com/fall09/kirsner/
Just last week a friend who's a full-time employee that deals with licensing and clearance issues was griping that the company brought in a freelancer who she said was being paid more than she was for basically the same job.
I pointed out that freelancers HAVE to earn more per hour than full-time employees. After I listed typical freelancer overheads like providing your own health insurance, paying 100% your income taxes; retirement funds, etc…. she started mentally crunching the numbers and the light finally clicked in her head. Otherwise I would have asked if she was ready to trade all her perks for his slightly higher hourly rate.
Even in this economy a lot of full-timers still take their benefits for granted.
I can't even fathom being paid NOT to work!
I was burned too many times before. Making bad choices like this, due to bad advice; does cost you the reputation you have worked hard to build. It is no fun trying to build it back up. Save yourself the hassles and headaches and just don’t do it.
This is a FANTASTIC post–and it took me WAY too long to learn all this. The truth is, all your expenses–including enormous taxes, health insurance, and other cost-of-life issues–are BUSINESS expenses and you have to factor that into your pricing. That's what people who do this for a living do. Students, dabblers and newbies who don't understand these basic business principles are the ones who don't–so if I get a prospect who wants to hire someone like that, my advice is to go ahead and do it.
Your excellent post was my inspiration, Jen. 🙂
Like Devon says, this is a business. There are expenses to that, and you've outlined those quite well, as has Paula. For clients not to get this is understandable. For them not to pay us a fair rate after realizing this is unacceptable. They're saving the cost of hiring a full-time employee. We're providing excellent services. Both require adequate compensation.
Wendy, I have the same burn marks. They eventually heal, but you're so right – it takes a long time.
Paula, she wouldn't last a day. Those leaving the 9-to-5 have no idea what they're leaving behind until it's gone. Then the panic ensues.
Not egotistical at all, Devon. You conduct yourself as a business person. Cheaper writers often do not. There's a HUGE difference, especially when things go wrong on a project. One can handle it. The other usually cannot.