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Friday, May 02, 2014

Writers Worth: Why Your Price Isn't Arbitrary

What's on the iPod: I'm Shakin' by Jack White

I'm back again for the second installment of this month's Writers Worth Month celebration. I promise you'll hear from plenty of guest bloggers in the coming weeks. This week, short as it is, I wanted to talk price with you.

Imagine this scenario: You contact a writing client. You talk. He asks your rate. You provide it. He says, "Ooo, that's too high."

What's the first thing that goes through your mind?

1) Oh damn, I just lost this client.
2) Oh gawd, what if he's right?
3) My price is right; the problem is his budget.
4) Oh no! I should counter with "but it's negotiable."

If you answered 1, 2, or 4, congratulations. You've just allowed someone else's reaction to influence your rate.

While you might mentally go for #1, it's better to retrain your thinking. Putting the emphasis on losing the client means your emphasis isn't on pricing your services appropriately. Instead, you're thinking about how not to lose the client.

The best reaction is to understand where that client's reaction is coming from. I've had plenty of experience with potential clients running when the price is mentioned. Sure, I could have lowered the rate and scored the gig, and a few times I did negotiate where I felt it was warranted on both sides of the equation. But for the most part, you should set your rates with confidence, and you should stick to them until you're used to asserting your price without apology.

So why the reaction by clients? Well, many believe your price is some random number you've plucked out of the air. Frankly, at the start of your career, that may well be the case. However, if you've figured your rate (I love Jenn Mattern's Freelance Hourly Rate Calculator), you know what it's going to take to help you reach your business and personal goals.

Here are reasons why your price isn't arbitrary:

1. Skill begets compensation. You may not command over $100/hour your first year in freelancing, but as your skills improve and you add more clips to your portfolio, you gain a higher market value.

2. Freelance is still cheaper than 9 to 5. The sticker shock many clients get when they realize you're not charging the same as they're paying employees can be a tough hurdle for you. However, a quick reminder to those clients that you're actually charging less than they'd pay an employee in benefits may help. Even if you're charging $125 an hour, you're still a bargain to someone who pays an employee $65K to sit in the office every day.

3. You work smarter. I've seen plenty of corporate clients have meeting after meeting, pushing back decisions until everyone is on board, never really getting anything done. As a freelancer, you know how to work efficiently, listen, take charge where needed, and bring a unique perspective to the project.

4. You're a business, not a hobbyist. Make no mistake - some clients will compare your rates to hobbyist writers who will work for free or practically free. That's not you. You work for clients. Your job is your writing. You're charging what's fair, what the market already demands, and well within an acceptable range for the task at hand. You'll be asked (if you haven't been already) why your rates are ten, twenty, one hundred times that of other bidders. Your answer is simple -- because this is your job, not your hobby.

Writers, what other reasons can you think of for why price is not arbitrary?
What advice can you give new writers on rates and negotiation?

9 comments:

Cathy Miller said...

Our bills and living expenses aren't arbitrary so why would we think our income should be? ;-)

Lori Widmer said...

AMEN! Leave it to you to boil it down to one succinct sentence. :)

Sharon Hurley Hall said...

Cathy's good at that! ;)

I like #4 - must remember to use that if it comes up.

Paula said...

I've had to use #4, Sharon, so I hope it never comes up for you! The publisher treated all of his writers as if we were just trying to earn a little extra money. A friend who also wrote for them taught me a new phrase when she said she told the publisher was wasn't working for "pin money."

Any idea where that originates? Someone saving up to buy pins? Money to pay for a bowling game? (Not sure why, but I visualize a little old lady, circa 1930, pinning a dollar bill to the lining of her skirt.)

Needles to say, neither of us write for that joker anymore.

Paula said...

Could I have any more typos in one comment that I did above?

Anne Wayman said...

when someone says they can't afford me, I usually ask what they expected or what their budget is. If it's way under my rate I say something like, "obviously we're way apart - thanks for telling me."

If we're close I may do a bit of negotiating... I find often on large projects spreading out the payments can help.

I never argue with them - I might remind them they aren't paying my benefits, but rarely... I know all four of your list are true... if they don't get it, they don't get me.

Eileen said...

If your client can't afford your fee, ask what they can afford, and tell them what you can do for that money. This happened to me a couple weeks ago. I quoted a project at $3K, and the client said they had a thin budget. He asked me, point blank, "What could you do for $1500?" We were able to cut back the scale of the project so that we were both happy.

As for working smarter, another client has just learned this. They expected to need me on retainer for 28 hours a month. But because I'm actually working all 28 hours and not in meetings, standing around the water cooler, etc., they actually can't keep me busy enough. They'll be cutting back their hours (but the big discount I gave them will shrink along with the hours).

Paula said...

Now I'm imagining the different tones of voice Anne might have asked,"What were you expecting?"

I'm sure you were perfectly polite, Anne, but I'd have a hard time keeping the snark out of my voice.

Lori Widmer said...

Sharon, I doubt it will come up. You charge what you're worth -- rarely do those clients question price. They know you're worth it!

Paula, I think that's the misconception many get about freelancers. One of my longest-running clients still says "Are you still freelancing?" when he writes. And another always reminds me of their toll-free number so I'm not paying for long distance...?? Doesn't everyone have nationwide rates these days?

Anne, good way to handle it. I never like answering back with contention, so I try to find a cordial, friendly way of expressing disappointment or conveying that we're far apart on price.

Eileen, excellent way to get some kind of project commitment! People don't always have the budgets for us, but their circumstances going forward could change for the better. They're more likely to remember writers who were flexible with them.

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