How to Negotiate More Money for Your Freelancing Services
Try a combination of pricing formats. | Photo courtesy of Burstify
Negotiating freelance rates may seem daunting. However, it’s important to charge an appropriate rate for your services and experience.
Freelancers often fear that a rate hike might mean losing clients. However with proper planning and preparation, negotiating rates doesn't have to be scary or difficult.
To advance your business and your earnings, you will need to bargain with existing and prospective clients. Here are six useful tips for successfully negotiating higher rates.
Determine Your Minimum Rate
What's the lowest rate you're willing to work for? The minimum rate you charge should reflect your expended time and effort as well as your costs and personal overheads.
Don’t forget to look at opportunity cost, or potential gain from other alternatives roles or jobs. The opportunity cost might be money you could have earned working in a non-freelance role, such as consulting at a marketing agency.
Think about your options and use what you decide to determine a worthwhile minimum rate. Add taxes and markup when sending a quote to prospects.
If you’re interested in learning more, you can always join a course or negotiation class too.
Negotiate on Pricing Format
Your freelance pricing format can have a detrimental effect on your earnings. Consider these three scenarios for a freelance writer:
You price per hour: Imagine that your client needs blog posts for selling airplane parts. At first, each 1,000-word blog post takes you 16 hours to complete. As your subject matter knowledge grows, you start providing higher quality posts in fewer hours. You are effectively reducing your income as you gain experience and provide higher quality output.
You price per word: Imagine that your client needs content for their fashion blog. For you, it's an easy enough topic, and you can complete two or three posts per day. With time, your client pivots to different vertical markets, and this time needs posts for their finance blog. The topics are more challenging for you and need more in-depth research. You're now working harder yet earning less.
You price per job: Each time your client sends you work, you negotiate based on the difficulty level and the value you create. This system works best with short-term clients. However, bear in mind that long-term clients could tire of bargaining so often and might take their business to a freelancer who charges steady rates.
Each pricing format has pros and cons. An ideal approach would be to use a hybrid form. For example, avoid relying on hourly rates for pricing, as they cap your earning potential, since you have a limited number of hours per day. And your skills and experience means you’re able to work on more projects more quickly. , Try to combine per-word pricing with per job pricing to maximize your earning potential. For example, if you're a writer, you could charge per-word for lifestyle posts and command a per-post fee for technical articles.
Negotiate Service Value
It pays to consider the value your client receives from your work. How does your work affect the client's business, and more so their bottom line? Is the client a startup looking to raise funds? Is your client a merchant selling through your copywriting? Is the client running a blog seeking rankings through your search engine optimization services? How your client gains from your work can dictate how you charge.
For instance, for copywriting services, you may negotiate to earn commissions on top of (not instead of) charging per copy. For funding proposals, you may also negotiate for commission based on how much venture capital funding you contribute towards raising for the startup. For blog posts, you may charge extra based on engagement metrics, e.g., number of shares, mentions, links, comments, etc.
Scope of Work
Freelancers often receive extra requests from clients. For instance, the client may ask a virtual assistant to conduct interviews for an upcoming podcast. As another example, a design client may request the designer to add SEO elements to their design.
Extra work calls for more effort and more hours. Negotiate with your client to pay for all extra work. To avoid misunderstandings, be sure to draw a written contract. The contract should spell out what each job involves and the pay. Make sure to state your pricing for extra work.
Bottom Line
The key to negotiating freelance rates successfully is to show your value to the client. Be bold in approaching your clients and spell out how your work drives their business goals. Price your work in a way that takes care of your business and personal overheads while bringing in a profitable markup.
Writer Lee Washington is a marketing advisor by day, do-gooder by night. He has led teams to great success through effective digital marketing campaigns that connect new audiences with important information and opportunities for skill-building. Lee excels at crafting attention-grabbing messaging and has a clear strategic vision.