How to price your services to sustain a healthy income could well be one of the biggest dilemma that contractors face.
Go too high and clients have abundant opportunities to shop around and take their business to someone charging lower fees. However, if you keep your prices too low, you risk two things. One pitfall of being “too cheap” and clients don’t value your services and have respect for you. The other problem of having fees too low of course, is that you work massively hard for very little return.
So how can freelancers pitch their fees right? How can you ensure that clients are willing to pay a rate that is equitable to your level of experience and the work involved on the project?
Here are six tips for negotiating high-end rates.
1. Know your own worth
The starting point is creating a clear price point for your services – or a sliding scale – that you feel is appropriate and fair. Dig around and do covert research if possible, to find out what your competitors charge. Better still, see if there are any potential clients willing to provide feedback on what they generally pay for services similar to yours.
Your freelance pricing structure has to cover both the actual time required to render your services, but also sufficient income to cover the hours of admin and preparation needed to run your business. Your fees should also reflect the level of experience you have.
How low, can you go? Keep that price firmly in mind throughout your negotiations. Dipping underneath your threshold devalues what you do and knocks your enthusiasm and confidence.
2. Gauge when to offer discounts
However, your fee structure could include a small amount of “wiggle room” for projects you are particularly keen to pursue.
For example, your fee structure could include a discount for contracts that would add weight to your credentials. Or, for clients who could award you multiple or larger contracts in the future.
Having a well thought out pricing strategy that includes such detail can make your sales pitches more confident. You are ready to sell your freelance services strongly enough to show that your fees are appropriate and immovable. But, you can remain agile to important opportunities.
3. Learn to present with confidence
If you have a freelance business, you clearly know your stuff. However, that’s a whole different skill set from being able to present and negotiate confidently. (Unless of course, you are a freelancer in sales and assertiveness techniques!)
It can be valuable to take a course or use online resources to develop your ability to deliver a sales pitch strongly and articulately. As many learning resources will tell you, one of the key elements of negotiation is to aim high.
You need to ask a price for your services that you feel is justified, but add a little on top. Then when the client asks for a discount, you can parry with a rate that is closer to what you wanted in reality. Getting tongued tied or awkward during negations weakens your argument and can lead to clients either undervaluing your services or pushing you too far down.
4. Be ready to explain quantity and quality
Much of negotiating high-end rates for freelancing comes down to managing your client’s expectations. They need to know exactly what they are getting, and why it would be worth shelling out extra cash for a better or more advanced service.
Within any boilerplate text you use for proposals and presentations, always include data that shows the added value of opting to engage with you. This could include, for example, previous successes and testimonials.
When making reference to your credentials, particularly highlight the experience you have in your client’s sector.
5. Show affinity to the client
Clients are more inclined to pay higher freelance fees if they feel the service being offered is individualised and meets their specific business objectives. Having a clear and confident pricing structure is one thing, but presenting what appears to be an “off the shelf” and generic service can leave clients cold.
The more tailored and project-specific your pitch is, the more likely the client is to pay higher freelance fees for someone who “gets them” and can hit the ground running.
6. Show creativity and set objectives
Another important device in negotiating high-end rates for freelance services is a sales pitch that grabs attention. This is a balancing act. If your freelance service involves intellectual property, you don’t want to “gift” too many ideas in the initial presentation. You are selling your ability to problem solve and provide a service they are seeking. You don’t want to give that away free!
However, your sales pitch needs to provide strong hints about how effective you will be on their behalf. Add some creativity and insight into your presentation, to illustrate the worth of your high fees. Also, if possible set feasible objectives for the client to measure your services against. Clients are often more willing to pay higher amounts for a transparent, accountable and measurable freelance service.
When negotiating high-end rates and formulating confident pricing structures, the help of a specialist accountancy firm can be invaluable. Contact us for more information about our specialist accounting services for contractors and freelancers.