How To Negotiate The Rates You Deserve
Asking for money is always difficult, but it’s even harder if you’re a freelancer. A survey from LinkedIn shows that 35 percent of people feel scared or nervous at the thought of negotiating higher rates. For employees, the fear of “no” is bad enough, but if you’re a freelancer, the fear of losing a client by negotiating too high is terrifying. Plus, if you’re new to the freelance world, you might feel insecure or inexperienced about charging the rate that you want.
The simple fact is that everyone—both new freelancers and seasoned veterans—deserves a fair rate. But one thing is certain: you definitely won’t get fair compensation if you don’t even ask. Here is how to negotiate the rates you deserve.
What Is the Competition Making?
Before you start the negotiation process, find out what others in your field are making for similar work. The Occupational Outlook Handbook from the Bureau of Labor Statistics is a good place to start. For instance, this guide tells you that the 2012 median annual salary for writers was $55,940, while freelance photographers made $28,490, and graphic designers made $44,150. And to get more detailed price points, check out your industry’s market guide, like the Writer’s Market which breaks down high, low, and average fees by type of writing like catalog copywriting, press releases, magazine articles, etc.
In addition to the national median income for your field, you should also look at how prices compare in your region and within your target market. Use those numbers to create a baseline yearly income that accounts for both business expenses and your cost of living. Divide that number into your minimum per-hour or per-project rate and then develop a price list that includes a maximum fee so that you have a little wiggle room when it’s time to start negotiating.
Start Asking Questions
After a client expresses interest in your services, the first step to negotiating a great rate is to ask plenty of questions about the project. In fact, it helps if you create a list of detailed questions up front, before any contracts are signed. Often potential clients won’t fully grasp the scope of what they are asking for, which is why they tend to offer such low rates.
Once you understand what it is they want – brief product descriptions or fully-researched and sourced 3,000-word article? – how long it will take you (hint: it’s always longer than your initial assessment), what their deadline is, and how many revisions you are willing to include for your fee, you will be much more able to state the rates you deserve with confidence.
Make Your Value Clear
You can’t just state your rate and hope for the best. Well, you could, but with only a number and no information to go on, potential clients are less likely to hire you. When you name your price, you also need to make it clear that you bring a lot of value to the table. If you’re a writer, for example, let the clients know that their fee isn’t just paying for the time it takes to type an article or a piece of copy. Instead, show them how your rate covers content ideation (if needed), research, expert and error-free writing, revisions, SEO keyword integration (if it’s online writing) – and all while maintaining the voice of their brand to make them look as good as possible.
The common advice is to always start with a price that is higher than the price you’re willing to settle for. While this is true, there are a couple of things to remember. First, don’t set your top-floor price so high that clients refuse your offer without bothering to make a counter offer. Secondly, remember that your fee isn’t the only bargaining chip that you have. Rather than haggling over costs, you may want to look at the terms of your contract. Are there certain things that you can do without?
For instance, if a potential client comes back at you with a lowball offer, you might be able to say something like, “I can’t do that price, but I can offer you an extra revision beyond the two stipulated in our contract.” Or you might be willing to accept a lower rate with the agreement of a package deal – several guaranteed projects within a certain period of time – if having work on your calendar is more important than a higher one-time fee. Small concessions like this will help you keep your fee where you want it without raising your workload inordinately high.
Avoid Billing by the Hour
Most people who rely on freelancers pay by the project, but you’ll find that some prefer to pay you by the hour. Per-hour rates are a great way to calculate your project fees, but when it comes to billing, always bill by the project if you can. If you charge on an hourly basis, you run the risk of shortchanging yourself by completing jobs too quickly or worse, you might find yourself “milking the clock” rather than simply moving on to the next job.
Per-project billing also gives you a great negotiation tool. If a client is hesitant to pay a large sum on a big project, you can always break the project into smaller (and less costly) pieces. This has advantages for everyone involved: you’ll be guaranteed some money on the project, and your client will be able to build confidence in your abilities while making a lower initial investment.
Be Ready to Walk
Desperation can make freelancers do funny things – including work at rock-bottom rates. In any negotiation, be prepared to walk away if a potential client can’t meet your bottom line. Even if you don’t have enough work lined up to round out your schedule, remember that there are clients out there who will pay you the rates you deserve. It’s an odd fact of life, but sometimes saying no to a client can actually benefit you – not only will you not waste your time for pennies, but it energetically leaves room for better-paying clients to come your way.
Perhaps you haven’t built up the experience to feel secure about yourself or maybe you’re worried that you’ll sound too harsh. No matter what your personal fears are, the best way to get past them is to build your confidence – and the only way to do that is to practice! Remember, there is no such thing as failure, only lessons learned. As you build your negotiating skills, keep in mind that being a successful freelancer means that you never settle for less than you deserve.