In my first post on fees, I talked about deciding your approach to the marketplace – whether you were selling a product or a service. In a nutshell, products have set prices and clear deliverables, while services deal more with intangibles.
The advantage of selling a product is that you can be dumb as a pile of bricks about marketing yourself (OK, that’s a slight exaggeration for effect) as long as your price meets market expectations. The best example of this is the $5 for 500 words (or whatever the current floor is) postings on Elance. Do enough of these – or farm enough out at $1 – and you’ll make money with little bother.
So what about selling a service? Here we have more room to either make some serious moola or fall flat on our faces. An aside is needed here. Although I come at this from a writer’s point of view, the same message fits other freelancing tasks. The ideas, with a little massaging, should resonate with the programmer who sells a cookie-cutter script for cheap, or the designer who fights the low-ballers in the set-price logo market. How do I know? These principles are meant for professionals of all stripes, including doctors, lawyers, and hedge fund managers.
So listen up, Jimmy.
Value
How much are you worth to your customers anyhow?
The accepted formula is that value= benefits – cost.
In that simple formula resides a book length conversation. It explains, for instance, why cost drives so much of what we see on Elance and other brokered jobsites. Lowering the cost automatically increases value. And that’s easy; you just change that $50 an hour to $25 or $10 or $5 – why not?
The other choice, mathematically, is to increase benefits instead. We’ll get to that, but for now, consider some costs you may have overlooked because they don’t have set dollar amounts attached. If any of these fit your situation, you can bet that clients experience these as costs.
- Time. Want to win more bids? Do things faster. The corollary is that you should charge more for rush jobs – but you already do that, right? Right?!
- Convenience. This is related to time, but it has to do with how easy it is to deal with you as a professional. Do you respond, tout de suite, when a client emails you or do you lag? What about time zones, how do you handle that? Will you Skype or take phone calls? All this matters.
If you have the slightest doubt, read some of the posts on the Elance Water Cooler where clients are griping about slow delivery or not being able to contact a provider.
- Emotional costs. OK, we’ve all had the pain-in-the-ass client. For some of those on the paying-me end, they assume they’ve bought a friend or a shoulder to cry on. Psychic vampires are out there. But from the client side, the story is the same – if you burden your clients emotionally, that counts as a cost and reduces your value. Be an asshole to your dog if you must, but treat clients with politeness and grace.
- Material costs. These costs are real expenditures that relate to the job. Do you need to buy a book, spend extra time researching something, or have to purchase rights for a program, photograph or something else? Those things directly affect value if your competition brings them to the table gratis. It’s worth thinking about if you charge for phone calls (not your time, the cost of the call) or insist on hiring someone else for part of the package.
How to increase perceived value
Since the amount you can charge is directly related to the client’s estimate of the value of the relationship, increasing value will allow you to charge more (or get more work at your current fee).
In our equation, value goes up if benefits are increased, cost is lowered, or both happen at once. That’s it. (Well, that’s it if you don’t jump markets and find different clients with different expectations.)
The more benefits you can create in your client’s mind, the better – even if you don’t raise your prices. Here’s some you might consider dropping into your next proposal:
- “I speak your language.” This is more than just solid English (or whatever language is appropriate) in your bid. Speaking their language also means tapping into the person you perceive the client to be. Are they a hard-hitting go getter? A fast talking, sales oriented marketer? A soft spoken, first-time author, so saccharine they’d make Gandhi blush?
It’s no surprise that we like people who are similar to ourselves and find them easiest to deal with. This is as true for nationality as it is for personal characteristics.
- “I can best meet your needs because I’m a solo operator and you will have my full attention.” Or “We can best meet your needs because we are a group with many eyes and minds all working on your project.”
Either version works, as long as you tout the benefits of your situation.
- Leverage your reputation with specifics. “I’ve done X before and this is what the client said about me.” The closer X matches the current job, the better. And don’t forget to push your stats – it's a mistake to assume a client will check your profile or website, that step will be missed unless your proposal first grabs their interest.Rereading what you've already highlighted when they check your profile will reinforce what you've said.
Remember, this may be the fifth proposal you’ve submitted today, but it’s the first time this client is going to meet you. I know it can be a drag, but if it isn’t worth the effort, don’t bid. Pass that one by.
And I hate to say this, but don’t lie. There’s no forgiveness for the provider caught cheating, and there shouldn’t be.
- Show that you buy into the concept presented in the proposal. Answer any questions, make suggestions and shoot for engagement. I know clients often come across as stupid or shallow. That’s tough; you have to adopt the attitude they express when seeking a contractor. If you don’t “get it,” drop it. Move on. There are few things as soul destroying as winning a job only to find out it’s sucking the life out of you because you didn’t think the matter through.
The payoff
Intentionally increasing your value and keeping your prices stable will soon get you more work than you can handle. When that happens, it’s time to refer to the first article in this series and dial the price-o-meter up a notch. But there are gifts to be had even before you raise rates.
The first thing you’ll notice is repeat jobs will go up. Your feedback and ratings will go up (unless of course, they are already stellar). You’ll also enjoy a little bit of leeway when you drop the ball – honestly, don’t we all need some slack on occasion?
The best payoff, at least the best non-monetary one, is increased confidence and lower overall anxiety. You’ll get to a point where the small stuff won’t bother you a bit and the slower times won’t cause any panic. After all, you have the game down – no worries.
Last word
If I got a little preachy, or told you something you already knew, that’s fine. The real take home is to get each freelancer to think about this stuff (or think about it again). No one can do it but you – the curse and the blessing of being a freelancer.
And hey, if you have an out of the box tip that works for you, share it!
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Great article!
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