Most freelancers start out charging low rates or even offer work for free in an effort to boost their portfolios. Once you’ve been in the business a while, you should theoretically be able to raise your rates and start charging what you’re worth. Unfortunately many creative freelancers lack the confidence to do so and get stuck in a low rate rut. But we’re here to tell you right now – it’s time to start charging what you’re worth.
Yes, it’s fair that people new to the game should charge less for their services as they have less experience than a pro. But offering work for free? There aren’t many other industries that have a culture of doing this. Have you ever had an electrician tell you it’s on the house because they’re new to the trade? Or a pizza delivery person give you free food because it’s their first night on the job (we can but live in hope)? This is just the first in a long line of examples that prove how creative freelancers are undervaluing their worth right from the get go.
There are freelancers out there who are charging rates that would make your head spin. And they’re not doing much more than you are. There’s no mystery to it. They’re simply charging more. And there’s no reason you can’t either.
There are only two legit reasons for charging a paltry rate:
1: You’re a newbie
2: You suck at your job
(If the reason is number two then there’s no much we can do to help…)
Shout it out loud – My skills are valuable!
Freelancers often feel their work is ‘easy’ or something that anyone could do, so they don’t feel like they can charge a lot. Stop. You are undervaluing yourself and have a severe case of imposter syndrome. This line of work comes easy to you because you’re a natural and have a talent.
As a graphic designer I was recently asked to assess a poster design for a friend, who wanted some advice on how to make certain bits of text stand out. I felt slightly embarrassed of my answer because the fixes seemed so blatantly obvious to me. I made some, what are to me, really basic, common sense suggestions such as making the text bold, creating more space between the areas he wanted to draw attention to and using colour. His reply was “WOW! We never would have thought of that and now it looks amazing!”. So don’t forget, your skills are a talent and not everyone has them, no matter how easy they seem to you. And people will pay big bucks for that stuff.
Yes, the world and his wife own a copy of Photoshop these days. But that doesn’t make them all talented designers.
Cheap rates could harm your business:
So we’ve established you’re a talented individual in your own right and there’s actually no good reason for you to be charging a pittance for your services. You might think that having cheap rates means clients will choose you for their projects. There’s a grain of truth in this. But the clients who want dirt cheap freelance work probably don’t care about the quality of it, which is a little bit soul destroying. Unless, of course, you’re aiming to be a budget solution.
Clients who do value the quality of their work rarely go with the cheapest option. To the consumer, price is an indicator of quality. Think of luxury car ranges like BMW, Mercedes, Audi etc. People who want quality will pay more.
So, if your rates are bottom dollar, this could actually be putting clients off. It raises suspicion. “Why is this person so cheap?”, “What’s wrong with them?”, “Do they not have the relevant skills?” etc. Make sure clients aren’t thinking this about you.
Charging more could help you get more clients:
Sounds counter productive. But as I explained above, higher rates are perceived to be an indication of quality. You could be putting off tons of clients who are looking for a quality professional. And that’s what you are, right?
A couple of years ago I was invited to submit a proposal for a freelance project. The project was so exciting, I really, REALLY wanted to work on it. To ensure I won the work I offered a stupidly low rate, thinking that the client would naturally go with the cheapest option. They didn’t. They went with the more expensive guy. And why? My rival didn’t have any more experience than me or better skills than me. It’s just that his rates were higher so the client assumed they’d do a more professional job. I’ll never make that mistake again.
Clients associate a higher rate with professional experience, which in their minds means you’re better at delivering work. Just make sure you can live up to the expectation. If you can’t, it’s not time to raise your rates yet.
Learn how to give value to your client:
Take a deep breath now, I’m going to hit you with some hard facts: Your client doesn’t hire you to make a pretty website or an engaging piece of content. They hire you to get them more customers and grow their business.
Learn how to give value to your client by seeing the bigger picture. The client wants a website. But why? They want a website so that they can get more customers. If you seek out the why in every project you do, you’ll instantly give more value back to the client, enabling you to charge more.
Brennan Dunn talks about this in more depth in his article Why Your Clients Want To Pay You More. He says:
“Think about the work you do, and how you typically present yourself to clients. Do you think of yourself as a designer of designs, a programmer of machines, a writer of words, or something else?
Do you sometimes forget to step back and look at the big picture, and realize that your value is more than the going rate for freelancers like you — if you would only stop focusing so much on what it is you do and start looking at what effect you have?”
Ultimately, the client doesn’t really care about the nuts and bolts of how you will make their website. They care about how the work you do will affect their business. This should be an important part of your sales pitch and will help you win more clients.
Make sure you can justify it:
So you’ve decided to increase your rates. It’s not as easy as just plucking a figure from the air (as much as you’d like to start charging $1000 an hour). Your rate needs to be in line with what you can deliver. If the client assumes you’re a quality professional you’ll need to live up to this expectation.
You can show off your professionalism by demonstrating your skills and showing passion for their project and business. The client is looking for the full package. If you can offer more than just a functional piece of code, or a well-written article etc, your client will be happy to pay you more.
How to tell existing clients:
This is the big one. The main reason freelancers don’t raise their rates is they don’t know how to broach it to existing clients. Freelancers assume that any increase in price will send their clients running for the hills. But if you’re clever about it, this needn’t be the case. Remember, all businesses raise their prices over time. It’s perfectly natural.
A logical, rock-solid reason is needed for introducing higher rates to existing clients. For example; keeping up with inflation, haven’t raised your rates in a few years, covering the cost of new equipment, you’ve become more qualified.
Be confident in your delivery whether it be face to face or in an email. Don’t over-explain your decision as this will make you look uncertain and possibly like you’re trying to fleece them. Remember to be open for discussion.
If you avoid telling existing clients your new rate you’ll fall below market value and eventually won’t be able to make ends meet.
Rates aren’t permanent:
Rates can be raised and they can always be lowered back down again. You can have separate rates for separate clients. For example, the nice lady down the street who wants a logo for her flower arranging business can’t afford your $200 an hour price tag. But if you really want to help her hour there’s no harm in charging $15. Similarly, if a faceless corporation ask for your services there’s no harm in raising that $200 to $400.