One of the most common mistakes made by new freelancers is pricing their service too cheap. You need to bear in mind that you are going into freelancing in order to make profit, so selling yourself too cheap rarely makes sense. This is particularly important for those of you who are planning to dip your toe in the water of freelancing with a view to really making a go of it if things go well.
Getting your pricing right is one of the key things that will determine whether or not your business is a success. Having said that Marc showed you in a separate article how one of his freelancers, Kai, went from number 30.000 on a job site to number 1 by initially competing on price, so it is an option, but not the one I chose.
The great news about pricing your service as a freelancer is that you have a whole lot of flexibility in how you work it out, but this does mean that particularly at the start it can seem like a real minefield. The three key elements you’ll need to take into account are: your competitors’ prices, the value you add to your potential clients businesses and how you value your time. Because the costs associated with freelancing are relatively low, there is generally little value to be gained in trying to work on a cost-based pricing strategy.
Checking out your competitor pricing is relatively easy and a bit of time spent online and on the phone will give you a good overview of what freelancers who have positioned themselves similarly to you are charging. When you look at your competitors’ prices, you should aim to establish the band of pricing that’s being charged across the board. Once you have that information, you should be able to establish where you position yourself in relation to those competitors and that will give you a good idea of what price the market is likely to bear.
In terms of tweaking your pricing above the market average, an important factor is the perceived value you add to your potential clients’ businesses. There is no getting away from the fact that clients will pay more for a service that has “bells and whistles” rather than a straight service. That said, this only works if you get the chance to sell those bells and whistles in your sales process and convince your potential clients of their value when you speak to them.
Finally, you need to work out how much you want or need to earn for the effort you put into your work. Again, many freelancers trip themselves up on this one. They might decide to charge £30 for a 500 word article, which is a good price from the client’s and the freelancer’s point of view, however, if this is a one off, there’ll be a whole lot of peripheral work that needs to be done, making it an unreasonably low price for a professional piece of writing and all that goes with it. While at the outset, you might be glad to get your hands on any work you can, you should try to upsell or establish a longer-term relationship whenever you can so our price becomes more attractive.
Don’t ever be shy when you’re speaking about the cost of your service with a potential client. If you’re good (which you’ll have to be in order to be successful), you’re selling not only your time, but your experience and your expertise as well. This costs money and if you’re good at what you do, you’ll have your clients coming back for more, again and again.