There’s no clear path for pricing freelance services. But you can avoid the biggest pricing mistakes freelancers typically make.How do you know if you’re making a mistake pricing your #freelance services? Here are 5 of the biggest ones to avoid. #pricing #freelancers Click To Tweet
Pricing too low
There are tons of reasons freelancers price their services lower than they should. Some are hoping that they’ll be selected for jobs if they’re the cheapest alternative. Which, admittedly, sometimes does happen, but not as often as you might think (in fact, some clients may think you’re not serious/good/professional if you charge well-below market rates).
It’s way more likely that too-low prices result when freelancers:
- Don’t value themselves. It’s the old, “Well, if I can do it, anyone can.” If something comes easily to you, it can be hard to realize that not everyone can do it. Or at least not as easily or well as you can. It really is okay to charge for what you do.
- Don’t know their client’s needs well enough. You absolutely must be able to understand what your client needs – and how you can fulfill those needs – in order to sell in your freelance services.
- Don’t understand the value they’re providing. Instead of focusing on your services themselves (let’s use graphic design as an example), help your clients see the benefits to having you provide those services (quick turnaround of quality designs). And once you’ve shown the benefits, it’s easier for the client to see the impact and value of your work (the ability to accommodate demand spikes without disrupting day-to-day operations). Put your client at the center of the conversation, and it’ll be much easier!
Pricing too high
Pricing too high is far less common than pricing too low, but if you don’t yet have the premium experience or expertise that higher-priced freelancers do, don’t price yourself like them.
Your pricing should reflect the value of your products and services to your client.
Pricing like a temporary or contract worker
Temporary and contract workers work for a temp agency or directly for an employer, so they typically have taxes (and sometimes benefits) taken care of. And many times, temporary workers have a single client/employer.
Freelancers, on the other hand, manage their own taxes and benefits, and usually do work for multiple clients. As a freelancer, your pricing should be higher than a temporary worker doing the same type of work. This allows you to offset both your higher costs and the higher risks of self-employment.
Pricing like a consultant
Are you really a freelancer, or are you a consultant? You can call yourself whatever you want to, but these definitions are based on my own observations of the market.
Freelancers typically get 1099 forms from their clients, have some flexibility with setting their rates, and usually bill using hourly rates. Consultants, on the other hand, create proposals, bill using packages of products and services, and set their own rates and terms.
If you’re a freelancer, price your services like a freelancer, not a consultant.
Having a single rate
One size definitely doesn’t fit all! You should consider charging more for things like rush jobs, more complex work, moving a client up in your queue, and allowing additional revisions. (Don’t have a clause in your contract about the number of revisions allowed before incurring additional charges? Get one!)
I also invite you to think about a concept I call “CHF” (Client Hassle Factor). If you have a client you dread working with because they have a high CHF, why is that? Are they blowing their timelines (and yours) because they can’t get their own work done? Are they unclear about what they’re asking you for? Are they habitual revisers? Do they take forever to pay their bills?
Some of these items can be taken care of in your contract, so that’s your first line of defense. But when they can’t, consider pricing higher for high CHF clients, if you want to keep working with them.
Stay away from these 5 pricing mistakes freelancers make! Don’t price too low or too high, and don’t price yourself like a temp or like a consultant. And make sure your pricing allows for differences in your CHF.
Are you in the dark about pricing your freelance services and need help? Let’s talk.