5 Ways to Double your Rates — and Justify Doing So
This post is part 2 of 5 in our four-author series on perfect pricing and rates.
The people have spoken! And, frankly, I am a bit disappointed. FreelanceSwitch’s recent survey of 3700 freelancers also covered hourly rates by industry. (If you haven’t checked out the survey yet, it’s a must.) The hourly rates ranged from 41 dollars an hour (illustrator) to a whopping 60 dollars an hour (photographer). Wow.
How can one survive on such wages?
Before you start telling me about how people survive in third world countries on 10 dollars a month, please hear me out. It’s hard for me to sit back when I see all the reasons in the world to double these rates. How about more vacations? Less stress? A better retirement package? Helping people in third world countries?
If you have no interest in raising your rates, please skip this article. There are lots of other great ones on this site. If, however, you do wish to raise your rates, read on!
1. Be a Purple Cow — (Seth Godin’s term and book). What’s a purple cow? It’s what stands out. It’s remarkable. Most importantly, its what allows you to charge more than the brown or white cows. Everyone in your field does the same thing! Find a way to stand-out. In Seth Godin’s book, Small is the New Big, he talks about a letter he received from an orchestra director in Kentucky. While most orchestras were tanking, his was raking in half a million dollars in revenue per season. This orchestra director realized that most people were bored by just classical music, so he offered a mix of contemporary and classical music. He showed silent movies while the orchestra played the score. It was an instant hit. People who didn’t consider themselves “orchestra fans,” bought season passes. That’s a purple cow. Everyone offers the same product or service, but how can you make that into something different? That’s worth a lot of money.
2. Don’t Produce a Dead Product — You aren’t selling products or services. You are selling outcomes. Don’t sell dead products. You aren’t selling a logo. You are selling the company a basis for a brand, credibility, and professionalism. You aren’t selling a how-to manual, you are reducing employee frustration by showing them how to do it right the first time. Start looking at the outcome and sell that. Let’s say you are a web designer, and someone asks you what you do. You say, “I help my clients project a professional image on the web.” Then they say, “Oh. How do you do that?” Now, you aren’t just a web designer to them anymore. You are more than that.
3. Don’t be Afraid to Ask Questions — Great consultants and coaches are good at this. They know how to get to the bottom of an issue. But, most other freelancers aren’t trained in asking questions. For example, a client says they need pictures taken of their wedding. You go in and take them… or, you ask them questions. What’s the most important thing to you about this wedding? They may say “my groom or my bride.” Or, they may surprise you and say “I really wanted my grandma who raised me to see how happy I am. She has terminal cancer and may only live a few more months.” All of a sudden, you have a new perspective on the wedding! A unique perspective will make you sought-after.
4. Learn from the Best — Don’t take advice from your roommate about selling and negotiating. It’s not a smart idea, unless they are an expert in the field. Take time to learn from the best. It helps you solidify your credentials and it helps you learn the ropes. If you cannot see the value in investing in yourself, how can you expect your clients to see the same?
5. Talk Investment, Not Cost – Kodak doesn’t sell pictures, they sell memories. You don’t sell websites, you sell a marketing tool. A traffic ticket is a cost. A cost is dead. Value is what keeps giving. Your services don’t “cost” anything: you provide value at a fair price. When you frame your services in this manner, clients will be willing to pay more.
Shama Hyder is the chief marketing expert and founder of After The Launch. She helps independent professionals and professional service firms attract more clients. You can visit her website at http://www.AfterTheLaunch.com
Shama
I just wrote a brief article for my website titled “Extinction Happens!” (that saying is also part of my new marketing campaign). There are two different clients out there. Those that understand the value in design and building their brand – regardless of their company size. And those who view design as a dead-end cost.
I try to convert everyone into a “value added” client, but sometimes…
Thanks for th article.
I guess this post was written for freelancers working for the USA or Canada. Otherwise, I can’t agree by any means. Although the syntax is clear and politically correct, the semantics is pretty despective about the people going on the figures shown in the survey. After all, if it was a real survey, it shows that people *do* can survive on those wages. Not everybody can set wages as high as he/she wants, because not everybody has the skills needed to support that. Maybe in their future if they get better at what they do, but definitely not for a beginner or assistant freelancer.
I *do* want to set my wages higher, but higher wages find less clients (please refer to this link for an explanation http://en.wikipedia.org/wiki/The_Long_Tail. This goes for nearly every dynamical system in Nature). In my case, working as a freelance animator / illustrator in Argentina, I have been setting them higher, with the subsequent reducing of my target clients (but they are now better than before, compensating the situation). But in any case, I had an understanding of the scene both for freelancers in the “long tail” as well as those in the “high head”. I never go ‘wow’ for those still in the long tail, because I know they will sooner or later progress for better.
Very interesting and value adding post. Thanks.
Excellent!
Very helpful I think if we focusing on selling the ‘outcome’ then clients will start paying deserving creatives what they’re worth.
Thanks for a very good and motivating article.
I have been trying to articulate to my prospects and clients that I am more than a simple web designer, but a valuable part of their marketing services and as a result I can play a major part in growing their business.
NOTE TO SELF: I must make this message more prominent on my website. I tried to update it last week, but I need to do more.
An excellent article!
As a designer/illustrator I was shocked to see that the average fee for illustration was $41 an hour:O
Don’t sell yourself short! For a guide to fees please visit the AOI site and have a look at their pricing survey.
I think this article was more inspirational than a “how to” when it comes to raising your rates. Sure, there are lots of interesting ways to change the way you view your services so that you can justify a raise in rates. However, when it comes down to the nuts and bolts of doing so, most people have trouble understanding who their higher-priced target client suddenly becomes and what that does to their own business practices.
Great post.
The things you just said are very true and somr freelancers need this kind of posts a lot.
Us, the freelancers, we had no one to tell us “do that or don’ do that”, we started on our own or at least this is how I did. And this post and a lot more here helps us understand the freelancing better.
Thank you so much for sharing
Some great points here, thanks!
Very good points about raising your rates.
I am also in shock about the rates that came up in the survey – even though I am still just under the $40/hour mark. I am surprised because I am JUST under it, and going into my 2nd year freelancing.
Though, I am also surprised about your reaction to these figures. You raise excellent points in your post, which are excellent because it is information most freelancers don’t know. I only raised my rates soon after visiting this site and its wealth of information aimed at freelancers. Yes, I was on top of my game before technically and aesthetically, but it is the business sense that I was drastically lacking, and checking my figures after a year, it hurt.
Freelancing is all about gaining experience. Not necessarily in your field, but all that experience you need to make a sale, network, market yourself. I feel that in a few years, I will be in the same shock you are about how I am currently selling myself short, but I’m not quite there yet.
That was nice article with great points. keep posting.
I am wondering how writers feel the recession will affect them and fees and salary? Opinions?
Wow, I had no idea everybody’s so cheap. I charge $120/hr, and I have more work than I can handle. I’ve been thinking about raising my rates just to reduce the number of inquiries. Also been thinking about outsourcing some aspects of what I do. (WordPress theme designers, get in touch if interested).
Thanks for posting such a great article.
Its a great article. We should all value ourselves more. I am a freelance trainer and I do sell outcomes. I work mainly in women’s development and I find that continually they undervalue what they have to offer. So its likely if you are a freelancer and a women you may be undervaluing yourself even more. I can heartily reccommend substantially raising your rates as long as this is warranted by the outcomes that you deliver. I have a lot of public sector clients and I am now focusing on seeking private sector clients as they will pay better.
i was surprised at the rates too. i charge $65-$75/hour and get people telling me all the time that i’m selling myself short. maybe i’m able to get that rate bc 99% of my clients come from referrals, and they assume that since XYZ loved me and said i did a great job, then they’re ok paying that price.
Here’s how i raise my rates. When i worked for a corporation, every year i got a raise…anywhere from 3% to 18%. So i figure, in my own business, i need a yearly raise too. so give myself one. usually it’s around 7-10%. I start off by giving that new rate to any new clients i sign. Then, i tell my old/current clients that i’m going to be raising rates by $x.xx on X date, so they can be prepared. Since i’ve done a good job for them in the past, they’re ok with paying the few dollars more an hour. So it works out all the way around.
Thanks for all the great articles on pricing… It’s good to know what’s going on in the outside world.
Great stuff! I have been thinking about raising my rates for some time now. I’m just a little unsure exactly how I should go about it.
Should I grandfather in old clients, or not?
One thing that people haven’t brought up is that customer’s perception of you changes based on how much you charge.
Well its nice sharing with us! thanx
This is one of the best articles I have read on this blog so far. It definitely gives me a different perspective on how to market myself and also how to be careful in how I describe what I do. This series so far has seen that it’s more about quality over quantity.
Wow these articles are getting better and better..