A short guide on how to raise your freelancing rates by delivering more to your clients by Brennan Dunn. It's available at http://doubleyourfreelancingrate.com/.
Don't confuse personal vanity with value. For example, you want to buy a shiny red car sports car in your 40s to look awesome. If a salesman came by and try to sold a car to you by pitching:
- factories are LEED certified
- workers given more time off than legally required
- use innovative manufacturing process
- car is lighter due to absence of heavy metals
The salesman is selling features instead focusing on what you really want.
Clients don't hire you due to your technical skill. The number one reason that clients hire you:
Clients want us to make them more money than they spent on us. The end goal of our services has nothing to do with technology or our craft.
Dunn segments clients into two groups: the pragmatic and the dreamer. Pragmatic clients are quantitative and specific. These are the clients we want. Dreamers talk in non-specifics and ask for endless revisions. They prefer experience - experience of sitting in meetings, feeling productive, getting status updates communicating with you, etc... Your value to them is being responsive/available.
Try to fix client's underlying problem. Don't just patch the sympton.
Dunn argues that you shouldn't price using cost-plus (figure out cost of your time, then tack on some value for profits). Don't price by the market (charge relative to geography/experience). Price by value. Quantify how much value you create for your customer, use that to justify your pricing.
Don't be afraid to charge. Dunn priced this ebook at $29 and $39. The higher priced version had higher conversions. A high price signals that a product or service is worth more.
There are two factors to consider: experiential factor and economic factor. The experience is important. Are you a professional with a clear plan of action or are you swayed whichever way the wind blows? Having a clear plan of action and being responsive earns more respect. The economics is just as important. Can you earn your clients more money?
How you structure transactions is also important. You can charge hourly, daily, weekly, or by a fixed fee. Fixed fee projects are dangerous, the scope can grow quickly. Clients may not know exactly what they need and will ask for large numbers of revisions.
Clients have two types of budgets: constrained or arbitrary. Constrained budgets are determined by factors like money in the bank, department's annual budget, and tolerance for risk. Arbitrary budgets are determined by prior research clients do for the "going rate".
To get a premium rate, freelancers need to move beyond commodity of their crafts.
Dunn uses the example of a restaurant owner who wants a new website. Instead of focusing on technical terms like CMS or Google Maps, focus on the experiential and economic factors.
- Ask why the current website is insufficient?
- Be responsive and dig deeper to find the underlying issue.
- Quantify key metrics like number of walk-ins, sales, word of mouth, referrals.
Some good starting points that Dunn offers:
- Why do you want this built?
- What are the economic implications of it not being built?
- What is the economic potential of a successful completion?
- What research went into determining the necessity of this project?
- Why weren't you able to do this yourself or internally?
- What are the time constraints and why?
- How and when will you be able to determine the success of this project?
After your client answers these questions, put together a roadmap of tasks ordered by those with most immediate value to the business. Then estimate complexity. Ask the client to determine which task to include in this contract to fit their budget. Negotiate on scope, not on your rate.
This week:
- determine new rate based on lifestyle
- redo sales site (copy, headline, call to actions)
- determine sales strategy
- determine tactics to handle negotiation
- figure out how to deliver more value to clients
Figure out MoneyPerWeek (how much you need per week to live), WeeksOff (weeks off per year), HoursPerWeek (hours to work per week).
MoneyPerWeek * 52 (weeks) * 1.5 (taxes, savings)
------------------------------------------------
(52 - WeeksOff) * HoursPerWeek
Copy is the most important thing on a website. Sell to your clients using experiential and economic factors instead of technical details. Make your call to action stand out. Don't make it painful to contact you. Educate your audience. One of the best way to gain an audience is by becoming an authority in your field.
Some tips:
- use short headlines that promise something
- people skim instead of read, use headlines and lists and short paragraphs
- include catalog of problems you've solved and how you solved them
- put rate on homepage to weed out cheap clients
- make contacting as painless as possible
- have a personable biography
- augment technical offering by how/why it will affect client's business
Your proposal should include the roadmap along with a section that details:
- what's it like working with you
- include your rate
- estimated time/cost
- requirements you have like response time
Put the ball in their court in terms of budget. Let them cut down on scope to reduce the budget.
Always remember, your client wants to minimize costs and maximize returns. Research the client before the meeting. Bring up roadmap ideas to show that you care about ROI. Work with them to put together a roadmap instead of saying yes to everything.
Be confident and don't negotiate on your rates. Negotiate on the scope if you need to.