How To Charge More As A Freelancer
Freelancers make up for over a third of the American workforce today and this figure is expected to rise to 50% by 2020. As a freelancer however, you are not just competing with this growing base of workers in the US, but also equally capable, lower-cost workers from other countries like India, Mexico and Vietnam. Given that cost savings are one of the biggest reasons for outsourcing, it may come as no surprise then that employers tend to prefer lower-cost workers from other countries to you.
Workers in America cannot compete with those from the rest of the world on price. Let us take a look at some strategies that a freelancer can deploy to win projects at a higher fee.
Value Vs. Volume
Freelancers often make the mistake of equating the hours they work with success. Success in this industry thus needs a paradigm shift in mindset. Making $20/hour for eight hours does indeed seem more profitable than making $30/hour for four. There are a couple of fallacies in this argument.
Firstly, clients who pay less are often more demanding than those who pay higher. In other words, your eight hour project may often extend by several more hours in customer support and servicing.
Secondly, working on projects throughout the day leaves you with little time for marketing and client acquisition. This makes your freelancing career extremely vulnerable since losing even one client could bring down your income quite dramatically.
When you charge more for your projects, you ultimately bring down the number of clients who can afford you. However, this also leaves you with more time on marketing which can increase your client base. In other words, spending more time on marketing could fetch you more projects at a higher fee; something that may not have been possible by charging low. Your effective income is thus likely to increase when you raise prices.
Switch To Inbound Marketing
Your freelancing fee is influenced by your client acquisition methods. When you reach out to a prospect through email or phone call, the power to accept or refuse your proposal lies with the client. This gives them the power to negotiate and could potentially tilt the balance in their favor. As the seeker in this relationship, you may end up settling for a lower project fee.
With inbound marketing techniques, the client is the seeker and you, as the provider, hold the power to accept or refuse their request. In effect, freelancers who seek projects through inbound marketing techniques are often able to seek a better deal than those who reach out to clients.
This is not always true. Also, there are dozens of inbound marketing strategies and some techniques have better impact on project prices than others. Word of mouth referrals are one of the most effective among inbound marketing strategies. Happy clients tend to share a good word about your business with their network and the clients coming your way through this strategy are more than willing to pay a higher fee. The challenge with word of mouth referrals is that they take time to show results.
If you do not enjoy a large client base yet, you may look at alternate inbound strategies like influencer marketing or affiliate marketing. Influencer marketing helps your business get a word of recommendation from people who are already trusted and followed by your target group on social media platforms like Facebook, Instagram or Twitter. These recommendations help you with establishing credibility which, in turn, allows you to charge higher from clients reaching out to you.
A freelancer’s pay is determined by two factors – their value addition to the project, and how easy it is to replace them. To earn more, freelancers must switch to projects where they offer greater value and are not easy to be replaced. Here are a few examples.
A sales executive whose job is to read out a pre-drafted script to a database of prospects add little value and can be easily replaced. However, if this freelancer is also trained in tasks such as prospect discovery and negotiation, they add greater value to the client. It is also easier for such freelancers to demand a higher pay commensurate to the value they bring to the project.
Virtual assistants responsible for reading and responding to client emails have a very limited set of skills. Such freelancer could however bring more value to the table if they were also capable of customer service.
In each of these cases, adding a little bit of skill can help you dramatically improve the value you add to the project and consequently, your pay.
It is also worth looking at your skills from the cost/profit perspective. Every business has a cost center and a profit center. Customer service and administration are essential costs to running a business. They do not contribute towards top line growth. On the other hand, sales and marketing departments are considered profit centers since they directly contribute to growth. Typically, clients pay more for profit center jobs. Investing in such skills could help you raise your payout.
Showcase Your Competitive Advantage
In addition to all these strategies mentioned above, the most effective way to win projects at a higher fee is by showcasing your competitive advantage. Do you live in the same time zone as the client? If you live in the same city, you could also offer to have face-to-face meetings every fortnight or so. Your industry expertise may come in handy for some job roles and it is worth demonstrating these skills in your application. Build a profile of the average job applicant and identify the factors that make you a better candidate. Emphasize on these factors in your application.
Pricing is a major factor in a client’s decision making process. As a freelancer, it is your job to make your prospective client look beyond the cost towards other factors that shows you in favorable light. By building your skill sets and experimenting with innovative marketing strategies, you may be able to succeed in securing projects despite charging higher.
Author Bio: Anand Srinivasan is the founder of Hubbion, a free suite of business apps and resources. Check out their new meeting room booking app here: https://hubbion.com/meetingroom