How to price your freelance projects? Value based is the latest trend.
When I landed my first freelance gig, way back in 2009, it was 75 paise per word, which translates to 1 cent per word. Pathetic by any standards, but I was taking my first baby steps into the freelancing world, and just landing a gig was exhilarating.
I already had a full-time teaching job and was trying this during my summer holidays. I wanted to know if I could decently earn via freelancing and quit my full-time job. The one thing in my favor was that I had to bring in supplemental income to the household; I was not the primary bread earner.
In the last 10 years I have come a long way but still the question of how much I should get paid, or rather how I should price each freelance project, still haunts me. And I know that I am not alone. Unless you are in the topmost category of freelance writers, whom brands are dying to hire, you would face this dilemma time and again.
Like I said, it started with per word rate for me and it does so for every new freelancer. Slowly it would move to hourly or project-based rates. Hourly is an easier calculation method because it helps you in coming up with project rates, because that is what most clients demand.
Smart freelancers add 10% to the calculated price so that any negotiation on the part of the client is covered
Most freelancers, including me, use hourly rate to come up with a project rate that they can quote. The smart ones add 10% to the quote so that any negotiation on the part of the client is covered. Just because you are freelancing doesn’t mean you can be short-changed by the client. It is better to think of everything before you realize you are getting paid less than what your effort is worth.
Although clients are still asking for project rates, using a value-based rate in calculations is the latest trend among freelancers. Have I used it? Only a couple of times but let me sure you that the results were spectacular. I quoted much more than what I would have done normally, using my early rate, and the client agreed promptly. I was pleasantly surprised when the actual work took me one less time than estimated. And you can guess what ended to my hourly rate for the project!!
How does the value-based pricing work?
Basically, the idea is to charge the client not for what you are delivering but what is its value proposition for the client. For example, product description of an electronic gadget like a smartphone has higher value for the client than say a stationary item. For the simple reason that if your product description is responsible for sale of a single item, the electronic gadget would fetch more than the stationary item. So, you should charge more when you are writing product description of the latest smartphone. Simply because the business is going to earn more out of it.
Clients are paying you for what you can do for them, not what you have already done.
How to find the value you are providing
Here are some things you can keep in mind when working on value-based pricing for a project:
It’s not only about writing
It’s not only about the time you spend writing. Consider the time you spend in in understanding the requirement on the phone, talking to product managers, researching the competition, etc.
Have confidence in yourself
Never doubt your expertise even if you are a newbie. The client is not paying for how much you have done. They are paying you for what you can do for them.
What is the ROI?
Consider the ROI for the client in hiring you. ROI on an email sequence for the client will be much more than a typical blog post. So, you must charge more for the email sequence than the blog post.
What’s the client’s budget?
The easiest way to decide the pricing is to get an idea of the budget. Ask the client or your editor straight away and be sure pricing on that. Remember that they will always tell you an amount that is lower than their actual budget. After all, they also expect you to negotiate up.
Over to you
How do you price your freelance projects? What are your considerations? Do you have a strategy that could be useful to us? Share in comments below.
