How to negotiate your freelance rate in 2021 — Street Designed
Have you ever downplayed your decision-making process to simple “guesswork”? Yeah, me too.
We shouldn’t doubt our credibility in this way, but ‘imposter syndrome’ is a common sensation — one that many freelancers, in particular, struggle with.
Nowhere is this more true than when it comes to rates and fees. If you’re ever left with a little voice in your head saying “You’re charging too much” or “You’re not charging enough”… then know that you’re not alone.
There’s no quick and easy way to silence these thoughts. In my experience, it all comes with practice; the expression ‘fake it till you make it’ may be a cliché, but it’s also true!
The more established you are as a freelancer — and the more experience you have deciding, and defending, your rates — the more confidence you’ll have in the fairness of your pricing structure. And with that confidence, you can then go on to increasing your costs over time, and growing your business.
Why negotiate your freelance fees?
Before we jump into the ‘how’ of negotiating your freelance pricing strategy, let’s focus on the ‘why’.
You should always feel able to discuss a fair fee with any client, even if that figure is higher than the last time you worked together, because:
Living costs always increase
Inflation affects basically everything you, yourself, have to pay for. So shouldn’t you claim that back in your earnings?
If you were in a different form of employment, a change in pay will have been issued to compensate for this. So don’t go without!
Pay rises are standard practice
In other jobs, pay rises are used to reward great work and/or a continuing collaboration. So if you tick either (or both) of these boxes as a freelancer, you should feel no guilt in asking for a pay rise.
Your work has value
The work you provide brings your clients a significant amount of value. If you have established a long-standing relationship with them, you will know the company, branding and goals inside-out.
In other words, you are a highly worthwhile asset for them — and your rates should reflect that.
Clients are often happy to invest in great relationships
It’s easy to forget that client-supplier relationships are two-way streets. They will want to keep you working for them long-term, just as much as you want to keep your contract.
Have that honest conversation about fees, and you’ll be setting both parties up for a happy, long lasting collaboration.
How to become a pro negotiator
Deep breath! All that’s left to do now is have the conversation.
Here are our top tips for negotiating your rates, in a professional, respectful and effective manner:
1. Give plenty of notice
No one likes sudden price increases. Let your client know that, from a certain date, you are planning to raise your rates. This will give them plenty of time to consider your offer, and decide whether they are happy to continue working with you at this new price.
It’s polite, professional and considerate — so there’s no chance of them taking it the wrong way.
2. Consider a ramped approach to costing
Worried that your customers can’t afford your new pricing structure? This is where a ramped approach to fee increases comes in handy.
Rather than a quick shift to a higher fee, you could agree to up your rates a little each month, reaffirming your value in a way that’s comfortable for your client.
3. Know who you’re talking to and be realistic
The mention of a massive pay rise will most likely scare clients away. Remember, they’re trying to keep their business economical… much like you are with yours.
Again, a ramped approach is a great way to build up towards a significant change in fees over time. That way, you can increase your fees in line with the amount of new business you help your client bring in! It’s win-win for everyone involved.
On the other hand, if you’re wanting to double your income in 6 months, for example, then approaching new clients — in different sectors and/or with bigger budgets — is arguably the best way.
4. Keep the conversation positive
If you’re open and friendly, chances are your client will be too.
Phrases like “For $X/month, we’ll be able to work together on… and…. and….”, should get you a much better response than “I simply can’t make it work for less than $X…”. And by framing the conversation this way, you’ll also emphasize the value of your relationship — not the cost of it.
5. Prepare for a ‘no’ (and remember your worth!)
Some clients won’t be able to afford your new fees — or won’t want to, even if they could. So what then?
Prepare yourself for a bounce back, and know what you’ll say in return. Are you happy to keep working with this client on the previously-agreed rate? Or do you need to say, “Thanks, but no thanks” and step away?
A change in fees is actually a really great time to engage with new leads, so brush the dust off your sales pipeline and double-down on promoting your service. If one client won’t agree to your new costs, another one always will.
We’ve got your back!
Being a freelancer or small business owner is a life very few understand, unless they live it themselves!
But we’re here to tell you: never lose sight of your value and the quality of the work you do. Negotiating a raise is never easy, especially in freelance roles, but it’s important you respect yourself as a worker — otherwise how can you expect an employer to do the same?
At Street Designed , it’s our job to bring a spark of creative branding to small businesses. We’re also a freelance small business too, so we know all about the bumps in the road. Check out the rest of our blog for more of our top tips, advice and insights for working in the industry.
Originally published at https://streetdesigned.com on May 18, 2021.
