When I first started freelancing, my objective was to price in a manner that would get an immediate “yes.”
I wanted to be low enough that a VP at a corporation could just expense me to his company card without running my quote through any approvals up the chain.
The problem is, it worked…
Over time my business was growing wide, not necessarily deep. I took in a lot of new clients because I had to.
Individually they weren’t worth much to my bottom line, so I had to make up for it in the aggregate.
I was coming out of a period of inconsistency, so the constant work felt great…
But just as I had years ago in my small room with the air mattress, I began to recognize that I was not pricing sustainably.
I emailed the head of an organization that had me on retainer and let them know I was doubling my rate for the health of my business.
She said she understood and that the new rate still worked for them.
Over the years my value to their organization had increased, my expertise had increased, my overhead had increased.
My rate had not.
I see this a lot in the freelancers I work with today…
They punt on pricing for their value because they haven’t taken the time to understand the concept, or they’re uncomfortable having the discussion with potential clients.
They choose to make the most important factor in their price their input and overhead (hours and any costs associated with the product).
It’s easy cuz it’s the same for every client.
When in actuality, your value is the most important factor in your price, and that changes depending on the client →
The problem:
Your pricing is based on what you think is fair, or what you see other freelancers charging.
It’s a race to the bottom competing with other freelancers who are undercutting your prices, you close less sales, and you have to take on too much work to try to make ends meet.
The benefit of solving it:
You attract clients who value your work and are willing to pay for it.
You close more sales.
You can build a sustainable business and still have time to invest in growth and lead generation.
Why what you’ve tried has failed:
You don’t know how to include your expertise, the quality of your work, and the results that you can deliver into your price.
You are not positioning yourself as a strategic partner in their business.
Here’s how to solve it:
Charge according to the value of solving each solution for each client.
When you price your services based on the value you provide, you position yourself as a high-quality service provider and attract clients who are willing to pay for that value.
As a strategic partner, use this formula to calculate the price of a project:
Let’s define each →
Overhead:
How much it costs you to do a thing- time, equipment, software, sub-contracts, costs associated with the project.
Value:
How much of the project’s success is attributed to how good of a job you do?
You're not just selling your time, you're selling your expertise and experience.
Expertise:
take into account the efficiency you bring to the whole project, how you get top-level things done quickly, how polished you are, how many of these have you done before, your network, etc.
Price:
Put your overhead, value, and expertise together and this is what you get.
This is the number you cannot go below for a project.
So the inevitable question I’m sure you’re asking now is “how do I determine my value to a specific project?”
You ask!
When you’re on the sales call, spend the first 70% of the conversation asking them questions like:
“Where are the goal posts for this project?”
“Why is this a priority now?”
“How do I know I’ve gone above and beyond for you? What are our success metrics?”
“What are your concerns, what are you hoping to avoid?”
With some practice, this will become muscle memory and an easy discussion to lead.
And once you raise your rates and get your first “yes,” you’ll see there’s no going back!
Best,
Jamie
Resources to help you escape the feast-or-famine freelance cycle:
→ Build a $10K+/month freelancing business with my proven 3-pillar system inside The Freelancing Program ($59/month).
→ Get the competitive edge with daily templates, frameworks, and freelance market intel from Workforce 3.0 ($4.99/month).
→ Hit your freelancing goals this year with a customized, step-by-step game plan that we’ll create during a focused 1:1 coaching session ($750) with me.
