Getting Your Best Rate
You’ve done the footwork. Your portfolio is online, with shining examples of your best work. You’ve put out feelers on all kinds of job sites and made your presence known to recruiters. Now you’ve gotten that first email or call from a potential client and you know that what comes next is a negotiation for your best rate.
Before you go to the table to negotiate, what you need is knowledge about what your peers are charging, what the client’s market looks like, and what specialities you bring to the table.
Your job at this point—before you ever utter a number to the potential client—is to make sure that your prospect understands the whole scope of what you’re bringing to them as a service provider. You need to establish a base rate for yourself; a rate you won’t negotiate beneath under any circumstances, no matter how nervous that makes you. Keep in mind that a “no” to any particular rate isn’t a mark against your quality.
Many potential clients won’t yet have the knowledge to understand the reasoning behind your rate, or don’t really grok the value of the proposition. You need to make that clear to them first and foremost.
Part of the real benefit of an internship is gleaning exactly this kind of specific information.
If you’ve interned or are interning don’t forgo the opportunity to talk all about rates. Part of the real benefit of an internship is gleaning exactly this kind of specific information. If you’ve already been involved in a particular business sector or have a good portfolio of commercial work, you may already know a lot about pricing and rates, but it’s always good to check in. For starters, talk to people in your professional circles. Chances are, you already have some good contacts but if not, check in with gatherings like Creative Mornings or seek out new groups on Meetup.
Don’t worry about asking direct questions about what your peers charge. Some might be gunshy with specifics, but most people will jump at the opportunity to talk up their business. Sites like Comparably can help too, providing rates alongside geographic information. And any time a recruiter contacts you, even if their job suggestion is not entirely appropriate, you’ve got a great opportunity to ask about going rates and skills that are popular in the market.
The point of having this information is to give you confidence in your base rate; the more sources you have for this confidence, the better you’ll be able to negotiate. Keep notes, and watch for variance and fluctuation between the rates you hear about. You want to find a range and aim for the high end. Your lowest base rate should reflect your own cost of living as well as fixed costs that you might have—things like professional membership dues, software services you subscribe to, and depreciating equipment.
In addition, when you look at a peer’s rates (online or otherwise) try to take into account what they deliver as a product. Is a photographer just delivering a zipped file of raw photos? Are they titled and indexed and color corrected? Are they delivered via an extranet with approval and cataloging tools tools for the client? These are all tools you can use to potentially increase your rate.
Each of these levels of service is something that should factor into a rate. Each is an opportunity for you to make your prospect aware of how you are different, and the more you can elaborate on the services you provide, before you name a specific rate in a negotiation, the more you improve your chances of securing a higher rate. Ramit Sethi, a highly successful mentor on negotiations, describes the specification of a rate as the kiss at the end of date. “Everything from the venue to the timing has already gone well and your confidence should be high—and if it’s not, it’s not the rate—something else in the calculation is askew.”
Know the details before you negotiate with a client.
Once you’ve established that, you need to look at what you’ve learned about your prospect’s market factors. If the real estate market in your prospect’s area is hurting, it may be harder to find clients looking to pay top dollar for photography of high end properties, or looking to refurbish their old web site. Some business sectors, like those focused on weddings or tourism are seasonal, and knowing the timing of those seasons is critical. Know the details before you negotiate with a client. These details are critical if only because greater demand on your prospect means they have a greater demand for resources.
Market considerations should act like a multiplier (a bonus or discount) on your base rate and not as a basis for your rate. Again, your base rate should come first from what you know about your own costs and what your peers charge. Any market indicators you can glean should act as signals for how much you should be willing to negotiate. High tide in a market for any particular business sector you’re focused on means you shouldn’t negotiate too much. For one, if demand is high, then your competition should be charging more, but also, good markets are multipliers because there will be more potential clients looking for your services—there are more fish in the sea per se.
Again, the point of discussing all of these factors is not to generate an algebraic equation that gets you to the perfect rate, but to give you confidence in negotiations. The secondary purpose is to give you a range in which to negotiate, just so that you have some quantitative idea of what high and low are.
You’re not there to plead for your rate; rather, you’re there to inform the client of your value. It’s a bit of an oversimplification, but the more bullet points you hit that inform the client of the value you present, the better chance you have of getting your best rate.
So don’t be worried about not discussing a rate with your prospect right away. Always be prepared to tell a client that you’re not ready to talk about rates, that you need more information. There’s an old adage about lawyers that applies here: a new lawyer will answer your question about the law, a good lawyer will tell you she’ll get back to you.
The most important take-away here is don’t jump into naming a rate until you’ve discussed all the variables with your prospect.
There’s more—volumes, in fact—to be discussed with regard to negotiation techniques, but here in the beginning of the negotiation, the most important factor you can have on your side is how much you value your skills, how your unique deliverables set you aside from your competition, and knowledge about your prospect’s needs. Change your rate according to the environmental variables you can uncover, and don’t negotiate below your fixed costs as a freelancer. The most important take-away here is don’t jump into naming a rate until you’ve discussed all the variables with your prospect.
Make your value to your prospect explicit and feel free to repeat the points of value you bring. The best thing you have going for you in a negotiation with a new client is confidence—and in the case of repeat clients, you should have more confidence for having previously delivered a finished product.
Doing the homework about a potential client can only make you more assured of the value you have to offer. In every case, the more you investigate your client’s needs and really understand them, the better prepared you’ll be to talk about the relevant services and special skills that will get you your best rate.
R.E. Warner is a writer of story, poetry and code. He enjoys putting symbols in orders that make sense to both humans and computers.
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