After years of helping freelancers at all levels raise their rates and charge what they deserve, here’s what I’ve noticed about why we charge too little in the first place:
We don’t know how to charge more.
We can talk all about psychology, mindsets, etc, but what it really comes down to is not knowing how to do it.
If the $15/hr freelancer knew how to charge $30/hr — he’d do it.
If the $30/hr freelancer knew how to charge $60/hr — she’d be doing it.
And if the $75/hr freelancer knew how to charge $150/hr — you guessed it — he or she would already be doing it.
I want to show you how to do it.
Next week, I’ll share specific tactics you can use to start charging more right away. I’ll also be opening a brand new program that can help anyone 2x, 5x, or even 10x their rate.
In the meantime, let’s discuss some surprising truths I’ve learned after years of helping people like you charge what they’re really worth…
SURPRISING TRUTH #1: Pricing yourself “competitively” is a self-fulfilling prophecy.
It works like this:
You think you need to price yourself “affordably” or “competitively” in order to get clients.
But the good clients, the ones you want — the ones who are happy to pay well and give you the freedom and respect you deserve — aren’t primarily concerned with getting a good deal.
They’re mainly interested in finding a freelancer who does good work, makes their life easier and cares about helping them win. By comparison, how much you charge is almost irrelevant to them.
By pricing yourself “competitively,” you inadvertently signal to them that you’re “average” — and great clients, by definition, aren’t looking for average.
So they overlook you.
And who’s left? Only the “cheapskates.”
And even they won’t be that into you, unless you happen to be cheaper than all of your competitors. (Just like a good client’s main concern is finding a good freelancer, a cheap client’s main concern is finding a cheap freelancer.)
This is what’s known as the race to the bottom. It’s certainly one way to play the game. Or, I can show you how to play a different game starting next week.
SURPRISING TRUTH #2: When you charge too little, everyone loses.
Of course, you (and your family) lose money when you charge too little.
But clients lose, too.
Giving clients 100% of your best work is extremely difficult — and often impossible — when you aren’t excited about the amount you’re getting paid.
Just imagine how differently you’d feel waking up to do a job for $20/hr today…
…versus doing that same exact job for $150/hr!
Even though you’re technically doing the same thing, the experience would feel as different as night and day.
In the scenario where you’re earning significantly more, you’d be more excited, more energetic, and happier. Many who are in this camp schedule a short (yet productive) stretch of work, followed by enjoying the rest of your day relaxing, spending time with people you love, or just watching Netflix.
None of this is possible when you’re charging too little. You may (emphasis on may) start out excited, but it quickly dwindles and eventually dies completely.
SURPRISING TRUTH #3: Charging higher rates isn’t just about “getting more.”
Over the years I’ve noticed a stark difference between the way high paid freelancers think about pricing, as opposed to their average paid counterparts.
It’s fascinating, really: Freelancers who charge average rates see the money as something they need to fight for, and possibly don’t deserve — almost like a “tug of war” where it’s them vs. the client, each one trying to get the bigger piece of the pie.
Top paid freelancers see and even talk about their high prices totally differently. How so? They talk about their high rate not in terms of how much they are trying to GET, but in terms of how much value they GIVE to clients!
Isn’t that interesting? Far from being greedy, the higher paid freelancers are more generous, while at the same time fully expecting to be compensated well for their work.
SURPRISING TRUTH #4: The more you charge, the less competition you encounter.
It seems counterintuitive, but it’s true.
There are far more $10/hr freelancers than $50/hr freelancers.
And there are far more $50/hr freelancers than $100/hr freelancers.
Every time you go a rung (or a half a rung, quarter rung, etc) up the ladder, you encounter less and less resistance from your competitors.
The bottom of the pricing pyramid is the most crowded and least fun place to play.
SURPRISING TRUTH #5: There’s no such thing as a “cheap client.”
When a freelancer finds it challenging to find clients who are willing to pay them well, it’s easy to blame “those cheap clients.” But is that really what’s happening?
Let’s look at the facts: Do you think those clients are all working off cheap $200 laptops they bought at Walmart? (Or better yet, second-hand at a pawn shop?)
Do you think they eat lunch from the Dollar Menu at Burger King every day?
Do you think they sit on the floor because they don’t want to pay for a desk or a chair?
Obviously, if you followed most clients around you’d find they talk on iPhones, sit on very comfortable furniture, and eat well.
Of course, these people are happy to spring for good freelancers who charge what they’re worth.
But it’s up to YOU to know how to get it from them. Next week, we’ll talk more about HOW.
PS: Bonus Surprising Truth: I’ve noticed that the freelancers who are able to command the healthiest rates for themselves are also the most connected to other successful freelancers! You can do this too, right now, by leaving a comment for me and FTW readers below. You can tell us your thoughts on this post, ask a question, talk about your feelings, or even respond to someone else’s comment and make a new friend. I always drop by to join the discussion with you, and we all grow more successful together.
(Creative Commons image via Rob Lee)