9 Tactics to Raise Your Freelance Rates | John Morris | Skillshare

9 Tactics to Raise Your Freelance Rates

John Morris, I help freelancers get clients.

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11 Lessons (26m)
    • 1. Price Is Not Objective

      1:16
    • 2. 5 Ways to Price Your Services

      1:09
    • 3. The Right Tool For The Right Job

      3:54
    • 4. Fixed-Price Projects

      1:00
    • 5. Monthly Retainers

      1:00
    • 6. Increasing Perceived Value

      0:47
    • 7. Credibility

      2:57
    • 8. Scarcity

      1:54
    • 9. Proprietary

      2:19
    • 10. Packaging

      3:48
    • 11. Pricing Strategies

      5:42

About This Class

In this class, I'll show you nine different tactics you can use to raise your freelance rates. Tactics I've collected over my 15-year freelance career that help you increase the perceived value of your services so you can increase what you charge -- without adding extra work for you.

These are things that you can implement immediately -- as soon as you're doing watch the class -- and can help you increase what you charge for your services.

WARNING: These aren't gimmicks. So, if that's what you're looking for, this class won't be for you. These are the fundamentals of crafting a high-ROI offer and increase the perceived value of your service -- which is the only legitimate way to charge more.

Transcripts

1. Price Is Not Objective: Price is not objective. What I often see with freelancers is they're searching for the price. What is the price I can charge for what I do as if there's some objective intrinsic price or value to your service. There isn't. Pricing is based on value, how much the client values, what you're offering and value is subjective. Your service will have a different value to different people at different times. And just so you know, this isn't some dude on the internet saying this, it's a widely accepted theory of economics called the subjective theory of value. And so again, there is no objective price to what you can charge. Instead, what you have is what's called the market rate. It's what other people who offer similar services do you tend to charge? You're only going to be able to charge any small range around that market rate unless you have compelling reasons why you're worth more. And that's where the magic happens and the fun begins because we can play with our service and what we're offering in strategic ways to be able to charge be on that market rate without adding a ton of extra work to what we deliver to clients. And that's what I'm going to show you here. So if your game, let's go ahead and dig in. 2. 5 Ways to Price Your Services: Quickly, just to set some context, we need to talk about the five ways you can price your services. The first one, obviously, hourly rate. Everyone knows that you have a daily rate which is little less common but still out there. Monthly retainer. You have fixed price projects, of course, and then you have value-based pricing. And just real quickly on value-based pricing because a lot of people get it confused. The idea is to charge a percentage of the real-world value you deliver for our client. So if you can demonstrate that what you do will bring the client $50 thousand over the next year and your fee is 50%, Did you would earn $25 thousand for the project. That's the idea behind value-based pricing, which obviously is only going to work in very specific scenarios because it's like working on commission. But it can allow you to earn some sky high fees if what you do ties directly into a tangible result like that. Anyway, it's less common, but it may apply to you. So I wanted to cover it with that said, here's some things that you can do to start charging more simply based on an understanding of the types of pricing and when and how to use each one. 3. The Right Tool For The Right Job: The first principle, as we'll call it here, is the right tool for the right job. So for example, for hourly rate, this is good for ongoing deliverables, unclear scope, and if you're a new freelancer, the problem that a lot of freelancers run into here is the end of they get used to charging an hourly rate. And then they end up charging an hourly rate for fixed deliverables that have a clear scope. And as they become, even as they become experienced freelancers, they just kind of stick with the hourly rate. If you do that, you're costing yourself a ton of money. You could be making more money, charging a fixed price for a fixed project that has a fixed scope. Or by moving to a monthly retainer. As you get more experience and clients will be willing to do that with you. So again, the right tool for the right job, if you just stick with our Lean, you never think about any of the other types of pricing you can do. At some point in your career, you're going to start causing yourself a lot of money and that may be what's happening to you right now. Of course, fixed price projects, these are best for a fixed scope with a finite deliverable. Now the trap here is sometimes what I'll see is freelancers will charge a fixed price for something within unclear scope or a scope not well-defined. If you're gonna do a fixed price project, you need to define the scope clearly and definitively because if you don't, you're setting yourself up to have the client escalate on you and when they do them feeling justified not paying you more because you didn't nail down the scope to start with. Okay. So again, it's a lot of this revolves around scope, but if you have a fixed deliverable, so if you're a developer and you're building a website for somebody, you should be charging a fixed price, not an hourly rate. If you're doing ongoing web development support, well, then it makes sense that you would do an hourly rate or a monthly retainer. So again, right tool for right job. Of course, monthly retainer. This is actually the best for ongoing projects and ongoing deliverables if you have the clout. So as you progress in your career, you should be moving from our hourly rates to monthly retainers. And if you have the clout, if you have the experience and you can show clients that you know what you're doing. They're going to be willing to do it because a lot of a lot of clients already pay employees and a monthly retainer is very similar to how they pay their employees. So the actually a lot more open to it than you might think if, again, you have the clout to prove that you can do good work for them. And then of course, value-based. This is for anything that ties directly to the bottom line. And getting the trap here is sometimes I will see people who are charging a fixed fixed rate. So they're charging like it's a fixed price project for something that ties directly to the bottom line. So if you're a copywriter, if you're doing anything related to Facebook ads or Google ads or anything along those lines. Even something like SEO where you can, it's real close. You could show that, hey, I could boost your traffic by a 100%. I could double your traffic and you can tie that then t2, that means you're gonna get more leads, Ex, more revenue, et cetera. If you can make that compelling case, charging value-based, cuz you're just gonna make a ton more money that way. And you're providing the client with something that's incredibly valuable to them. And a lot of them will be more open to it than you think because they don't have to pay a big fee up front, they only pay if you make them money. So it can work out for them as well. So again, going back to all of this, the principle is the right tool for the right job. If you fix that, that can allow you to maybe today as soon as you're done watching this, be able to go and change something about what you're doing and double or triple what you're charging. 4. Fixed-Price Projects: The next principle then is just simply having a fixed price offer. Because having a fixed price offer six sets the context for your other pricing, hourly rate or your monthly retainer. And it makes it easier to charge more at the juxtaposition between that fixed price project that might cost five or seven or $10 thousand, makes your hourly rate of 50 or 75 or a 100 seem much smaller in comparison, or a monthly retainer of two or three or $4 thousand, much smaller and contained in comparison to that big fixed price project. So it sets that context and makes it easier for you to charge more on your other things. So simply just having it, I can help you to charge more on your hourly rate and everything else. Plus it gives you a big win, right? When people hire you for a fixed price project, you get kind of a windfall of cash and a windfall of money. So it gives you a way to have a big win and tap into that high-end market out there that exists. 5. Monthly Retainers: The third principle here then is to move to monthly retainers and fixed price projects. So your goal is to get off of hourly or daily rates and move only to offering monthly retainers and fixed price projects because that is the sweet spot to be able to work on any kind of project. So you can work on a fixed, a fixed project or an ongoing deliverable. You can do both, but you're able to maximize your earnings. That's really where you want to get as a freelancer. Right now. Those are what I would call mainly hedges. So these are mistakes you might be making that you can fix. That'll help you to immediately charge more. So think of them as leaks in your boat. If you plug the leaks in your boat, then that's just going to raise the amount that you're gonna be able to charge. But now I want to talk about some things that you can do to maximize what you're charging. So once you have your leaks plug, How do you take that next step and start charging significantly more for your services? 6. Increasing Perceived Value: The big secret here as what's called perceived value. The only real way to consistently raise your rates is to increase the perceived value of what you offer. I wanna say that again, just so because it's so important, the only real way to consistently raise your rates is to increase the perceived value of what you offer. In fact, if you really want to dig in on pricing and maximize what you charge, then your goal should be to become an offer engineer, someone who is a master at tweaking and adjusting what you're offering to clients to maximize your profit. So with that said, let's talk about some ways that you can crank up the perceived value of your services so you can maximize what you make. 7. Credibility: And the first one is credibility. Now this is all about you. The more you do, the more credibility established, the more you can charge. But be careful because there's a trap in the way people think about this. This isn't actually about talent. Talent is the cause that allows you to get credibility. But when you're presenting your service to potential clients, it's about the effects. Credibility is the effect. And there are some specific effects that are most effective in increasing the perceived value of your service. And the first one is volume. So and the more you've done of something, the more credible that you'll you'll see him, you'll notice how I often mentioned that I'd been a freelancer for 15 plus years or that I've taught 26 thousand free launch freelancers how to start and grow their businesses. Those are appeals to volume. So as you go in your freelance career, you want to take note of these things. I've worked on 60 different websites are a 100 different website or 500 different websites or I've done 700 LOCOS or whatever it is, you want to just sort of make note of the volume that you've done over the years because as the accumulates, that's going to raise your credibility. Second is variety. So things like I've worked with clients from industries like or I've helped clients in 52 countries. You've probably seen things like that. These are all appeals to variety and makes you seem more well-rounded and like you can handle a client's unique situation because they all think they're situation is unique. And again, just as you move in your career, just sort of take notes, note of those things. If you're working with people in different industries are from different countries or whatever it is. Anything that speaks to variety, just sort of make note because again, the more that accumulates, the more that's going to raise your credibility and that's going to tie directly into what you can charge. It sounds small, it sounds simple, but when you add all these things up, it created increases the perceived value, which means you can charge more. All right, the next one is a name drops. So again, I often mentioned that some of the clients I've worked with include arm and more and Andre chaperone, Lewis Howes, Michael Hyatt, Tim Ferriss Ink Magazine, et cetera. Now, those may not mean anything to you, but in my market, they're the big dogs that everybody follows. So a client will say, and I've had clients. Clients literally say this to me, man, if so and so hired you then then I can hire you. You must be good. Again, that will crank up the perceived value of what you can offer. So that's three things that you can do. Now of course, that's all just credibility. But here's a pro tip. This is about as far as most freelancers go. And this stuff works. But there's a bunch more that you can do to crank up that perceived value. So now what we're getting into his unique territory, doing things that 90% of freelancers are going to do, which is going to give you a huge advantage. 8. Scarcity: The next one is scarcity slash access. So I'll illustrate it with an example from my own career. Several years back, I worked on a project for Michael Hyatt. Again, you may not know him, but he's a pretty famous blogger and the leadership space. Several, several of his books have been New York Times bestseller, bestsellers and that kinda thing. Anyway, I built a website forum and after I was done, a bunch of his followers started asking him about a site and how, how he built it, who did it, et cetera. Because they wanted something similar. Well, that lead them to me. And I found myself getting approached almost every week by people wanting me to build them a site like Michael's. Now the thing was, I was the only person on the planet who could do that. Literally. Others could try. But I'd built a site from scratch myself. I was the only person who already had all the code and knew all the ins and outs, et cetera. That is scarcity. And so I was able to charge $3 thousand for about four to five hours of work, putting these sites together for people, that's six to $750 per hour. And it's because people weren't paying for my time. They were paying for my access, access to something that I had that they couldn't get anywhere else. And that is one hell of a way to crank up the perceived value of what you offer. So just look at what you do and see if there's something that is scarce about what you do or something you can legitimately make scarce. You don't want to make things up. But if there's something legitimately scarce or that you can make scarce about what you do, then you wanna take advantage of that because it's one of the easiest ways to charge. Significantly more people will pay you for access to something that they can't get anywhere else or it's hard to get somewhere else, or it's very limited availability with other people, they'll pay you for that. 9. Proprietary: The next one is what I call proprietary. So another way to significantly increase the perceived value of what you offer is if you deliver, if what you deliver involves some kind of proprietary method or process. So if you're building websites, they're not just getting a website, for example, they're getting an SEO optimized website using your proprietary ranking method. Now, some people prefer referred to this as what's called the iPhone principle. So here's the analogy. Let's say you're selling your iPhone. Now, if it's just an iPhone, Well, it's not worth any more than any other iPhone. So why buy it for mu y painting more for it than any other iPhone that's being sold. There's no reason to. But let's say that I told you that my iPhone came loaded with 500 of the latest blockbuster movies, movies that cost 15 to $20 apiece, and also had 1000 of the latest hit songs on it. It also had 50 different premium apps that cost two to $3 a piece. Plus I've also included my premium freelance freelancing pricing training that normally sells for a $197. Well now my iPhone is no longer just an iPhone. It's a special iPhone. And there's a solid reason why I'm asking an extra $200 for it. That's the iPhone principle. And that's what we're doing when we make our services proprietary. It's not the same ho-hum service everyone else offers its special. Now here's a little tip. You almost certainly have your own process or method for doing what you do. Have a 1000 developers build a website and they'll do it a little bit differently. Have a 1000 graphic designers do a logo, and they'll do it a little bit differently, et cetera. You just have to give it a name and then presented as a part of your offer. The simply doing that, it's something that other freelancers aren't going to be willing to do. That if you're willing to do, it can make a difference in what you're able to charge. Because now you have something unique, something that sets you apart that people can only get access to when they hire you. That's the big key with all of this. They can only get access to it when they hire you, scarcity, proprietary, et cetera. So the more you can do that, the more you're going to be able to charge. 10. Packaging: Next is packaging. Now this one's fun for me because you can get really creative with it. Packaging is just a matter of how you put your offers together. So thank fiber, not necessarily the pricing that they have because that's a whole other story about the way they went about that, but how they get freelancers to turn they're selling their services into little packages. You can crank up the perceived value of what you offer by changing what you put in your packages. And so there's some core elements to putting these packages together. First is of course the core deliverable. So what am I actually getting? So let's say you're a graphic designer, you could have three packages. First one is just for a logo, second one is for a logo and website design. And the third is for a full brand kit to include the logo, website design, business cards, stationery, et cetera. Those are your core deliverables. And so each package you should have usually about three packages more than I've seen people that could do more, but more than that, it tends to get a little overwhelming for the client, but at least three packages. And each one of those packages, the core deliverable should change a little bit. Each as you step up and you step up in getting more of a core deliverable. So that's how you start out your packages. Next is your features. So what does each package include now, using our logo example, let's say it includes three revisions, but no access to the PSD, that's your base package. But if you get the logo and the website design now you get five revisions and access to the PSD. These are the features of your service and you can play with it to jack up the perceived value of your price. So it's not just getting more core deliverable. It's also looking at the features underneath each deliverable and increasing those as well as they get, as they get higher packages that again increase the overall perceived value of each package. Next is bonuses. So this is extras that you'll include. So let's say with your logo, there's no phone calls included. But if you get the logo and website design, you get one strategy phone call. If you get the full brand kit, you get three phone calls. Plus I'll also give you access to a little training I created on SEO to help your site rank better in search engines, that kind of thing. Piling on bonuses is maybe the easiest way to crank up the perceived value of what you offer. The trick with it is not to just give any old bonuses, is to think about the ultimate result your client is after. Add bonuses that compliment your core service and helping the client get that ultimate result. So we go back to the SEO example. I'm building you a website, great. But I know, especially if I know my clients while I know that my clients wanna get traffic to that website. Okay, so let me give you a bonus of SEO training that's going to help you to learn how to get traffic to your website. Also, let me do a little primer on content marketing. I'll teach you a little bit about content marketing, what I've learned about it, so that you can start creating content that's going to help you make better into the search engines. Also, let me give you a little another bonus about Google ads because I've done work with Google ads. And I'm gonna show you some of the things that you can do. Pay for pay for traffic, traffic, but keep it cheap and be able to crank up the amount of traffic that you're getting to your website, et cetera, et cetera. So that's the kind of thing that you wanna do with your bonuses. You want to think about those things and see if there's stuff that you know, knowledge you have information you have that you can include with your services that are going to help them get closer to what the ultimate result is. So the website is a means to an end. What's the end? How can I help them get closer to that? All right, then the last part of this, of course, is the price. But how you price your package is determined by your pricing strategy. So we can't just give it a price. 11. Pricing Strategies: The final thing that you need in all of this is to master and understand pricing strategy. Because depending on where you're at in your career and what kind of services you're offering. Different pricing strategies that are going to help you make more and others will hurt you and cause you to make less. So with that said, let's talk about pricing strategies. So there's three main ones that you need to know. The first one is the low ball. I think everybody knows that bond, but we'll go through it. Next is same but better. And the final one is premium. So let's talk about the lowball real quick. Now this is of course the most common well-known strategy, the one most people default into. And even though it can be dangerous is if this is all you ever do, it's still does have its place if you understand it and why you would do it. So the basic idea is to deliver the same service as your competitors. You just charge less for it. So it's pretty simple. But this strategy should really only be used when you're first starting out as a freelancer. It's a good way to get clients to hire you other over, other people who are more experienced and help you get those first crucial clients. So if you're at a deficit credibility wise, that's what this is for. That's the only time you should use it. Shouldn't just be using it because, okay, you should move on to another pricing strategy. If you're at a credibility deficit, then you use the low ball. Because that's going to help you to be able to siphon off a few of those people and then you can work on your credibility. Freelancing is a game of, it's all about credibility. So as you get more credibility, you don't have to do this. But again, if you do this, you should be looking to move away from it as quickly as possible. Otherwise, what happens is when I see often is you get caught in a race to the bottom and end up making a fraction of what you could for your services and you get stuck low-balling because that's the only strategy, you know. Okay, so we don't wanna do that instead. If you start now and your low-balling, that's fine. But you should, your goal in that stage and that phage should be to move to the next pricing strategy, which is what I call same but better. So again, this is a strategy move to from the low ball. And the idea here is that you're going to charge the market rate, so the same rate your competitors are charging. So now you're not low-balling, you're offering the same rate, but you're going to offer a little more in your package. And this is where packaging comes in handy. So let's say your competitors are charging a $100 for a logo that comes with three revisions and a 48 hour turnaround time, you'd come in using this strategy and charging a $100 same price. But for a logo that has four revisions and a 36 hour turnaround time. Now if you're the client and all else is equal, you're likely going to go with the one where you get more. That's just how people's mind works. So it's an easy way for you to set yourself apart from your competitors without lowering your rate by keeping your rate at the market rate. Now, this works when you can compete directly with your competitors on credibility. So you've built up your credibility. You have an established before portfolio. You have client reviews, you have volume and variety and all the things that we talked about. And those things stack up well with your closest competitors. That's when you can use this because if a client we're looking at you and your competitors side-by-side. And they were looking at just the credibility elements. And they'd have a hard time figuring out who is actually better than again, all that being equal, the one little change of you offering a little bit more is going to cause them to go with you. They're going to literally say in their head on might as well go with this person because I get an extra revision. It's really that simple. Okay, so again, you have to be able to compete on credibility and B, be close to even on credibility. And then you can use this strategy offered just a touch more and still charged the same rate. Alright, so that is same but better. The last one then is premium pricing. So this is high in pricing and this is ultimately where you're headed. This is when you've got your credibility firmly established. You're not just competing with your competitors, your out-competing them on credibility. You figured out how to inject some scarcity into your services. You've identified, named, and present your proprietary delivery system. You can deliver on packages that are significantly greater than your competitors. That is, when you can charge significantly more than everyone else in your market. And like I said, that is the ultimate goal. This is where your career is headed. Because once you reach this place, you're earning huge fees to your services and they don't take you a ton of extra time to deliver on because it's not about how much extra work is going into it. Think about it. All of the things we talked about with credibility, portfolio, the volume, the variety. All of those things have nothing to do with how much extra work you're doing. Adding bonuses. They have nothing to do with how much extra work you're doing. You do that bonus wants and you just offer it to every client. All of these things that we've talked about are not about you putting in more work there about you put increasing the perceived value of what you're offering. Okay, that's the trick here. So again, once you get to that place, you're able to earn these big fees without a ton of extra time, you get your time back, you're able to travel and do more of the things that you enjoy with the people you love. This is where the dream that you had when you first decided to start freelancing actually starts to come true.