It’s really hard to know how to price your work as a freelancer.
While some people will tell you to make it easier on yourself by establishing fixed prices that you seek from every single client, I believe that can be a mistake.
At its core, pricing is about matching what someone is willing to pay for what you’re selling with what you’re willing to accept for it.
That’s why setting the same price for all clients is like being a bartender who doesn’t know there are differently sized glasses on the shelf.
How can she match the drink to the glass if she only uses a single size?
Say Dominique is tending bar and someone asks for a gin and tonic. Being a new bartender who has only ever made drinks in tumblers (otherwise known as lowballs or old-fashioned glasses), she doesn’t realize that there are bigger glasses — highballs — on the high shelf. So she pours the big drink into a short glass, and half of it overflows onto the counter.
Likewise a freelancer — let’s say a photographer — who has only ever shot wedding photos and charged $50 an hour to do so, will also find herself leaving something on the counter — in this case, money — when she applies the wrong approach to satisfying a customer’s request.
If she is asked by a glitzy resort to shoot a star-studded event but asks for her usual $50 an hour, she has just spilled a good $200/hour (or more) because she used the wrong size “glass” for the job.
Low price, high price
The key to success in both bartending and freelance pricing is to know as much as possible about the specific task at hand before you begin.
A bartender needs to know exactly how to make a drink to get it right. And a freelancer needs to gather as many inputs about the client as she can to figure out how much they may be able to pay before making a proposal.
For example, a writer may well want to charge a big corporate law firm more for a blog post than she would a small startup or a nonprofit. The big law firm probably won’t blink about paying her an amount that a nonprofit may agonize over.
If she asks for the same from both, she may not get the work from both. The nonprofit will go with a cheaper writer, even if she’d actually be willing to do it for the cheaper price. The law firm may well choose a more expensive writer, assuming that the other writer’s higher prices indicate better quality and more know-how.
Do your homework
The problem comes when the situation isn’t so cut-and-dried as a law firm versus a nonprofit. Are there any ways to tell how much money a company might be willing to dispense?
One great thing to do, especially if you freelance in tech or other industries that tend to get venture funding, is to research the company’s funding situation when you’re in the info-gathering phase of your pricing decision.
It’s like Dominique referring to her bartending guide before pouring the drink to make sure she’s got all the info she needs.
Here’s an anecdote to illustrate how useful this can be.
Recently someone referred me to a tech company that wants blog content. The contacts at the company asked for a proposal for several posts a month. My contact at the company said they are “a small startup.”
That phrasing led me to think they may not be able to pay all that well. But then I looked them up and discovered that “small” to them means 90 employees all over the world. It’s technically a small business, but it is far bigger than the three people in a garage I had been picturing.
I also discovered via Crunchbase, a great site for looking up startup company info, that they had recently won a $15 million round of venture funding.
So now I knew that I was proposing a few blog posts a month to a 90-person global company that just received $15M in funding. They are flush with cash and ready to roll on getting their marketing in order, but they are not extensively staffed so they’re looking to pay freelancers to help.
This helped me see that in this instance, I should not lowball this proposal. I should highball this offer.
Just as Dominique better highball that G&T or end up with a mess on her hands.
That is not to say I should price gouge or propose prices way above what I normally get paid by the average client. I should simply pursue pricing on the higher end of my usual range, and do so confidently.
It’s things like this that can sway how you price. Take a moment to dig around and gather as much info as you can so you can be less likely to spill potential earnings amidst the peanut shells.