Okay, pal! You are a freelancer who has done a good job of booking a discovery call from a prospective client. Pretty giddy, right?
Now let’s paint the picture…
The call goes smoothly, you’ve finished your pitch and communicated well with your potential client. Suddenly, they gave you the dreaded words…
Oops. Who knows this feeling? I went through it numerous times, and I guess you did, too. If you haven’t, sorry for scaring you, but you will, soon. I can pretty much assure you that.
Just like how I did in the past, this one simple phrase can make you doubt your value and question what you are offering. You might consider lowering your prices or cutting yourself short, as a result.
But don’t change a thing until you finish reading this article. JobandEdu has got you on this!
First Thing First: It All Starts With You!
After working as a freelancer for a while, here is the most important lesson I’ve learned about pricing: It’s not just a number you slap down on the table and see if it sticks. First and foremost, it has to be strategic. Second, you need to have confidence in the number you are charging, which is not always easy to do, especially when the imposter syndrome kicks in.
So, to define your pricing, I want you to get really, extremely granular about it. There are countless guides on how to determine the cost of your service out there, but I will go over the basics, just in case:
- Set your monthly salary goal. Are you supporting yourself or a family? How much money do you need to pay your expenses and live comfortably? Determine your annual salary goal, and then you can use this to calculate how many working hours you need to achieve that goal.
- Calculate your cost of doing business: Track down any recurring subscription fees, memberships, software/hardware purchases, equipment, etc. The amount you have to pay for these each month is your CODB.
- How much do you want to work? Total your annual salary goal and CODB up, then divide it by the number of projects you can do monthly. That should be your ideal number.
- Know the market rate for your service. Now that you have a rate of pay that covers your expenses and income goal, do some research and compare it to the market. Sites like Glassdoor provide you with an insight into how much freelancers make in each field.
- Name your price. Make sure you stick with it for at least a month, even if it makes you feel uncomfortable.
Many novices are so passionate about what they do and want to make their services as accessible as possible. There is nothing wrong, but it leads to a common mistake: They sell themselves short. This can result in burnout, but beyond that, not having enough money to cover your expenses and live comfortably will prevent you from creating valuable work. Even worse, you may even have to sacrifice the quality of your work to meet the rate.
Keep in mind that you deserve to charge a cost that allows you to maintain your standard of living. Creativity cannot happen under financial stress, so you don’t have to feel sorry for that, okay?
How To Respond To A Client’s “So You Are Too Expensive”?
Even when you have named your price and you know, deep down, that it’s reasonable, there will always be clients who push back on it. In fact, that’s part of your freelance life.
Just bookmark this post and if someone ever tells you “So you are too expensive…”, you can give them the perfect response.
Stop Any Negative Self-Talk In Its Track
When someone complains about the price, immediately, imposter syndrome will rear its head. This is especially true for those who are new to the field. Perhaps you will be overwhelmed with stuff like:
- “I don’t deserve this price.”
- “There are many people out there who can do it cheaper — should I just drop my rate?”
- “My work is not that good, and my client can see it.”
Do these ring a bell? Stop right there, folks. When your client asks to do it cheaper or complains that you are too pricey, the first thing is to remind yourself of how you totally deserve your rate. Be it graphic design or photography, you are providing a service, your equipment is not free, and you deserve to be paid for it. Period.
If you immediately lower your prices out of panic, your clients will assume that you were over-charging in the first place. You wouldn’t want that. Additionally, you will pass up an opportunity to better understand your clients’ requirements and concerts. So, take a deep breath and tell yourself that you didn’t decide on your rate randomly. You have a good reason to charge this amount, and you’ve got this.
Start A Conversation
The next step is to communicate with your clients. I have some good news here: When someone says you are too expensive, it doesn’t always mean the business is over. Often, it’s a sign that they want to use your service, but may need some persuasion to overcome their reservations.
By talking to your potential clients and asking them a few questions (in a non-agressive way, of course!), you can clarify their true concerns and address their needs. This can lead to several cases:
- The clients want to work with you, but they aren’t 100% convinced yet. In that case, reminding them of the value that you offer might help. More on that below.
- They genuinely cannot afford it. You will want to ask about their budget or let them mention a price. Suggest a more cost-effective option to match their budget, if that makes you feel comfortable, or politely tell them that you are not a good fit right now. Be nice but straightforward and stay in touch with them – who knows, the circumstances might change in the future!
- Your clients are only price shopping or simply using price as an excuse for not wanting to use your service. In that case, just let them go to save time for other clients.
How to respond when clients say “You’re too expensive”
Acknowledge Your Worth
Well, perhaps your client does want to use your service after all. However, since clients don’t work in the same field as you, they might have no idea of what to expect when it comes to rates. Helping your clients understand what they are paying for is important.
What should you do, then? Explain to your clients the true value of your work, the processes, and the time involved to achieve the result. If, for example, they compare your price with that of someone who has less experience than you, let them know.
When you are able to convey it, the clients will realize that your service is not expensive – it is just worthwhile!
Focus On The Return Of Investment
In case your clients don’t understand the benefits of your offering, focusing on the return of investment is the key. Here are some of the terms I’ve used in the past:
- “So you reached out to me because you need [XYZ]. I’m confident that I can help you.”
- “How much money/time/stress will you save if I can help you with [XYZ] immediately?”
- “What would it mean to you if I have the solution for [XYZ]?”
Aside from that, you can share your previous work and testimonials from past clients to further indicate the value of what you are charging.
Remember: They May Not Be Your Ideal Customers, And That’s OK
To wrap up, I want to leave you with some career advice: No matter how much you charge, your price will still be “too high” for some people. “So you are too expensive”, they might say, but it’s part of running a successful freelance business: You don’t discount your own skills and underestimate yourself.
Your rates reflect your worth. As long as you work hard and stay humble, you will attract your sweet spot clients. Hold on to that!