It’s hard to know how much you’re worth. We’ve all been there. Working for yourself means also working on your own self-doubt, and that can take time to develop.
For my first steady writing client, I charged only $18 US an hour. He’s one of my best clients, so I’m still working at that rate. However, with new clients, I’ve started charging more because I know what I’m worth and now I have the testimonials to prove it.
There is always a time and place to offer discounted rates, but once you’re established you need to raise them. Here are just a few reasons why you should charge more.
Higher Rates lead to Higher Perceived Value
Psychologically, clients will think your writing is better if you charge more. It’s true! This is because of the Marketing Placebo Effect. If you aren’t familiar with the placebo effect, it’s basically the idea that the act of taking a pill and expecting an outcome will cause the outcome. Our expectations shape our reality when it comes to pills, and also when it comes to marketing.
In this psychological study with wine, the researchers had people drink the same wine and then asked them to rate it. They were also told the cost of the bottle when rating it. Now, in reality, they were the same wine, but their participants didn’t know that. The results showed that people rated the more expensive bottle as better in taste and quality.
Like that glass of wine, you’re more valuable than you think!
Freelancers Have their Own Expenses
It might not seem like a laptop and wifi cost much, but depending on your skillset and equipment, things can add up quickly. Just this week my brand new laptop crashed and I was worried I’d have to drop $1000 on a new one! Or at least waste time not being able to use it while figuring out the warranty. Luckily, my IT friend fixed it since it was just a minor software issue.
Aside from writing, I also do audio editing and graphic design. My microphone setup cost about $130 and the drawing tablet I bought also cost me $500. Plus that microphone stand broke recently, so I bought a new stand that came with another microphone as a backup. Seeing a theme here?
While I don’t need all these things, I like to be able to offer extra skills and diversify my services. Also, I have a lot of hobbies… that’s my own problem! Either way, the point is technology costs money and can break at any time.
Technology is an obvious expense, but there’s also plenty of others. For one, there is software and books you will probably buy to keep your skills up to date. As a freelance writer, I’m always learning and reading to keep up to date! Notice, I haven’t even mentioned making a savings account or health benefits. Working for yourself is expensive. The reason professionals charge so much is that they know they also have to cover the cost of so many things aside from just their time.
You’re Affecting Your Future Self Too
You’re not just undercutting other writers, you’re also undercutting your future self. Let’s say you work with someone who loved your work and they got a stellar deal for it. Maybe a year later they tell their friend about you. Great! Word of mouth is the best kind of advertising!
That is until they tell them how little you cost, so now that friend of a friend expects to pay that little as well. Do you take the client? If you’re well-established and have enough gigs, probably not. Raise your rates as soon as you can, and don’t keep undercutting yourself. It might seem tempting in the moment, but future you could be screwed over too.
Cheap Labour Attracts Cheap Clients
By charging less you are attracting the wrong kind of clients. When a client is looking to pay you $5 an hour or $10 for 10,000 words, do you really expect them to also respect your personal boundaries and time? I’m an optimist, and even I’m doubtful of that.
Also, yes, those are real rates I’ve seen and scoffed at while sending pitches on Upwork. They are entry-level rates sure, but even starting out I avoided them because they were not worth my time and it’s a major red flag.
You should also be aware that working with these kinds of clients puts your reputation at risk if things go wrong. In my last few months on Upwork, only one client said they wouldn’t recommend me, and I know exactly which one it was. They were impatient and unrealistic. The project was supposed to be 1 hour but it took 3 hours. Since I was new and seeking more testimonials, I let it slide and gave them a good review. Luckily, they still gave me an alright public review, but privately they didn’t and that affected my rating.
Companies are Saving Money Hiring You
In a typical 8 hour workday at an office job, there are anywhere from 1 to 2 hours of work that are wasted. That’s a substantial loss of efficiency, but companies know that and they accept it.
When a company hires a freelancer on an hour or a project basis, they only pay for your time that’s actually productive. Freelancers save them plenty of money by simply being efficient. Cyberslacking is rampant in offices and nearly everyone does it. My clients don’t pay for me to wake up, drink coffee, and check the latest cat videos on Facebook.
While it seems like freelancers cost a lot, they’re actually saving companies money in plenty of ways. This article covers just a few of the ways businesses save by using your services. They don’t have to train you, provide an office, or provide benefits. All in all, a pretty sweet deal for a business if you’re providing them a high-quality service.
And that’s just a few of many reasons you should be charging more. Within reason of course. Now go land those clients and make sure you’re charging what you’re worth!