Imagine the following scenario: You have finished a productive meeting with a new client and are just about to leave when she asks you to send her a project quote. You get home, fire up your computer, and email your client a project estimate of $2,750. You make this calculation based on the estimation that it will take 55 hours to complete this project and your hourly rate is $50.
A day later, your new client has replied to your email with the following question: “My budget is only $2,000- is that OK?”
In effect, the client is asking if you’ll be OK with reducing your pay from $50 to roughly $36 per hour. And that’s assuming your project truly lasts 55 hours and not longer.
Do you say OK, or do you walk away from the project?
Sticking to your guns when negotiating
The freelance profession is one of the few professions where clients feel they can haggle for a lower project fee or rate per hour.
A client will not think twice about asking you to lower your freelance rate; however, that same client would never ask a plumber or electrician to lower his rate per hour.
How do you tease apart the delicate situation presented before you without lowering your rate and without insulting your client?
1. Understand the client’s perspective.
It may very well be that your client has only $2,000 on hand for your freelance project. More than likely, however, she is reluctant to spend more than $2,000 on a new and untested freelancer.
Many business owners must answer to their investors and/or business partners when making large purchases. So, a loss of $2,000 might still be explained away as a “business expense,” but anything beyond $2,000 could require additional accounting or even a loss claim.
2. Haggling is counter-productive.
Many freelancers negotiate their rates by trying to meet their clients “down the middle.” To this end, you might say the following: “Let’s split the difference and set my project rate at $2,375.”
At first glance, this seems like a good strategy. However, it is flawed for two reasons: You still end up reducing your rate, and your client resents paying more than she’s comfortable with.
As you work on this freelance project, you’ll be tempted to cut corners and not provide the same level of quality that you would to full-pay clients. Conversely, your client will try to squeeze out additional work from you to justify that “extra” $375.
3. Walking away is not practical.
It’s tempting to “show” clients you won’t be low-balled by simply walking away from the project. However, it takes a long time before you can become this confident and in-demand. At the beginning of your freelance journey, you often don’t have the luxury of saying no.
4. Saying yes is a slippery slope to lower pay.
If you simply agree to work for $2,000, your client will never stop haggling you for a better price or “just one more thing.” If your client refers you, she’ll note your new lower rates and how you can be had for a bargain price.
The other issue with saying yes to a lower rate is it’s going to take a second round of negotiation for you to approach your working rate of $50/hour.
How to say yes without compromising.
You can address your client’s uncertainty and still maintain your normal work rate by suggesting that you reduce the number or extent of your work tasks. So, instead of working the proposed 55 hours on your client’s project, consider reformulating the project so that you’re only putting in 40 hours.
You can propose this plan by asking the client if she’d be agreeable to seeing 30 pages of content from you versus 50, or 5 web pages instead of 7.
Chances are good that, once she realizes that her project won’t be completed as initially imagined, she’ll end up paying you your full rate.
How else can you maintain your freelance rate during negotiations?
1. Qualify better prospects.
Startups, “mom-and-pop” operations, and clients who have no defined idea about their freelance project are all red flags when it comes to having your set rate (often called a fee schedule) respected. In many cases, such clients will simply not have enough money to pay you fairly. Other clients will not understand why you are asking for such ‘high’ sums.
Thus, you must find clients in established and/or larger businesses. To this end, you’ll need to network and create a freelance website.
2. Sell value, not hours.
Clients are more likely to agree to your proposed price quotes if you emphasize that you are the right person for the job. You can do this by emphasizing your experience, training, past work, etc.
You can also quantify your value by explaining how a good website will attract customers to the client’s business, for example. Or how a good sales page will generate lots of sales.
If a sales page that you write ends up generating $100,000 in revenue, what’s $2,750- or even $4,750- for your efforts?
You’re less likely to be outbid by a competing freelancer (if any) if you specialize in a niche and become the resident expert in that chosen field.
By specializing, you also build your niche credibility over time, which results in you finding bigger and better-paying clients. Such clients are more likely to see the value of your work and not haggle you on price.
You don’t have to concede to lower pay.
When negotiating with potential clients, you don’t have to accept lower pay. In fact, you are better off walking away from clients that haggle you about price- although such a maneuver isn’t always practical. Fortunately, by focusing on your own expertise and worth as a freelancer, you’ll eventually encounter clients that will recognize your value.