Keys to Setting Your Rate Based on Experience
There is no one set strategy for setting your rates, which is why the process can be so confusing for freelancers. Basing your rates off regional competitors’ prices is a very smart tactic, but I think many freelancers forget about something important when putting together rates, and that is their value.
It seems that so many of us are quick to assign the highest price we could be making–but that’s not necessarily the most practical strategy. Why? If you have little experience and a non-brag-worthy portfolio, why should someone pay $100 an hour to hire you?
Instead of pricing yourself at a point that seasoned freelancers are getting, there’s nothing wrong with pricing yourself at a competitive wage that reflects your skill set. You can still make a good salary, plus you won’t be excluding the opportunity to build your skills and your portfolio.
Wait, I thought I was supposed to raise my rates!
Instead, pricing yourself moderately will attract strong clients and give you the chance to build your portfolio.
This may sound a little opposite of what many of us are told: raise your rates, raise your rates, raise your rates. While increasing your rates is necessary to ensure you can cover your costs and turn a profit, you may limit your potential to reach out to more clients if you are only taking the highest-wage jobs.
I’m not saying to work for $10 an hour. I’m not saying to write for content farms or design for logo farms. I’m not saying to work for lowest-bid type of work.
Instead, pricing yourself moderately will attract strong clients and give you the chance to build your portfolio. You may think raising your rates will only attract quality clients, but that’s not necessarily the case. While it will weed out those that try to nickel-and-dime you, it doesn’t guarantee that you won’t encounter a bad client. Those, unfortunately, are everywhere–even those that pay $250 an hour!
Won’t I have to work less if I price my services higher?
You may have to take more jobs by charging a moderate, practical rate–or not. If you’re working for the highest-wage pay, and clients don’t see the value in paying you top dollar for you, they’re going with the guy who is priced at a more affordable rate or someone that has the experience and sparkling portfolio…either way, you are not getting the job. You may get some jobs at that higher rate, but without demonstrating your value consistently, you won’t get those opportunities consistently.
The guy that has the top portfolio and charges top pay along with the guy that is working his way up and charging moderately are likely getting more work, and possibly more money in the long run.
The guy demanding the highest wage without experience and clips to back it up isn’t showing much value and clients will pass on that. Until you can show that you’re worth the highest wage without a doubt–and get into that circle that pays top dollar–you may want to reconsider the notion that by simply charging more, you will make more.
How can I attract clients using the rate I set?
We all want to make the highest wage possible, but there are ways to still make out smart. For instance, my hourly rate is typically lower than what I make on projects because I charge a project fee. That rate helps me to attract clients and show them what I am willing to work for, but I typically wind up making more–even in the event that I do work at an hourly rate. It shows them where I stand, and what I think is practical. When they see that I’ve been working for a few years and have a strong set of clips, they see my value.
How do I set a practical rate and still make good money?
A great way to find out what a moderate rate in your field would be is to look up the going rates that competitors–and local jobs are paying. You can also look at what creative agencies are paying. It just may give you a reference point to see if you are underpricing or overpricing. Then you have to add your value–what do you bring to the table that the guy charging $50 an hour more doesn’t? Is your portfolio strong–how long would it take to get to the point of that experienced freelancer you admire?
Don’t just look at the person in your field you admire most–that person may have a great record of clips, but if you don’t have that experience or connections, you probably don’t hold the value that person does…yet. It doesn’t mean that you don’t have value or that your value isn’t always increasing!
Just because you are in business doesn’t mean you don’t have to build your business. It takes time. So develop your skills and demonstrate your value before you jack up your rates. When it’s time to give yourself that raise you’ve been wanting, you can be sure that you deserve it and clients will feel the same way.