Here’s how to find out what your competition charges: Ask!!
There’s a right way and a wrong way to ask. (Actually, there are many wrong ways to ask. And although the way I’m prescribing feels right to me, there may also be many right ways to ask.)
Here’s how I recommend doing it.
Approach someone you know personally who offers a service similar to yours. Then say something along the lines of:
I am reconsidering the hourly rates I charge to write a white paper on marketing challenges facing our industry in the next decade. My current rate is $85 per hour and the typical project takes about 30 hours. The per project fee would be around $3,000. Does that sound about right to you?
There’s nothing sacred about the specifics here. You may discuss hourly, per project, or any other calculation factor. You may describe the assignment of your choice. What’s important is to reveal your rate before asking someone else his rate.
When you do it this way, you tend to get solid data. When you ask in a vague way, you get vague data.
In American society, it is bad form to ask someone else her salary. Heck, oftentimes one spouse doesn’t know his partner’s salary. So why would someone volunteer this information if you haven’t revealed your number first?
Notice that this is best done in person, ideally in a one-on-one conversation. Post the question to a LinkedIn group, for instance, and you have no way of knowing who you are sharing your own personal data with. Nor do you have any gut feeling for the professionalism or expertise of your informant. Believe it or not, there are people on the internet who lie!
Sometimes the advice we receive from others is totally worthless. I was once preparing a proposal to write marketing copy for a local public university. I had no idea what an appropriate rate would be in the higher-education field, so I posed the question to a LinkedIn group representing a live, local freelance writers’ group of which I am a member.
I got no response except for one individual who only said “be sure not to undercharge.” I have no idea what that means. Such a statement introduces more self-doubt into the process rather than any degree of assistance.
Another great question: Who is my biggest competitor?
Great question! Most of us don’t know. I certainly don’t.
As a freelance writer, my competitors number in the tens of thousands, perhaps in the hundreds of thousands. They can be found through searches on Google, Facebook, Twitter, and LinkedIn. They may reside in online freelance job boards.
They may be local individuals I know well or they may be total strangers on the other side of the globe.
Some are soloists; some large agencies also compete in my space.
They may even have no internet presence but land assignments through relationships at church or at PTA meetings.
It cracks me up when I see self-proclaimed marketing gurus on the internet who offer to work with freelancers in developing positioning statements, web content and such. They start by asking the client for a list of his biggest competitors. If I knew exactly who my competitors are, branding and competing would be a breeze.
The best I could do if I were starting work with a consultant would be to identify websites, newsletters, logos, and / or slogans I like. This would give some direction but not the ideal level of input.
How about you? How have you been successful at collecting pricing data in your field? How well do you believe you know who your competitors are? I’d love to hear from you.