What the heck is “value” in determiningfreelance and consulting rates?
I’ve been reading an awful lot lately about how we freelancers and consultants should base our fees on our “value.” However, these same articles rarely define the word or even hint at what it means.
When I try to tease out a definition by re-reading for context, it often seems like “value” is a synonym for “high self-esteem.”
How we can grow our value?
Yes, there are ways to increase our value. We can increase our knowledge of the subject matter or sharpen the skills we offer. We can choose a specialty that more directly impacts clients’ bottom-line profit. (For instance, sales copy that really sells.) We can improve our communications with the client and serve their objectives more closely. We can understand our clients better and generate ideas that are more creative. We can study clients’ competitors and observe what they are doing right.
This list is just a starter list. Ideas never stop.
I rarely see suggestions such as these paired with the concept of value. Actually, I am more likely to see restrictions on customer service. These restrictions may include limiting the number of drafts or revisions included for the original price or extending deadlines or checking email only a limited number of times per day or not answering the phone but instead allowing it to roll over to voicemail to preserve our concentration on other work.
Mind you, I’m not saying that setting limits is bad. Setting limits may be necessary to manage both our workload and our marketing simultaneously and to meet deadlines for all our clients instead of just the squeaky wheels.
However, I find it interesting that these limits are more likely to show up in a discussion of value than are suggestions of how to assure superior services.
These limits are more important when we charge a flat fee by the project than when we charge by the hour. If the client knows that he will pay by the hour for every task (and that we track our time and bill accurately rather than short-changing ourselves), he will be more discerning in deciding what needs reworking and take care of the little things himself.
Another way to enhance value (if we bill by the hour) is to work faster. It’s intriguing to explore ways to write more efficiently and get it done faster. Certainly focusing our attention more closely on the task at hand helps and faster typing (or dictation) can’t hurt. However, I believe there are limits to how fast we can work. Generally, the more time I spend thinking about a project before I sit down at my desk, the faster I can implement.
What about communicating our value more effectively?
There’s some fantasy out there in the marketplace that if we persuade a prospect more effectively of our value, we can price our work as aggressively as we please.
I don’t buy it.
Let’s say you want to write a newsletter for the no-kill cat shelter in your community. You propose a rate of $100 per hour because that is how you have priced your value.
I doubt you will succeed no matter how great your work is.
It is argued that charitable organizations have the money for whatever they want to spend it on so service providers should not settle for a lower rate. Demonstrate your value by claiming that your work is so effective that it will increase cash donations.
Might work if you can show measurable client achievements from past work you have done.
However, if your work is usually in a more lucrative industry, your claim will seem hollow. This is especially true if the charity usually works with other professionals who provide their services at a low cost or even free. Simply because national charitable organizations may have highly paid executives does not mean that the same is true for your local, independent entity or even the local branch of a national group.
Claiming your value is all well and good, but sometimes it has to be in tune with reality.
Originally posted 7-21-14