Freelancing: How to talk about money with clients
How to talk about money with clients.
Setting your rate is an internal affair, for the most part. You make the call, and you ultimately live with the decision. Once you are done with that, however, you have to actually talk about those rates with clients. This is frightening territory for many freelancers. A combination of a lack of confidence and a fear of not landing the clients we need to pay the bills creates a fog of nervousness and doubt whenever we try talking about money.
To survive as a freelancer, you need to learn to talk about money. Confidently, firmly, and clearly. Failing at this part of the process means failing at it all. Over the years of building and growing my freelance work from two nights a week into a full-time, family-supporting business, I’ve learned (through painful trial and error) a few helpful principles that you can build into your freelancing framework.
Don’t Be Shy Most brand new freelancers tremble with fear when they are asked that horribly wonderful question by a potential new client: what do you charge to do that? This is the bit that most freelancers choke on. What if I quote a rate that’s too high for the client? What if I’m the fourth bid they’ve received and I come in higher than the rest? What if they figure out that I don’t know everything and that I often feel like I’m making this up as I go along?
Here’s the hard truth: there is no perfect price that every client in the world will like. Try as you might, you will never please all of the potential clients who come knocking on your door. Your rates, no matter how low and competitive, will always turn people away. That’s OK, trust me. You can’t handle everyone who walks through your digital doorway. And as I discussed in The Freelancer’s Guide to Clients, not all clients are the right fit for you anyway.
So, don’t let a fear of overbidding a project keep you from bidding at all. If you’ve done the math and your pricing is in that perfect sweet spot between meeting your needs and staying competitive with other similar service providers in your market, then hold to your guns. Don’t be afraid.
No Apologies When those clients email back and tell you that your pricing is outside of their budget, don’t apologize. Please. I’ll beat this dead horse once more: you set your rates after much thought and reasoning. Stand by those prices and be unapologetic.
One reason you should never apologize is because a potential client may see that as a sign that you were trying to sneak an overpriced bid past them. Apologies are for people who did something wrong; you did nothing wrong in quoting your fair and reasonable price.
You should also never apologize because doing so makes you appear weak in the exact moment that you need to appear as confident and strong as possible. Every potential client is looking for enough reasons to trust you before they commit. Apologizing for your rates only handicaps your efforts to impress and win the trust of those prospects.
My only other piece of advice is to pay attention and listen to every interaction where pricing is discussed. You might look back over the last year and get the feeling that way too many people felt your rates were too high. Don’t be apologetic to clients, but when the project is over (or has passed you by), take a moment to re-evaluate your pricing based on this simple feedback. One client telling you that you’re too expensive isn’t grounds for changing your rates. A dozen saying it, though, might be a sign that you’re aiming too high for your market. Be firm but flexible.
Show, Don’t Tell
I talk about money confidently. I’m worth every penny I charge my clients. I won’t bat an eye at sending a quote to a new or returning client. My rates feed my family, so I’ve learned to stand behind them. One thing I never do, however, is quote a price in a meeting or on the phone without stepping back and making it accurate. It happens often. It usually goes something like this: I’ve just wrapped up a short session with a potential client and everything has gone well. As we pack up our notebooks or throw away our coffees, they turn to me and say, “So, just to have an idea about what I’m getting into, what’s a rough price on something like that?” It feels normal and friendly. It comes in under the radar. But it’s a dangerous moment. What you say in response, however couched in flexible words and caveats, will be held up as the “official quote” when that client returns to their office.
In every instance, the best option is to tell them you make it a policy to never quote a project before researching the scope and deliverables. Feel free to apologize for that small inconvenience, but that you will get them an official estimate by the next business day.
This is wise for a couple of reasons. First, it allows you to put your quote in writing. Whether it’s in the body of an email as plain text, or a well- designed estimate PDF attached to the email, you need to put these things in writing. A conversation over the trash can in a café is not the place to offer a bid on a project. Put it in writing.
The second reason is purely practical. A verbal quote is a lot harder to pass up the executive chain when the client returns to their place of business. A PDF or typed out bid has a lot less friction keeping it from getting into the hands of the decision-makers. Put your pricing in writing and reduce the friction that can pop up when bids go bad.
It’s Only Fair
Obviously, you and I need to talk about our pricing because we provide a service that our clients need and will (hopefully) pay for. What freelancers often forget is that our clients should be just as open about money as we are.
It took me a couple of years before I started asking a very important question to all my prospective clients, but when I started asking it, things got a lot smoother for me. What was it? * What’s your budget for this project?*
Seems a bit personal, at first blush. You’re asking the client to reveal their finances. You might even see it as similar to asking someone to reveal their cards before you get down to a serious game of poker. I believe that not only is it fair to ask this question, but it’s essential to removing friction.
In the past, I could get two or three emails deep with a new client before discovering that they only had a budget of $100 for a service valued at $600. Those conversations went poorly because the client really thought they had a shot at hiring me until my rates were laid out on the table.
I prefer to ask new clients upfront what their budget for the project might be (right up there with asking who the final decision-maker on a project would be as well). If they have low expectations, I can help explain why the project will cost more than their assumed budget. They might not work with me, but they also might not pursue other designers knowing that their vision outstrips their bank account.
On the other hand, asking for the client’s budget puts the ball in your court first. You know their budget before they know your pricing. If the service they are asking you to perform is only $100 more expensive than their budget, you can often suggest alternatives to the scope of the project that might help them get what they need.
If you do this and genuinely help them by cutting the scope to an affordable number, you become their hero, not their speed bump. People don’t like speed bumps, but they love heroes.