SEPTEMBER 20, 2021

How much should I charge? Explained in 3 steps

How much should I charge? 3 steps to get paid what you're worth

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You’re a professional, an entrepreneur, a freelancer, a small business owner.  You’re good at something.  Perhaps you’re good at many things.  Maybe you’re a creative guru who’s good at writing copy, at branding, and forming a digital strategy.  Or maybe you have an amazing product with impressive benefits. 

Either way, you have something meaningful to offer your customers, and you’re probably pretty confident in your abilities.  

Well, you’re confident until it comes time to talk about fees.

A client or customer comes to you in need of something. They hear your pitch or see the work that you’re doing and they seem to be on board.  

And then what happens?  

They ask you how much your product or service will cost.  They ask how much you will cost for your service.

Suddenly, perhaps, there seems to be a bit of doubt in the back of your mind.  “What if they think my fee is too much? What if they don’t like my work? What if they refuse to pay?”  What if, what if, what if…

But you were so confident about your work before the topic of money came up.  What went wrong?

Humans are polite creatures.  (Well, for the most part, anyway.)  We don’t want to burden someone with what we think we’re worth. We don’t want to sound too demanding.  What if we sound arrogant? We don’t want that.

Well, flip it around.

When was the last time you needed a service provided for you? When was the last time you purchased a product? Maybe you needed some plumbing done at home, or a repair to your car, or maybe you needed to buy a new skincare product. 

In all these cases, you were shown a product or service and given a price to pay in exchange for that product or service. Did the person providing you with that product or service seem nervous when naming their price? Did you feel they were being arrogant or demanding by naming their price? Probably not. 

Why not? Because you were being offered something of value — something desirable and helpful — in exchange for your money. And that’s business. 

There is no reason that you shouldn’t be that person, confidently handing out your quote for work you know you’re more than capable of handling at your marketing agency.

Your service has value.  And that good value is exactly what your customers want.

To confidently tell your clients you’re worth the money you’re charging, you can follow these simple steps:

  1. Determine what your work is worth. 
  2. Let your clients know what your price includes and give them proof.
  3. Believe in your service and have faith in yourself.
Illustration of a freelance professional daydreaming about money.

1. Determine what your work is worth.

Alright. So, you want to know what your work is really worth, what price you’re justified in charging your clients. Perhaps, you know freelancers and entrepreneurs with varying rates and fees, and you’re having a difficult time figuring out where your price should fall along that spectrum. 

To determine what your work is worth, you can follow a simple three-step process:

  • STEP ONE: Ask yourself some important questions. Write down your answers. 
  • STEP TWO: Brainstorm some numbers that seem right for you and your business. 
  • STEP THREE: Review and adjust your pricing as needed. 

Read on for detailed information about each step.

STEP ONE: Ask yourself some important questions. Write down your answers.

To determine how much to charge your clients, you’ll first need to figure out what your product or service is worth. 

To do this, you’ll want to ask yourself a series of questions. 

a) First of all, ask yourself how much time you spend on each item you’re working on.  

“Time is money,” as they say. So, you’ll want to make sure that what you’re charging your customers accounts for the time it takes you to provide a service or create a product. 

Start setting a timer when you’re working, and be sure to account for easily-overlooked tasks, like checking your emails, preparatory work, research, brainstorming, etc. 

If you find that you’re spending way more time than you thought on your work, this is a good opportunity to try to figure out why and make your process more efficient. 

b) Don’t forget to consider your operating expenses. 

Are you paying for insurance, software, and other items that are necessary to provide your clients with the product or service they’re purchasing? Or are you creating a product that uses tangible materials?

If so, you’ll want to make sure that your fees account for these expenses while allowing you to make a profit. 

c) Ask yourself what you think your overall service is worth.  What is the value of what you’re providing?

What would you pay for this service or product?  How is your service benefiting your client?  How easily can a client do without your service?  

For example, if you offer LinkedIn and resume creation services, you could just charge your clients a $25/hour fee, but would this capture the value of what you’re providing? Your services help people land their dream jobs, earn more money, and drive their careers and lives forward. Given this, maybe $40 – 50/hour or a marked up flat-fee makes more sense. 

d) Take a look at what other successful members of your industry are charging for similar services and products. 

What are their prices like? Do they seem reasonable to you? 

Are they offering a product or service similar in quality and features? 

Is their experience comparable to yours? 

These are all key questions.

A good place to start is by finding out who your competitors are and seeing how they price themselves. Make a list or chart breaking down your main competitors and their prices. 

If your fees are way above or way below the average market price, you’ll only raise red flags with potential customers, which is why it’s important to ensure your prices are in line with market trends.

e) Finally, consider the income and spending habits of your target demographic. 

This is an important one. 

No matter how justified you feel your fees are, they won’t do you any good if they’re outside the price range of your intended customers.
For example, let’s say you offer copywriting services to nonprofits. Nonprofits usually have tight, modest budgets, so you would need to be mindful of this when drafting your fee list.

STEP TWO: Brainstorm some numbers that seem right for you and your business.

Once you’ve answered the above questions, it’s time to think of some reasonable numbers and write them down.  

How do they look? 

You may think, “What if these numbers are wrong?”  But how can they be?  They’re your numbers, so they can’t really be wrong (well, not unless you really try to be outlandish with your pricing!). 

As long as you’ve kept in mind the information you gleaned from Step One, your pricing should be reasonable, and it’s important that you feel good about your pricing.

STEP THREE: Review and adjust your pricing as needed.

However, if you find that you’ve written some extraordinarily low figures or really high figures, or if you’re still not feeling good about your pricing, you may want to adjust. 

An old rule of thumb regarding your small business’ pricing says, “one out of five people should tell you that you’re too expensive.”  Okay, again, something to keep in mind when you’re pricing your work.

If you come across as too expensive across the board, there’s an issue.  That issue doesn’t need to be that your service isn’t worth what you would like to charge.  That issue could be that you’re appealing to an audience that simply doesn’t have that kind of money.  

So, again, just keep in mind just who your demographic is before you start creating a price menu for you and your small business.

Also be sure to take a second glance at your competitors’ pricing. If you notice a substantial difference, ask yourself why the prices are different. How are they able to charge what they’re charging?

And, again, think of how much time you’re putting into the service you’re providing.  If it’s only two hours then truly ask yourself what a mere two hours of time are worth to you.  If you have to put in fifteen hours of work for a client, ask yourself how much fifteen hours of your time is worth.

But there are a few options for you to consider before you simply look at time spent on a client’s project.

You do have the option to charge a flat fee, regardless of how long it takes to provide the work needed.

Alternatively, you could base your price on a percentage.  

You figure that the work you will be providing will garner “X” amount of income for your client and so you think you’re responsible for 5 or 10 or 15 percent of that.  And so you may ask for a percentage for your work as an agent might.

All in all, there are options.  

But more than anything else, know what your work and time are worth.

Once you know  what you should be charging your clients and have found a number you can feel good about, you’ll be able to name your price with more confidence.

2. Let your clients know exactly what your price includes and give them proof.

Obviously, people like to know what they’re paying for.

Your clients are no different.  Hey, neither are you, right?

So, before you say you will take on a project and give your client  a price, let the customer know just what your agency will be providing.

More specifically, don’t just let your client know your service’s price but let them know your specific service’s value.

And then the question becomes, “how do I justify my price and demonstrate my value?”

a) Point to your education and/or experience. 

First off, if you’re wondering why certain professions can charge a higher fee per hour, remember that that price includes a history of education and experience.  

Perhaps, before that person or company was as experienced as they currently are, they charged less an hour.  And they charged less an hour because it took more hours.  

As time’s gone on, and they’ve become better at integrating their education into the service they provide, they take into account all the hours and work that went into attaining such professional experience.  

So now, a task that once took 3 hours takes only one hour.  But that doesn’t mean your value has depreciated.  

With experience, your value has increased and you should fold the time it once took to complete a task into your current asking price.

And this is something to be open about.  You can demonstrate or show your experience and education.  You can let your service’s new clients know that they are in good, capable hands.

b) Outline the full scope of your services and what is included in your price. 

You can also provide your new customer with a detailed outline of just what your service will include. If the service you’re providing involves a ton of research, brainstorming, drafting, or other preparation, don’t be afraid to let your client know. 

Similarly, if you use highly specialized software or bring other expert insight to the table, make that clear. 

c) Let your customer know the importance of your service.  

Maybe you can provide your service in less than 10 hours. Maybe you can do your work super quickly because of your years of experience. But being able to get the job done efficiently doesn’t make it any less valuable for your client.

For example, maybe you create killer LinkedIn profiles. And maybe you can do this in 3 hours and your fee is $350. Your client might wonder how you can justify charging $350 for a few hours of work, but the price is informed by the value of your service and how it will benefit your client. 

So, don’t be afraid to stress the value of the service you’re providing. If you can, throw out numbers, statistics, and case studies to demonstrate how your service will benefit your customer. 

d) Provide testimonials or  letters of recommendation.  

This kind of social proof goes a long way with a potential client.  

After all, don’t you like to know that others like a brand or product before you invest in it?  How many restaurants have you tried because someone you knew recommended it?

If your potential clients can see that other members of their industry or community have paid for your services and been fully satisfied, they are more likely to feel comfortable with your pricing. 

e) Above all else, be transparent about your pricing. 

Let your customers  understand why you charge what you charge. Don’t be afraid to answer their questions and defend your pricing to the best of your ability.

The only time anyone ought to be nervous about talking about their asking price is because they’re not confident that the work they provide is worth the sum they’re requesting in return.

By letting your customer know exactly what experience you and your team have, and letting them know exactly what you and your team will be providing and just why what it is that you’re providing is so important, there is absolutely no need to feel guilty or shy about asking for your compensation.

So, let your client know who you are, what your experience is, and why you’re worth the price you’re charging.

This, along with confidence, goes a very long way.

3. Believe in your service and have faith in yourself.

We freelancers and entrepreneurs tend to talk too much. 

We like to talk about what we’re worth.  We also end up trying to sell our services to our clients.  We try to talk someone into working with our small business.

And once all this talk has begun, we also tend to keep going even after we’ve named our service’s fee.  We say a number and then begin to immediately explain why our agency’s work is worth that.  This does not demonstrate confidence.

But the ticket is to show your clients what you’re worth, not just tell them about it. 

You are not trying to ‘sell’ a client on why they should work with you.  Never try to talk someone into something.  This shows a lack of confidence and can come across as disingenuous. Gone are the days of aggressive sales pitches and slick tactics. 

You know exactly what you bring to the table, and you know exactly what you will be providing for your customer.

Listen to your potential customer about what they need, what concerns they may have.  Address them. Do the best you can to respond to your customer’s inquiries and feedback, but don’t beg, don’t over-justify your pricing. 

Again, take your experience into consideration.  

Take your time and effort  into consideration.  Take your value into consideration, which is everything you bring to the table, and then —

Just say your price.

Explain your services and the corresponding price, then stay silent.

Often, we as a people, before we ask for anything, are already apologizing. There is often a sense of, “oh, sorry, but I’m afraid my work is going to run you X amount.”There is no reason to begin with, “sorry, but….”

That “sorry” can put a customer off or, at least, make them want to bargain you down.

So, be prepared to either stand firm with a fee or have a range in mind. Of course, if you are open to a range, you’ll start off by quoting your customer at the higher end of your range.  But know, quietly anyway, how low you will go and stand firm with that.

And don’t be afraid to say, “I’m sorry, I can’t go that low” if this prospective customer isn’t willing to pay your fee.  That’s when you can say, “sorry.”  Don’t be afraid of walking away.

You’ve already done the work, you’ve shown this to your customer, and by this point, they ought to know exactly what your value is and they ought to know exactly what your agency will provide them.

There is no need for further explanation.

Now, the above may seem harsh or cold but there is no need to see it as such.

There is no need for you to be anything but professional, helpful, and friendly.

Combine those traits with confidence and utter belief in the work of both yourself and your full-service marketing agency, and you should have no reason not to believe in yourself and your work when talking fees.

And don’t be afraid to let potential customers walk away. If it’s not a good fit, it’s not a good fit.

Summary

Be confident.

That’s the key.

And that confidence is not something that should need to be ‘mustered up’ or manifested.  

That confidence should simply be there.

Why? Because you offer a lot!  You know you and your team have the experience.  You know how to do the work and you know you’ll get it done and please your customer.

There are no tactics, no tricks, no ‘sales’ pitches.

There is only your excellent work and the demonstration of your relevant experience.

If you believe in your service and you know what you’re doing, you should be confident in your pricing. Feel confident enough to put your well-thought-out price out there and don’t allow yourself to feel embarrassed or arrogant for asserting your value. 

Consider this example: Have you ever wanted an item of clothing that you thought was perfect?  Have you ever wanted that perfect pair of jeans but then hesitated because of the asking price?  Sure.  But if you did indeed purchase that pair of jeans, did you think of the price every time you put them on or did you think about how great those jeans looked on you?

Well, if the jeans were as great as you believed them to be, then you never thought of the asking price again once you zipped them up.

It’s the same thing with a great service.  Someone is working with you because they know you’re  the one to provide them with just what they need.

If you do a great job, then you, in essence, become that pair of jeans.  Your customer won’t think of the price again as they move forward, satisfied with whatever it was that you provided them..

And don’t forget; whoever you’re providing a quote for has been in your position as well.  At some point in time, your customer has had to ask for a certain amount of money for the work they’re currently doing, be it from their boss, another customer, or whoever else.

Everyone has had a point in their careers where they had to let someone else know that they knew what their value was.

But you know you have the experience and the know-how.  You know your team will get the job done.  So there is no reason not to believe in your work or in yourself.  You know what you’re worth, and so the price is just a detail.

Now, go get it.

For more helpful small business guides, resources, and tips, you can check out our blog here.

Or, for a free, no obligation consultation for our branding, digital marketing, copywriting, editing, or proofreading services, you can get in touch with us here.

Article By: Steve Chambers & Jess Blackwell

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