“What are your rates?”
This common first question from a prospective client is one freelancer dread.
It signifies immediately that the prospect perceives your freelancing services as an expense rather than as an investment. They see the price first and foremost rather than the value behind what it is you do.
For any freelancer looking to earn good money, it’s essential to position the value you will bring to your clients’ lives as the primary reason for people to get in touch with you. Pricing becomes a secondary matter as they see your skills and talent as essential for their project.
The above positioning is what is known as value pricing. Value selling is pricing determined by the value of the outcome of your freelancing skills to your client’s business. It’s the opposite of calculating your price solely based on how many hours a project will take.
Value pricing involves estimating how valuable you will be to the client’s goals. For example, if a client is likely to make x5 more money as a direct result of your services, then it makes sense to charge at least 15% (if not more) of your client’s estimated revenue for year one.
If a client expects to profit by an extra $100,000 after 12 months due to working with you, then a value-based freelancing fee starting at $15,000 is entirely reasonable.
Benefits of value pricing for the freelancer
Pricing based on value – or value selling – is beneficial in several ways for you as a freelancer.
As a value-driven freelance professional, you get rewarded for speed and efficiency. As you gain more experience and expertise in your craft, you are naturally faster and more effective at producing excellent results.
You’re also able to earn more and work less, as you can move through your billable tasks at a greater speed. This per project pricing strategy is the best way to achieve a dream freelance lifestyle.
Value-based projects naturally attract the best clients. These clients are usually a lot more respectful of you as a professional than those who seek the cheapest freelancers around. They are also more likely to remain long-term or repeat clients.
And finally, there’s less admin to do and fewer invoices to send when charging by the project instead of hourly. You simply need to send a deposit invoice before work begins and then a final invoice at the end.
Benefits of value pricing for the client
More and more people are beginning to understand the merits of value-based pricing as opposed to time-based fees. Prospects realize that freelancers who race against the clock will be more likely to produce less than stellar results.
Clients increasingly prefer a professional who will take time over their project and deliver excellence based on experience and expertise.
Clients also appreciate value pricing because they know the price of their project upfront. It’s a challenge calculating how long a project will take, and there’s a lot of uncertainty about just how much the final fee will be.
There are no hidden costs with value pricing.
How to position your services based on value
Positioning yourself based on value instead of affordability is about modifying the way people perceive your personal brand. If you don’t focus on presenting yourself as the best value, then prospects only have price left with which to judge you.
The more you focus on the value your services bring to your target audience, the less important price becomes. This mindset is key.
Your market’s perception of your value all starts with your brand and its messaging.
Develop strong brand messaging
When you think of branding it’s easy to picture a nice logo and color scheme. Yet branding is a lot more than the design. The most essential aspect for successfully selling your value is in the words you used.
Clear, consistent, and benefits-focused messaging positions you as the expert your clients need. With strong copywriting, intelligent positioning, and consistent marketing, the perceived benefit of working with you should far outweigh any issues relating to your fees.
Carve out a niche focus
Another way to attract attention and position yourself as an expert is by developing a niche focus. People trust those they perceive to be experts. Prospects pay experts accordingly. They expect the specialist expert freelancer will help them achieve the best results they need.
Value again automatically comes before price.
Build a portfolio and create case studies
Part of creating a perception of value is showcasing how you have helped similar individuals or businesses in the past. A successful track record is highlighted in a carefully curated portfolio, glowing client testimonials, and informative case studies.
Intelligent brand positioning, combined with genuine professionalism and proof of past results, is an effective way to position yourself based on value first and price second.
Attracting clients with value selling
The best clients don’t buy services. Instead, they buy the results those services will give them. When you market your freelance business based on your value, you will begin to attract the clients and fees of which you dream.
Selling value instead of focusing on pricing allows you to charge what you are worth. Price becomes a secondary or tertiary consideration, with prospects often enthusiastic about paying whatever is required to get you on board with their project.
Remember, if you don’t focus on value, the only differentiation left is price. With price, it’s always a race to the bottom.