You’ve found a client. You’ve scaled through the initial hurdles of getting a freelance gig. However, a seemingly trivial problem is now obstructing your path to earning your first paycheck from that client. You must negotiate a favorable freelance rate without sounding ridiculous.
If you find yourself in a situation like this, here are some tips to help you negotiate as a freelancer and get that big paycheck you’ve been dreaming of.
1. Research Your Pay Rate
Before going in for pay negotiations, you should clearly know the pay range for your role within the industry you’ll be working in. Your expected pay rate should also be commensurate with your skill level. The same industry roles might have different pay depending on skill level and experience. You’ll typically find labels like “entry-level,” “junior,” “senior”, or “associate” attached to roles to signify the skill or experience requirement.
But how do you determine what people in your industry with similar experience and expertise are earning? You can use a combination of tools like Freelance Rate Calculator, PayScale, Glassdoor, LinkedIn Salary Tool, Indeed Salary Explorer, and Salary.com salary tool. You can also politely ask other freelancers with your experience and similar expertise for their pay rates.
Some good places to find freelancers in your field are Facebook groups, Telegram groups, and other online communities centered on your freelance niche. If you wish to charge on an hourly basis but need help with how to do the math behind it, read this article on how to properly calculate your freelance hourly rate.
2. Determine Your Minimum Rate
The data you’ll get from researching pay rates in your industry isn’t going to be fixed, hard rates. Most times, it is going to be data from salaried roles. Once you get an idea of the average rates, it’s up to you to use that data to decide on the lowest rate you’ll be willing to accept, considering your expertise, experience, and responsibilities required for the job.
But doing this isn’t as simple as it sounds. You’ll need to reflect on your deliverables, the value you offer, your job-related expenses, and yes, the quality of life you desire. This is not a law, but your job-related expenses shouldn’t exceed 35% of your Minimum Acceptable Rate (MAR) as a freelancer.
Also, you don’t necessarily need to base your MAR on what your full-time salaried counterparts are earning. You should earn more if possible, considering the extra expenses you’ll accrue as a freelancer. Always deduct potential Wi-Fi costs, power bills, transportation, and other logistics from your MAR. The remainder is what you’ll truly be earning. Here are some other things you should take into consideration when setting your freelance rates.
3. Be Strategic in Timing
Timing is very important in negotiating higher pay. There are periods when a client or potential client will be more willing to agree to a higher pay rate. If you’ve recently completed a task beyond or within the client’s expectations, it could be the right time to chip in a request for a raise.
You can also plan your request for a higher pay rate to coincide with when your client decides on their annual or quarterly budget. Start talking about it ahead of time, some months ahead if possible. No one wants to be ambushed with a sudden rate hike. If you are negotiating with a first-time client, the time to talk about pay should ideally be when you’ve demonstrated your abilities to your clients.
This could be by showing them impressive projects you’ve completed or detailing what you offer that’s not generally available. Clients will be more willing to agree to a higher pay rate when they’re convinced you’ll be capable of impacting a value commensurate with the pay rate.
4. Use a Favorable Communication Medium
While many experts typically recommend a one-on-one conversation, the best channel for payment negotiations depends on what works for you. A video call is the closest to a one-on-one you’ll get in the context of a remote negotiation. How does a video call favor you? If you are comfortable with one-on-one conversations and can easily discern body language, video calls can work in your favor.
A video call enables you to listen to your client’s views, gauge their body language as you suggest a pay rate, and mirror their tone to your advantage, all in real-time. A voice call works as well, although not entirely as effective as a video call. If you have cold feet about video calls, you can rehearse your selling points ahead. Communication skills are one of the essential skills you’ll need to succeed as a freelancer.
Text-based communication channels like emails also have their advantages. Real-time conversations can put you under pressure while negotiating. It gives you less time to ponder before dropping arguments. Channels like email give you the time to access your options and consider your expenses before settling for a rate. It’s all a matter of personality and what works for you. You can even adopt multiple channels if there’s room for such. The better the communication, the more effective the negotiation.
5. Be the First to Ask
For fear of sounding too money-grubbing, you might feel it’s better to keep aside the topic of payment till your client brings it up. However, it could be better to seize the initiative and bring it up first in order to control the tempo of the negotiations better. Politely asking about your client’s budget for a project helps you reduce the possibility of underselling yourself. It also helps by pushing the pressure of negotiation on the client.
But what if the client asks before you get the chance to? If it’s a project requiring a small budget, especially a project that typically has a somewhat fixed pay rate, you can tell them how much you charge. However, to ensure you’re getting the best deal, you can subtly and politely turn the question back on the client without quoting a figure. How? You can say something along the line of:
1. I need to understand more about the scope of the job, and other possible benefits and expenses I may accrue to be able to quote a figure. What is your budget for this project?
2. I’m sure we’ll come to an agreement on the issue of compensation once we can clarify pending issues in every aspect of the project. Can we revisit this topic once we establish a clearer idea of what needs to be done?
3. My rates are flexible, and I can adjust to each client’s unique requirements. What is your budget range for this project?
4. I would love to be fairly compensated for a [insert profession name, e.g., writer, web developer] of my experience and talent. However, I’m open to some adjustments based on your budget. What’s your budget for this project?
Of course, turning the table on the client might not always go as planned, so have a pay rate ready.
6. Have a Fixed Rate in Mind
You’ve probably heard that it’s better to tell your interviewer a salary range rather than a fixed rate during an interview. That makes perfect sense in a salaried position. As a freelancer, you should definitely have a range in mind, but tell your client a fixed rate. It’s a negotiation, and offering a range to your prospect might seem okay, but since your client would be trying to protect their own interest in spending less on the project, they’ll typically go for the lower end of your range.
Also, offering a range, especially a range with a huge gap, might send the wrong signals to your prospect. It could be mistaken for either desperation to score a gig or to be indecisive. However, if your client pushes for a pay range, attaching extra deliverables to your upper pay range might help push them toward your upper bounds. Sometimes, you might not necessarily need to attach extra deliverables. Simply emphasizing what they’ll get at the upper pay rate can do the trick.
7. Present Your Factual Contributions
If you’re dealing with a repeat client, create a summary showing how much value you have added to their project during your engagement. Did you bring in more revenue? Did you solve a tough or recurring problem? Highlight everything you’ve excelled at and gone beyond while working for the client. The idea here is to emphasize the value you’ve added to the client.
If you’re dealing with a new client, you’ll need to prove you can add significant value to their project. One way to justify a high rate is to throw in your accomplishments. If you are being hired to replace an underperforming freelancer, you can emphasize what will be different going forward.
Seek a Mutual Outcome
A successful negotiation should establish a win-win situation for both parties. You deserve commensurate compensation for your skills and effort. However, always try to meet the client halfway if negotiations go further than a few rounds.
Making a client give in reluctantly isn’t healthy for a professional working relationship. Regardless of the client’s reception to your rate proposal, stay positive and professional.