How does one know if their pricing is inline with market trends?

Question

I'm not seeking dollar amounts nor how to calculate pricing.

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I'm curious how freelancers determine if their own pricing is within a good range of current market trends.

I can have a conversation with a client about scope and demands. It can all be clear and a quote/bid can be provided. I then may or may not get the work. The quote is in line with my current pricing and I neither feel I'm under or over pricing the work for myself. There's an old adage that "if you win every bid, you're pricing too low." and I typically keep that in mind.

However, if current market pricing has a variant of, oh say, 30% or more, I may be doing myself a great disservice by not setting my rates correctly. If everyone in the market is pricing similar work 30% higher than me, I'm greatly undervaluing my services, even if my pricing formula correctly calculates things based on overhead, experience, skill, etc. Or, if my experience and skill is much greater than median market experience, I may be priced too low due to that aspect.

It's very difficult to get accurate pricing from competitors for similar projects.

Crowd-sourcing sites aren't "real-world" pricing to me. They are very low-end pricing for almost everything so as to remain competitive in those specific arenas.

So, other than "pretending" to be a client and contacting someone to quote the project for you... How can you gage what competitors are pricing similar work at?

Answer 1

This might be bit of a non-answer, as pricing is notoriously difficult.

As you already hint, there's not much else to do than give them a high quote and see how it goes. Even if you could get some seemingly relevant data regarding the pricing of your competitors, who's to say the data is accurate and still relevant? Trial and error is almost all that's left. Even among seemingly similar companies the ability and willingness to pay may be vastly different.

Having said that, I find the only reliable source to be other freelancers with similar experience - and it's easier to compare prices when you are not in direct competition. Having informal discussions over a few beers can yield useful information. I have usually started by admitting how little I've worked for and then revealing the best deal I ever had. Hopefully the discussion will then trend towards some median.