5

I'd like to get some experienced freelancers' thoughts on this...

Recently I've found the amount of work coming in running very low, to the point where I've been having to consider taking at least a part time job again.

My regular, well-paying clients are either away, don't have any work, or are cutting back, so I'm now only being approached by first-time potential customers.

There's a pattern emerging: they get in touch, get really excited about my work, tell me what they are looking for, and I give them a quotation based on this, and a fair rate for my expertise.

Then I either get a "sorry, it's too expensive.." reply, or never hear from them again.

Now I know that I'm not cheap, but I'm nowhere near as expensive as an agency or even some other freelancers I know. It seems that I have a choice, either to drop my prices to get at least some work (although I'd be earning well below a decent wage, barely enough to live on) or not get any work at all, do some amazing stuff for my portfolio, and delve deeper into my savings and overdraft in hope of better times.

Should I drop my prices to a (IMO) ridiculously low rate just to get the work and bulk out my portfolio?

  • where do you get your customers? the rates purposed on some freelance sites are a joke – Rui F Ribeiro Aug 16 '16 at 22:11
5

You'd be better off trying to pick up some work through recruiters than ridiculously lowering your rate. The longer you stay in projects where the client doesn't value your work, the more annoyed you'll become because the client will continue to be unreasonable.

Usually, this type of client is clueless and will work on the premise that you deliver million-dollar solutions at a fifty-cent price. Raise your sights a little higher, and avoid cheap-skate clients like the plague! I can't guarantee that you won't have some challenges along the way, but it's a better situation to have a challenge where you "grow" vs a challenge that stresses you out and only gives you the minimum reward.

3

There's really no solid information to go on here.

Not sure what "ridiculously low" means... 80% your normal rate? 50%? 25?

No clue long have you been in the field? If you are pricing to match those with 10 years experience in your field and you have 2 years experience... then you may need to evaluate that. Being "not as expensive as an agency or other freelancers" means nothing really. Clients looking to hire an agency aren't looking to hire an individual freelancer - different markets. And unless these "other freelancers" have the exact same knowledge and experience as yourself, their pricing is somewhat irrelevant. No totally, but to a degree.

No idea how proficient and skilled you are at whatever you do. You may feel justified in your pricing, but that doesn't mean the rest of the world does. In addition, you may feel your work is stunning, be-all-end-all work. But if clients aren't returning, it would seem that they feel the work isn't worth the cost.

No clue where your clients are coming from. Some client farms (freelance websites, craigslist, etc) are always going to be populated with a plethora of "dirt cheap" clients unwilling to pay anything they feel is unjustified. If you are gaining clients from these areas, that may be the issue entirely.

I don't have any clue as to your financial standing. (Not asking for it either). If you haven't been tucking money away during the good times, you've been slacking. The nature of freelancing in my experience has always been "feast or famine" -- too much work or not enough. You have to plan during good times to compensate for the slow times. Failing to do this will inevitably put you in a rough spot when a slow period hits and you are financially drained.

I don't know how you price -- Hourly rate? Value-based? Long-term contracts?

The truth of the matter is, if you feel you are priced out of your market, then you've got to adjust something. Thinking you are worth $X is quite different than clients beleiving you are worth $X. Heck I feel I'm worth 2 to 3 times my rate... but that doesn't mean clients will pay that for the work I do. And I know clients gained from some resources would never pay my pricing. So, I don't use those resources to find clients.

While it's true that most clients will always want a lower price, if several of them, especially existing clients, are not returning they are telling you something. There's an old adage that states, "If you get every project you bid on your rates are too low." and the opposite is true as well, if you don't get any project you bid on, your rates are too high.

First thing to do is Fire Your Hourly Rate if that's how you are pricing. By not telling, or pricing work for clients, on disclosed hourly rates, you create some flexibility with your pricing.

What this does is allow one to adjust pricing as workloads change. If there's a need for work, project pricing can easily drop 20%. This is much different than dropping an hourly rate 20%. We all know that once you drop an hourly rate for a client is very difficult to ever raise it for that client later. And conversely if there's an overload of work project costs can easily be increased by 20% to deter some smaller projects.


In the end, only you know your pricing, abilities, and market. And only you can take an honest, open, look at your work and determine if you can ride out the slow period (both financially and emotionally) or drop pricing to hopefully gain work.

I know it can be difficult during slow periods. But I can't tell you if you should lower your prices. I don't know how anyone could.


From a personal standpoint, I have noticed a drop in my workload during Q1 and Q2 of 2016. My larger clients slowed a bit and haven't had a great need for new projects. What they have done this year is determine previous items worked well so they are merely reusing older projects with minor changes. I don't make as much on changes to existing items as I do on new items. It does happen. But they are returning in Q3. Point is.... slow times happen. Don't expect to always have enough work.

Completely random prediction... the last slow period I had which comes close to Q1/Q2 of 2016 was in 2006... a year and a half later the housing bubble popped and everyone felt the crunch. So... since Q1/Q2 of 2016 were slow here, does that mean another bubble is going to pop end of 2017/beginning of 2018? Hmmmm....

This is all just speculation. You actually may be a rock star who is absolutely worth your pricing. I don't know.


Additional:

If you're in the design field, one of the more difficult things to do is to create some residual income with a multiplier. Something you can do once, then sell multiple times - art, templates, books, training, t-shirts, etc. This takes some effort. And I struggle with it myself. So, I can't offer any solid venues for this. However, finding and maintaining something, anything, that you can sell or collect on without having to directly work on it can be a great cushion for those slow times.

  • Thanks for your answer Scott, lots of really good points here. A lot I can't answer in public forum, however I am experienced in my field, come from a Design Management background where I was regularly working with freelancers (so know the whole spectrum of rates in my area) and am sure that my rates are not extortionate, and in fact are often fairly reasonable. I've been told by my peers in fact, that I should be charging more. The sort of rates these potential clients are looking for would equate to approx £5 per hour, which is way too low! – crazycatlady Aug 18 '16 at 15:07
  • @crazycatlady like I posted, you may be a "rock-star" worth every penny. I don't doubt that. The market itself can easily start presenting horribly cheap clients. I've been there. It really just comes down to being able to ride it out while you invest time in trying to land good clients rather than just any client. Wish I could offer some solid solutions, but I don't really have any other than to trust if things were good before, they'll get good again. – Scott Aug 18 '16 at 17:07
2

The temptation is always to lower rates when work isn't coming in. My rule of thumb is to only lower rates if you can get the job by lowering 5% or 10% max. Otherwise, it's just the wrong kind of customer and they will never pay you the rate you're really after.

It's interesting that clients love you and are scared off by the final quote. What's worked for me in those situations is a change in sales strategy. There is a concept called 'sell something small first'. Make it easy for the customer to start working with you. Don't lower your rate but break the project into smaller pieces and sell them on the first piece only. Result: Trust is built up and the price seems smaller. This has often lead to more income compared to selling the single, larger project.

You could even try this with some of your recent rejections. See whether you can split a small (but useful) piece off the entire project, cost that at your normal rate and sell that as a stepping stone. Just because that deal didn't go through doesn't mean they found someone else + they clearly already know and like you. Good luck!

1

In my opinion (and experience having done exactly this a few times) it depends on whether this is project-based work or an ongoing commitment. There's nothing wrong with giving somebody a one-time "discount" especially if you're not particularly busy (nobody needs to know what you charge other clients*).

The big question is do you think it's worth your time and effort (e.g if you won't be able to pay the bills, not worth it). If you're committed to pursuing the freelance route, sometimes taking a gig for less is a way to stay on the path without taking a step "backward" and committing to a full/part time job. Not to mention it potentially gives you something you can add to your portfolio (if you need that).

All of that said, if its an ongoing gig (like a PR retainer or even a long-term project) you can run into trouble down the road if you start onboarding other clients that are paying full freight and you're stuck juggling time between them. You can also run into issues if they want more work later on: "but you did X and that was more complicated than this new project, but you want double the price for it. What gives?!"

*The exception of course is if they start referring you other clients and share "what a great deal they got" with your potential customers.

1

Are you selling a Rolls Royce to someone that only wants a van?

The question you have to tackle, and you have to get used to asking or at least working out, is "What is your budget for this?". Then you tell them what you can do to achieve their goals within their working budget. Or you give them two options, one slightly under their budget so they can save some money, and one above their budget, so they can dream or stretch themselves a bit.

But you do not decide how much your skills are worth, the market does.

Find out where the customers went, what they paid and why you didn't get the work. Call them. Ask them for feedback. Email them but speaking is better. Wish them luck, tell them you are still there if they need you and offer a gift for any referrals.

A lost proposal is not the end of the road.

I hope that helps,

Paul.

  • You're missing something here Since you used cars, here's a question. What's the difference between a Toyota and a Lexus? They are made in the same plants. A high number of the parts, and maybe even the framework, are identical. What separates them is POSITION. Lexus is positioned as luxury, but Toyota is positioned as economical. We command our rate based on how we position. A strong position can trump "market forces" any day. – Xavier J Aug 17 '16 at 3:15
  • :-) Good point. You have to position yourself somewhere. But there are differences between the finishes, the interiors, the accessories etc for the lexus and toyota. A budget website may be built on the same framework as a luxury website, may have a unique design too, use the same hosting and server environments. The difference between the two may be that the luxury version emails abandoned baskets, includes SEO research, on-site implementation, writes orders to an FTP file for integration with accounts, customizes the product listings, etc etc. Again why I suggested he offer two solutions. – PaulD Aug 17 '16 at 17:08
  • @codenoir, it's funny how about a month ago, I was telling a Lexus owner that in my country, Toyota is a luxury car Lexus are nowhere to be seen. I am not trying to add value to your comment or the analogy, although there might be some. – AlejoBrz Aug 29 '16 at 19:15
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I think you are looking at the wrong choices - you are debating whether to take work at a low rate or no work at all.

There is a third option - to learn skills as to how to market your services to a different market. There are always clients looking for the cheapest option - who are indifferent or ignorant of different product quality. But there are also clients who are looking for top quality, or at least good quality, and are prepared to pay for it.

If you have some spare time now, I recommend using it to find out how to market yourself to the quality seekers in your field and country.

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