|
Keep fees flexible
to maximize your business
Teacher: David
Perlstein
Free agents always ask, "How
much should I charge?" Aside from the obvious, "As much as
you can," I answer that fees or hourly rates depend on your
industry, experience and expertise. But just as important as
what you charge is how you charge.
Navigate the marketplace
Every fee (or hourly rate — I'll
use "fee" only from now on for brevity's sake) is negotiable.
In the souks (marketplaces) of the Middle East and North Africa,
haggling is a way of life. It's the same in North American
business.
Even in the same company, two
clients might pay different fees for exactly the same project.
They'll measure value by their available budget, the project's
urgency, a perception of your abilities and even whether they
had a good breakfast.
Over time, you'll find that similar
jobs earn fees within a given range. For example, I usually
estimate writing a direct mail package at between $2,500 and
$3,500. Sometimes, I charge more for a difficult project or
less for an easy one.
You should maintain flexibility
because:
- Insisting on a single fee
or range that's perceived as too high can overprice you out
of the market.
- Lowballing your fees risks
underpricing yourself — big clients see you as
fit only for small, cheap jobs and not qualified for
the big, lucrative
projects.
Take into account the size
of the company and its budget
Social service agencies often
establish fees on a sliding scale based on ability to pay.
Smart free agents do the same. Create a three-tiered grid with
a sliding scale for large, middle-size, and small clients so
you always get paid fairly.
- Tier I: My largest
corporate and agency clients pay the highest fees.
- Tier II: Mid-size
corporations and agencies pay a bit less unless they're
working with budgets
at the Tier I level — and many do.
- Tier III: Small agencies
and clients. They generally pay my lowest fees. It's what
they can afford. But I never drop fees in this tier below
levels that reflect my worth or become unprofitable.
Free agents also ask, "Is it
fair to charge different fees to different clients for the
same type of job?" It is! Start your grid from the top down.
I ask Tier I clients to pay the full worth of a job. I haven't
inflated my price. Gouging clients is both unethical and bad
business. I reduce my fees in Tiers II and III because other
clients have more limited resources. I'm giving something up
in return for that particular job and the opportunity to establish
or maintain a long-term relationship. And relationships build
businesses.
Put it in writing and take
control
Put your fee grid in writing
and keep it updated. Maintain it in privacy, then use it as
a reference for your estimates. You can always raise or lower
an estimate based on conversation with a client, but you'll
appear consistent. And after being asked "How much?" you won't
be caught in an awkward pause that makes clients wonder if
you do want to gouge them or simply aren't in control of your
business side.
Finally, what if a client offers
a fee that's higher than the one in your grid? Accept it gracefully
and without comment, then use it as the baseline in your relationship.
Athletes and entertainers have
their own agents to represent them, but you have to do it all.
Grid your fees and take greater control of your income.
About the teacher:
David Perlstein
has been a freelance advertising copywriter in San Francisco
since 1979. He is the author of SOLO SUCCESS: 100 Tips for Becoming
a $100,000-a-Year Freelancer, Crown Publishers, New York.
|
