In Episode #4, Austin L. Church takes you back to April 2009 when he first started his freelance journey. Two weeks after getting laid off from his job at a marketing agency, a potential client named Andrew asked Austin this question:
"What do you charge?"
He chose $40 per hour as his rate because his agency had billed out his time at $85 an hour. If he charged half, then maybe clients would feel like they were getting a good deal.
Does that describe you now? Are you one of the many freelancers who think clients only want a good deal?
Chances are, you're charging less than you could be.
This episode will give you the chance to ponder your current pricing, identify your mental traps, and start upgrading your limiting beliefs.
To get paid what you're worth, you’ve got to take your head trash to the curb.
Show Notes
"What do you charge?"
A potential client named Andrew asked Austin that question when he first started freelancing.
Austin had just been laid off from his job at a marketing agency, and he chose $40 per hour as his rate because his agency had billed out his time at $85 an hour. If he charged half, then maybe clients would feel like they were getting a good deal.
He wasn’t confident in that rate though and would have agreed to less. With only $486 to his name, he was desperate for a paying freelance gig!
Does that describe you now?
Are you one of the many freelancers who think clients only want a good deal? Do you come down on price when clients push back? Do you feel like you have to charge less than the next guy or gal to be competitive?
Chances are, you're charging less than you should be.
But how do you know how much your work is worth? What are the actual costs of doing business? Who even decides these things? Pricing our services can feel like pulling teeth.
Here's something to think about:
Steve Jobs once paid a designer named Paul Rand $100,000 to create a logo for NeXT Computing. You read that right—$ 100,000 for a logo. In 1986.
Was Paul Rand’s work a hundred times better than the designer who charged $1,000?
Of course, not!
Talent or skill can’t explain a 100x higher price. So what gives?
What we’re able to charge often comes down to our confidence and mindset. Our target audience is certainly a factor too. What value do clients in that market or niche put on the outcomes you deliver?
Things are worth what people will pay, and what people will pay goes up with perceived value. Perceived value goes up with perceived expertise.
If you aren’t satisfied with your prices or your freelance income, you need to reassess self-imposed psychological barriers.
What if you knew that shifting to a particular pricing strategy could help you stand out from the competition? What if you were confident that your freelance pricing were sending the right signals about your brand, services, and value?
Your pricing strategy can attract the types of clients you want.
This episode will give you the chance to ponder your current pricing, identify your mental traps, and start upgrading your limiting beliefs. To get paid what you're worth, you’ve got to take your head trash to the curb.
If you do nothing else, follow the advice Andrew gave me: raise your prices.
Key points
- Intro (00:00)
- The great recession and my journey into freelancing (00:37)
- Learning about value-based pricing from an unlikely source (02:42)
- The most important lesson I learned from this experience (08:09)
- Price-sensitive vs value-focused clients (11:30)
- What signals are you sending with your prices? (12:55)
Notable Quotes
“When you’re in a vulnerable moment, you really appreciate people who don’t take advantage of your vulnerability – but instead take that opportunity to elevate you.”
“When you’re coming out of any type of job where your work has been commoditized or devalued, you may have already gotten into the habit of devaluing your work yourself.”
“You’ll find it easier to build a profitable business with value-focused clients who will like the quality, experience, and professionalism you deliver.”
Resources mentioned in this episode:
Listen, rate, and subscribe!
For specific beliefs, principles, and practices you can use right away to make the freelance game more profitable and satisfying, subscribe to Freelance Cake podcast on Apple Podcasts or wherever you listen to podcasts!
What is Freelance Cake?
This podcast helps ambitious freelancers get better results with less effort. We reveal the specific beliefs, principles, and practices that give you better leverage. Every episode contains no-hype, non-expiring ideas that you can use right away to make the freelance game more profitable and enjoyable.
[00:00:00] Welcome to the Freelance Cake Podcast. I'm your host, Austin L. Church. The goal of this show is to help full-time, committed freelancers get better leverage.
[00:00:12] As the sworn enemy of busyness and burnout, I have no desire to see you work harder. Instead, I reveal the specific beliefs, principles, and practices you can use right away to make the freelance game more profitable and enjoyable. So chill out and listen in, because the best is yet to come.
[00:00:37] I wanna take you back to April 2009. That is when I first started my freelance journey. And it wasn’t by choice.
[00:00:46] I got pushed forcibly out of the 9 to 5 nest when, on a Friday, I think it was Friday, April 20th. My boss who was the principal at the digital agency where I was working, called me into his office and let me know that I no longer had a job.
[00:01:05] Great! So just to give you a quick history lesson. This was 2009 when a lot of the recession in 2007, 2008 was starting to become evident.
[00:01:20] So a lot of people had known about the recession for some time but the trickle-down effect was really starting to hurt marketing and digital agencies.
[00:01:30] So I couldn’t really blame my boss. I couldn’t really be upset at him. He was just making a business decision. But that suddenly meant I was out of a job.
[00:01:41] And to make matters worse, I had $486 in my bank account. That number seared into my memory because when I actually looked at my bank account, probably very quickly after realizing I was losing my job, I had that freak out because I thought I’m so stupid.
[00:02:07] I’ve made more money than this, where is that money now? I really should have been saving for a rainy day! Aaaarrrrgh!
[00:02:14] Like, you know, you have that moment where you are beating yourself up, you know, you shouldn’t be beating yourself up, you should be proactive, you should be pounding the pavement, looking for my next job, and all the things but my head was just spinning.
[00:02:30] And so I packed up my things on a Friday and I went home. And I got to just sort of soaked in all of that uncertainty over the weekend.
[00:02:42] Well, fast forward a couple of weeks and I got a meeting through a mutual friend, a guy named Dan, I got a meeting with an agency owner named Andrew Gordon. And I was thrilled because it’s not like I had a lot going on, right?
[00:03:02] I mean I had plenty of time on my hands and the idea of having a meeting, any meeting, with someone who could potentially pay me to do some writing work for them, was… it was a very exciting prospect.
[00:03:17] So I don’t know if this is irony or somehow poetic justice but Andrew’s office, I found out, was on the second floor above my old office, the old agency office.
[00:03:30] And so I actually had, in order to go up the stairs to get to Andrew’s office, walked past the floor-to-ceiling windows at my old office. And I’m sitting there imagining my former co-workers looking at me through the windows and being like “Why is he back here?”
[00:03:51] So I don’t know if I’d call it a walk-of-shame but I certainly felt self-conscious as I walked up the stairs.
[00:04:00] And Andrew had asked me to bring my writing portfolio with me. I mean how cute, right? I had 6 months of experience. I’d gotten a job in October 2008. I’d gotten laid off in April 2009. So I had 6 months of experience working at an agency.
[00:04:24] Before that, I had taught high school English and then gone back to grad school and I’d gotten a master's in Literature with a focus in creative writing. My thesis was a collection of my poems.
[00:04:37] So how cute that this little writer showed up with his portfolio and I had actually printed it out. Darling, right?
[00:04:48] So I get into Andrew’s office. He stands up. We shake hands. He’s a tall lanky guy, looks like a runner, with sandy-reddish hair. I think he had a bit of a goatee at the time. He was very nice, did his best to put me at ease but I could just feel all that energy and adrenaline in my body and I was kind of jittering because I’m like “I really need this to work. I really need something to happen here. I really need some money. I’m desperate.”
[00:05:23] So I sit across from Andrew and I watch as he thumbs through my portfolio. And if you have ever been in this position, you know it is agonizing watching someone else review your work.
[00:05:40] And what are you supposed to do? Like lean over his shoulder and make remarks? “Oh, that was a project that I did for a bank.” No, you’re sitting there with your legs crossed trying to feel some semblance of professionalism. You’re not gonna look at your phone.
[00:05:56] Anyway, so he kinda nods his head and he looks up and he asks me the question: “What do you charge?”
[00:06:09] And I thought “Oh, here we go.” Because I was maybe 2 weeks into freelancing at this point.
[00:06:19] In terms of what I charge, there was a rate that I gave my old agency – $40 an hour – to finish some projects for them that I was in the middle of when I got laid off.
[00:06:32] But I… I mean, I would have taken $10 an hour. I would have taken $15 an hour. I did not know what the “going rate” or competitive market rate was for copywriting. I was desperate.
[00:06:46] But because I had already thrown out $40 an hour to my old agency principal, that’s what I told Andrew. $40 an hour.
[00:06:57] And he kinda nodded, thought about that, and then he said “Can I give you some advice?” Now it should be noted that anyone who actually asks permission to give you advice is generally a stellar human being across the board, right?
[00:07:15] Like, this is a leading signal, this is a very positive sign and so I said “Sure.” He said, “Your work is actually pretty good but….” I thought “Oh, here we go. Here we go, you know. My rates are too high. He’s gonna tell me that I really need to charge like $20 an hour or $18 or $25.”
[00:07:44] He surprised me. He said “But at $40 an hour, you will not be taken seriously in larger markets like Atlanta and Charlotte and DC. So if I were you, I would raise my rate to $75 an hour effective immediately.”
[00:08:09] I don’t know what I thought he was gonna say but I was gobsmacked and I’m really appreciative of the opportunity to use that word right now cause we do not use the word “gobsmacked” enough, anyway…
[00:08:21] I was shell-shocked. I was... totally spun around in my seat because again, I thought he was gonna try to negotiate me down. And I would have said yes to anything.
[00:08:36] And I think when you’re in a vulnerable moment and you know how vulnerable you are, you just really appreciate people who don’t take advantage of your vulnerability but instead take that opportunity to elevate you.
[00:08:54] I call that moment, that experience with Andrew “The Golden Suitcase” now because he, in effect, loaded a suitcase full of gold bullion and pushed it across the table to me. That’s how valuable the advice was.
[00:09:15] And here’s the lesson: Pricing is branding. When you are coming out of any type of job or any type of project where your work has been commoditized or devalued, well, you may have already gotten into the habit of devaluing your work yourself.
[00:09:36] And so you’re trying to compete based on price, not based on value. So what do you do? You try to give people a good deal. You think that what clients want is a good deal.
[00:09:49] You think that everybody’s primary motivation is saving money so if you want to get this project and you quote a price of $1,000 and then the client says “Well, that’s too much”, you say “Well, how about $750?”
[00:10:04] I mean, isn’t that what everyone does – you just come down on price when the client pushes back? Andrew helped me realize that there are other people who are value-focused, who think in terms of Rolex vs Timex.
[00:10:22] They’re not just thinking about how to save money, how to get a good deal. They’re thinking about value. They’re thinking about quality. And price is a signal to them.
[00:10:32] So if I were to charge $40 an hour in some of the larger markets in the Southeastern United States where I live, well, I’m sending out a very weak signal – and not an attractive signal – to people who want high-quality work, to people who want their freelancers or their subcontractors or their consultants to be confident.
[00:10:57] I’m sending out the wrong signal. I’m suggesting that I lack confidence or that I lack experience, that I lack expertise, that I lack talent.
[00:11:08] So here I was thinking that he was going to negotiate me down because he just wanted a good deal. And he looked at a fledgling copywriter and said “No, you’ve got the talent but your price needs to send a signal to match the level of talent that you have.”
[00:11:30] Pricing is branding. So that pricing is branding lesson is the golden suitcase because now, 13 years later, I look back and I think “How much money did Andrew Gordon make me that day when he taught me that if I want to have really strong positioning as a freelancer, I cannot afford low rates?”
[00:11:59] I can’t afford low rates because low rates send the wrong signal. They will attract the wrong type of client for me – a price-sensitive, rather than a value-focused client.
[00:12:15] Now, price-sensitive clients usually don’t have as much loyalty as value-focused clients. So if you think about each client being a building block, if I want to build a profitable business, I’m gonna find it easier to build a profitable, sustainable business with value-focused clients who'll like the quality and experience, and professionalism I deliver compared to price-sensitive clients who, if they find a lower price elsewhere, might say “Hey, sorry. It’s been nice knowing you but I can get it 20% cheaper down the road.”
[00:12:55] So pricing is branding. What signals are you sending with your prices? Are you positioning yourself as the capable, premium, talented, professional, thoughtful, brilliant option?
[00:13:19] Or are you blending in because you believe that competitive prices will help you grow your business?
[00:13:28] Juicy offers, strong positioning, value-focused clients… that’s how you grow your business. Not competitive pricing. So Andrew Gordon, if you happen to listen to this, man, thank you for the golden suitcase all those years ago. To the rest of you, raise your prices!
[00:14:00] Before you go, a quick reminder. Be sure to check out the Freelance Cake coaching program. The program is for committed, full-time freelancers and it’s designed to help you get better leverage in your business.
[00:14:14] We have group sessions, a private community, and on-demand trainings. And each week, you focus on implementing a specific lever such as your positioning cheat code, juicy offers, or morning marketing habit.
[00:14:29] The same or better income with more free time, fun, and creative challenges - that’s the point, right?
[00:14:37] So go to FreelanceCake.com/coaching. My friends, the best is yet to come. See you in the next episode!