The strategy of pricing freelance web work

The most common question I get from friends and fellow colleagues is “Am I charging enough? Am I charging too much?” Truth is, no one can tell you what your time is worth but yourself. You can, however, have a couple strategies when determining your rates.

Strategy 1: The Hammer

This anecdote adds to the point that It’s not about the time spent on a project, It’s about the value of the service rendered.

The manager of a manufacturing plant who, unable to solve a mechanical breakdown, sent for the retired engineer who had installed the machinery. Following a brief inspection, the engineer took a hammer and hit a pipe which did the trick. The next day the engineer submitted a bill for $1,000 to a horrified manager. Above the protests at the charge for a solitary hammer-blow the retired engineer explained, “Only $1.00 of it is for hitting the pipe. The other $999 is for knowing where to hit it.”

We can easily put this into web terms. Let’s say you have a client that needs a social/community portal with user profiles, user blogs, a forum, and a custom theme. Little does the client know, but I could hack their site together in a matter of minutes with Drupal, phpBB, and a couple plug’n'play modules. Now do I charge them a pro-rated amount based off my typical hourly wage or do I charge based off the value of the website I just built?

Strategy 2: Picasso in the Park

The moral of this story is that a service with higher price tag is not necessarily a scam. Consider this often quoted story about Picasso:

Legend has it that Pablo Picasso was sketching in the park when a bold woman approached him.

“It’s you — Picasso, the great artist! Oh, you must sketch my portrait! I insist.”

So Picasso agreed to sketch her. After studying her for a moment, he used a single pencil stroke to create her portrait. He handed the women his work of art.

“It’s perfect!” she gushed. “You managed to capture my essence with one stroke, in one moment. Thank you! How much do I owe you?”

“Five thousand dollars,” the artist replied.

“B-b-but, what?” the woman sputtered. “How could you want so much money for this picture? It only took you a second to draw it!”

To which Picasso responded, “Madame, it took me my entire life.”

That story gives me shivers every time I hear it it’s so true. What many clients and freelancers sometimes fail to realize is that sometimes an hourly rate just isn’t the most effective metric for invoicing. Expertise must come into consideration.

Convincing a client your worth that much

The beautiful thing about the internet is how easy it can be for anyone, and I mean anyone to publish themselves. Don’t let the ease at which you can publish to the internet mitigate the value of what you are doing for a client. If a client fails to see the value in what you are proposing, then it’s time to educate them!

Prove to the client that what you are proposing is an investment, and they will be less hesitant to hire you.

Websites have real value

Show the client how their website is an extension of their entire business: sales, marketing, customer service, and especially PR. A website is akin to digital plot of land with the potential for millions of users.

Give them the right perspective

Put your project rates in with the same context as other popular media vectors. How much would a client expect to pay for traditional media space? For a TV ad, a billboard, or a magazine space? Is a weeks worth of newspaper ads worth more than a website that can persist indefinitely?

Be the confidence man

Most clients have little or no experience working with freelancers and will often try to barter to a lower rate. In fact, no matter how low your rates are, clients will typically always try to challenge it. It’s important to remain confident in your pricing, not budging on your rate, but instead offering up the fact of “Oh really? I’ve found my prices to be quite competitive in this area.”

A surprised, yet confident, demeanor will calm a client and reassure that you’re worth your rate.

In conclusion..

The sooner you as a freelancer can determine the value of what you do versus the value of your time, the sooner you can begin confidently scaling your rates as you see fit. This is an important issue in web work, so keep an eye out for more posts on adding value to your work.