When freelancers know they’re competing with others for work, there may be a tendency to provide a lowball quote to secure it, but freelancers need to keep in mind the old saying “you get what you pay for.” Clients certainly are.
Although it may seem like a good idea to offer a very low quote, unless the client is the type who looks for the lowest bid, a quote that is too low might be as bad as pricing too high. In fact, it might be worse. A lowball quote suggests inexperience, lower value and desperation (or a combination of the three).
Stick to your rates
Freelancers set their rates for specific reasons (see How to determine your hourly rate: Yearly salary method for one way of determining your hourly rate), and it represents the value they have placed on their work. If the rates are priced accordingly, it’s also a good representation of the value clients place on the freelancer’s time and skills. After all, they’re paying those rates, aren’t they? (If they’re not, you might want to readjust your pricing, but that’s a topic for another time.)
Rates take into account costs, time and profit margin, and for the most part, freelancers should provide quotes based on those rates. Although it’s okay to offer discounts (a lot of freelancers offer “small business” discounts of 10 to 15 percent), those discounts should be reasonable and still reflect their standard rates.
Don’t under-value yourself
Trying to under-cut other freelancers to win work sounds like a good idea, but after awhile, freelancers are likely to find they are making a lot less money than they would be if only they were charging more.
Not only are such freelancers under-valuing themselves, but they’re creating an environment where clients will begin to under-value them, as well. One story I recently heard is about a freelancer who actually saw his amount of work increase once he raised his rates.
Think of it this way: When you’re buying a pair of shoes, do you expect the $10 pair to provide the same comfort and quality as the $100 pair? Now look at the number of people who spend $100 on shoes.
Pricing sets expectations
As Freelance Switch points out, a price sets certain client expectations, and it’s fair to say most (if not all) clients would prefer high-quality work. Although some clients are not in the loop regarding standard prices, everyone is skeptical if a deal seems too good to be true. The last thing freelancers want is clients who are concerned about their ability to provide good work, but a price that is too low might make a client wonder.
Most clients expect to pay for quality work, and as this article from WorkAtHomeIndex.net points out, the lowest quote is not necessarily the best quote for the job. Sure, clients want to keep their own costs down, but they also don’t want to hire an amateur to do professional work – and a lowball quote reeks of amateur hour.
Affecting the market
Another consideration in pricing too low, especially if the price is well below industry standards, is that freelancers aren’t just devaluing themselves; they’re also devaluing the work in general. Check out the freelance jobs sections of your local Craiglist, and note the number of angry posts made in response to businesses (or individuals) ask talented professionals to work at incredibly low rates.
Average freelance rates have gone down because of online sites seeking high-volume, low-cost content, but professionals don’t have to play that game. Let the amateurs take the low-paying jobs. Settling for lower rates will help to contribute to the overall under-valuing of the work all freelancers do. Freelance work shouldn’t be seen as a commodity — not if you want to make a living doing what you love, anyway.
There will always be people who buy cheap work, but the average freelancer’s goal is likely to be able to make a living and, in time, raise rates to adjust to their growing skills and abilities.
Turning down work is okay
One freelancer told me that turning down work feels like the old euchre saying of “turn down a bower, lose for an hour,” but that’s just common fear talking. Although you may want to try as hard as you can to win a project, there’s nothing wrong with turning down work if you don’t feel comfortable or can’t meet the client’s budgetary needs.
There will be more work right around the corner. Trust me on that.