Monday, April 04, 2005

Cut Your Fees to INCREASE Your Income

Cutting fees is an almost taboo topic when it comes to freelancing. BUT, there are times when it behooves you to do so – allowing you to increase your client roster in the long-term. Following are some guidelines I used when I was freelancing that almost always paid off over the long haul:

1) First-time clients: Here, I didn’t consider it cutting fees as much as hooking clients with a discount (I usually did 10-15% off the total price of the job).

How did you know if clients will be repeat customers, instead of one-time users? After a while, I developed a few questions that somewhat pre-qualified customers, eg: how often do you need this type of work done, do you have an in-house staff for your editorial needs, have you ever worked with a freelancer before, etc.

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2) Large jobs: If a job is large (and only you can determine what “large” means for your company), then I’d often offer a discount because having a huge chunk of money at one time is always a good thing when you are freelancing.

3) Repeat Customers: I call this the punch-a-card method. Meaning that if I did a certain number of jobs for a client (say 3), then they got a discount on the fourth job. This is a nice way to say thank you to clients for their repeat business. As it is a method that’s not widely used, this was always a real winner with my clients.

4) Nothing Else Going On: We all go through dry spells as freelancers – it goes with the territory. If an opportunity presented itself that was below my normal rate, if I had nothing else going on and could knock it out in a reasonable amount of time, I would take the project on.

I stayed away from projects that didn’t pay what I thought approached an industry standard – I believe that lowers the bar for all. But, for example, I charged $35/hour for copyediting/proofreading. If a proofreading job came up that paid $25/hour, I would accept that because I knew that that was a reasonable rate by industry standards.

Caution: When cutting fees, be careful as to how much. You don’t want customers to get used to paying so little that when you charge them your regular rate they are shocked.

Also, make sure clients know that this is a courtesy you extend to either thank them for patronizing your business, or an introductory rate so that they can feel confident in your skills.

Remember: Your goal is to keep the checks flowing, and that means not cutting off your nose to spite your face. Happy prospecting!
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