Five pricing strategies for freelancing services

Since you have landed on this post, chances are high that you are familiar with the following scenario. The client seemed quite interested in your service; asking questions, talking about deadlines, and looking in great need of your services. All the while creating an impression they will be willing to pay as much as you asked for. You offer a slightly above your average price, and Bam! They are gone. You keep waiting and regret if you are told an unreasonable price. Not necessarily. There are several things to consider before concluding. Here is how you can offer a reasonable price to each individual client and still balance it with your priorities.

Firstly, we need to understand how pricing freelancing services is different from pricing traditional services. For one thing, traditional services are a lot more standardized than freelancing services. Traditional service providers have a list of activities or jobs that they will perform as a part of service performance. Activities rarely deviate from the list. However, in freelancing every individual client will come with a unique need and a specified list of activities that they need you to perform. As a result, they will combine to make an overall task that you have never done before. So, you have to price for every individual client. Note that freelancing platforms attempt to standardize by creating packages/jobs that clients can directly order. But freelancers prefer the client would first contact them and then accept a custom offer made after discussion.

Second, while pricing the traditional services, service providers usually survey buyers to gauge their willingness to pay for a combination of activities called a service. Such methods do not work with freelancing platforms unless you have a great deal of experience with clients from several different countries. In simple words, you do not have much knowledge about your customers’ backgrounds.

Finally, you are not aware of the particular circumstance in which the client is contacting you. We know from our marketing knowledge that situational factors play a great role in shaping clients’ willingness to pay.
All these factors play their part to make pricing freelancing services complex and usually order losing for you. Fortunately, there are some subtle similarities between traditional services ad providing your services online as a freelancer. These similarities can provide a basis for pricing your freelancing services. Here are five strategies that help you in pricing your freelancing services.

1. Compare to the niche standard.

Assume you worked at a start-up in your neighborhood rather than working as a freelancer. You will look at the people who have similar qualifications and experience and are working in a similar industry. Then you will look at your own superior skills and put a premium on them. This way you will come up with a price tag for your services. You can research your industry to find out the average prices being charged for similar services. Be careful with this technique, however. The prices visible to you may differ significantly from what they charge individual clients.

2. Estimate your time and effort for the task

Your cost of freelancing is the opportunity cost of your time. While pricing your freelancing services, it may be helpful to estimate how much time you will have to spend on a particular task, and then put a dollar value on those hours. Include your time spent discussing with the same client, and the time spent researching before starting the task formally.

3. Keep a standard price in mind.

If you tell your clients a very high price, you run the risk of scaring away them by asking for an unreasonable price and then regret it. If you tell a standard average price to every client, you run the risk of charging a lower price to a client who was willing to pay more. To avoid this issue, you can have a standard price in your own currency in mind: for example, 2 INR for every word of content you write, or 800 INR for every hour you spend. Then if you find a client interested in your service so much so that they will pay higher, you can adjust your price when finalizing the terms with your client.

    4. Keep customer lifetime value in mind.

Many of your clients keep coming back for your service. Just like in the traditional services industry, loyal customers are rewarded, you need to adjust prices for such customers. if a client approaches you for a business plan for a beauty salon, for example, you can ask them what tasks they need you to perform. Do they need to do human resource planning, hiring, job analysis, and preparing job descriptions? Chances are they do. So, if you sense that will need such services you can offer to lower prices for the first order in exchange for placing new orders with you.

5. Negotiate

As already discussed every transaction with your client is a new process. You have to set prices for every client. You need to negotiate for the right price. Many buyers offer low prices to see just in case you may accept. Therefore, need to ask for a fair deal. If the client is stuck at a lower price than the cost of your time and consideration learn to let go of such clients. It is quite possible that another client will come over, willing to pay a lucrative price but demand results quickly. If you are busy doing the cheaper job and regretting why you accepted, you will lose.

Other considerations

In the above strategies, I have assumed you are an established freelancer. But if you are a beginner trying to build your presence online, your strategies might be slightly different. Especially, you may be less concerned about price and more about getting some reviews on your profile. Moreover, pricing freelancing services may depend upon the niche in which you are providing services. Although the fundamentals are the same, some niches may be flexible. For example, if your task is more laborious, you will have little room to be flexible with prices. On the other hand, if one additional photo retouching doesn’t take you long you might consider doing it for free to win the client’s satisfaction. Finally, to be able to charge premiums, you must satisfy your clients. Read strategies to satisfy your freelancing clients here.