When prospects push for hourly rates

“What/How do I charge?”

I bet no other topic generates more questions or discussions in freelance writing circles.

Some time ago, I wrote about 7 freelance writing rate models and, later, how to switch from hourly to value pricing. In those posts, I argued against hourly rates, which tend to shortchange service providers. (I’ll tell you why in just a moment.)

But what do you do when a prospect pushes for hourly pricing?

Or, worse: a detailed report of how you spend your time?

I found myself in that boat after a client company was sold. All my contacts in that company changed, and the new leadership insisted I switch from a flat-fee retainer to an hourly rate, complete with monthly time reports.

To make his case, my new contact (let’s call him Max) argued the company needed to do a better job tying ROI to their investment, and for that reason they’d only pay for hours worked.

No can do.

Now, this being a very profitable client, I considered his terms for a second. Then I remembered I started my own business so I could work on my own terms — however, whenever, and with whomever I choose. Also, I don’t enjoy having my work devalued, or being treated like a lowly employee.

So I respectfully declined and shot back this reply:

Hi, Max,

Totally understand your perspective. You absolutely have to tie ROI to your investments — and that is one reason why I don’t charge by the hour.

In reality, time spent on a project is a very poor measure of the ROI any content piece delivers to your business.

When you see a doctor, for example, you don’t pay for the 15 minutes you spent with the doctor. What you pay for is the diagnosis, plan of treatment, and what that will do for your quality of life.

Similarly, skilled content writers won’t bill you for their time, but for the ability to attract, convert, and retain buyers through compelling content.

Other reasons why I don’t charge by the hour: The more skilled and knowledgeable I become about your brand, goals, and audience, the better and faster content I can deliver. An hourly rate penalizes me for getting better and faster. On the flip side, an hourly rate penalizes you if I have a bad week and it takes me twice as long to grasp and nail assignments. Neither scenario reflects the ROI of what that content will do for you.

If you’d like me to quote specific monthly deliverables, I’d love the opportunity to do that. If a flat-fee, value-based arrangement won’t work for you, I understand and won’t be offended if you want to explore other options.

I know I’ve given you a lot to chew on. What questions can I answer to help you decide on next steps?

Thanks again, Max. I very much appreciate the vote of confidence, and want to help you find the best solution for you, whether or not I’m part of it.

Andrea

Side notes

Let me point out a couple of things here, which I’ve observed again and again when communicating my boundaries (whether it’s a service term, pricing, or a deadline I can’t meet):

  • Confidence is super attractive. When you value yourself, others tend to value you, too. The opposite is also true. (Experienced freelancers will testify to this.)
  • Having defined boundaries makes you look like a pro: someone who knows their stuff, is in high demand, and isn’t afraid to turn away work that isn’t a good fit.

Now, please hear me on this: It’s totally fine to be flexible and compromise now and then. It’s your business, your rules, after all. The bigger message here is you don’t have to devalue or sacrifice terms that are important to you in order to be profitable.

(By the way, I would’ve preferred to deliver the message above via phone or in person since this was an existing client, but went with email since Max was pressed for time and we couldn’t coordinate schedules.)

What happened

Max graciously thanked me for my explanation and asked me to submit a new proposal, per my terms, to match his new company objectives. He may still say “no” in the coming days, and I’m ok with that.

Not everyone has to be a good match for you or your business. There’s a hungry market out there, and your time is better spent searching for great-fit clients than serving poor ones.

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