The truth about hourly rates

The truth about hourly rates is that they don't matter. What matters is how effectively you solve a client's problem.

When it comes to freelancer pricing I tend to remain largely passive. In my opinion you either take pride in your work, or you don’t. You either understand your work has value, or you don’t.

The simple fact is, if you take pride in everything you do and believe that you truly are an asset to your clients you will never have a problem pitching a fair price, as you already instinctively understand the value of what you provide.

Not as clear cut

However; of late I’ve fielded too many questions from awesome freelancers who are struggling with pricing, this tells me it isn’t as clear cut as I’d previously thought. As it turns out I was wrong, it is quite possible to be great at what you do while consistently being undervalued and underpaid.

The truth is, when it comes to pricing it is YOU who controls the perceived value of what you do. When this perceived value impacts your pricing structure it is YOU therefore who controls whether this year will be another ‘just okay’ year for you.

So I felt I had a duty to do something, pricing isn’t all that complex you know.

Value provision not service provision

“Price is what you pay, value is what you get”
Warren Buffet

If the wealthiest man in the world talks pricing strategies, you listen.

Consider every other purchase you make in life. Those kicks you have an eye on; do you care whether they took 10 hours to manufacture or 100? Of course not. Do you care if they make you feel better, walk taller, stand out? Of course.

Are you buying on price alone? Nope.

So why doesn’t this rationale extend to service-led businesses? Why does the downtrodden freelancer get the short straw, hooked into a cost-plus model which lauds the importance of time-spent instead of mutual value provisioned.

I needed to put together a guide

I figured I’d put together a post on the topic. This post morphed into a two-part series, which grew into a full ebook which I’m happy to give you, for free – so I can help ‘doing okay’ freelancers make the most of value-led pricing too.

So although it’s only a concise one it’s a solid walkthrough of a value-led pricing approach for freelancers.

In it, I’ve attempted to reposition your mindset on pricing and laid out a ten section pitch structure that will leave your prospects in a state of shockcitement (literally just made that word up don’t read too much into it).

The link is below – it’s free and will put you on the path to stacking the odds in your favour, not that of your clients.

Download this free book ‘Hourly Rates Don’t Matter’ Here

Learn anything? Please share

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  • Gail Gardner

    I suspect the reason hourly rates exist is that clients want to know they are getting their money’s worth. What they should really want is a flat rate. The challenge freelancers have is knowing how long something will actually take versus how long they THOUGHT it would take. Always build in a cushion and be prepared to give away some time doing new types of projects while you’re developing the process. Once you have a process documented you will have a much better idea how long it really will take and can price accordingly.

    When you’re busy is the time to ease your existing clients into higher rates. Don’t feel you have to charge the same rates you always did (although for a really great client you may choose to do so). The cost of living goes up, the cost of solutions we use goes up; sometimes our rates have to be increased.

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