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How To Justify “More Than Market” Freelance Rates

Whenever I tell people about how I stopped caring about what other people were charging, and am now charging my clients 10x what I was charging just a few years ago, I’m almost always asked the same question:

“How do you find clients who will pay that?”

The right response really should be, “What are you doing differently now that lets you find clients who will pay you that?”, but that’s beside the point. The prevalence of this gut response from just about every fellow freelancer I’ve talked to signals that there’s still a lot of confusion around why we’re all hired in the first place. From the perspective of a technical project, like an app that needs to be designed or a sales letter that must be written, we tend to reason that there are “doers” — people who can complete the project — and these doers are graded on a scale bound to some mixture of experience and competency. And from this scale, a person’s “worth” (and ultimately, rate) is divined.

(This is the fourth part of a series I’m writing on becoming a high-value consultant. If you missed the earlier parts, click here)

Shouldn’t the best designer in the world charge more than his or her peers?

But let’s imagine that a company hires the best designer who ever existed. Despite any accolades — their natural ability to pair colors together, wireframe gorgeous workflows, or whatever it is designers are good at — there’s nothing implicit in being an expert designer that equates to being a great problem solver. If they design something beautiful, this is no way guarantees that the problem behind the project has been solved. To be honest, I’ve seen people who are total amateurs take a $8 ThemeForest template, tweak it with some really killer copy, and deliver something magnitudes more effective than the “properly designed” version that they were replacing (and lest you think I have something against designers, this pretty much applies across all disciplines).

Too many people, myself included for a very, very long time, naturally assume that if we’re hired it’s to apply our time and our expertise against a project (in my case, banging out lines of Ruby code). So we think that by having a great portfolio of work, memberships in this-and-that, or whatever else might mean that you’re, well, good at what you do, that this is how you’ll then get ahead. This is why I always roll my eyes whenever the discussion of portfolios or Github profiles comes up.

But here’s where I agree with most of you: Not being able to sell ourselves based on how good we are at our discipline sucks. It really sucks.

Getting to where we are today wasn’t a quick process; we weren’t born doing what we do best. It took a lot of work, and we’re proud of our accomplishments. And rightfully so.

How I justify my costs

But you don’t need to shelve your skills in the transition to becoming a high-value consultant. Instead, your skills amplify the solutions you’re capable of delivering. A better designer focused on solving problems will produce better results than an amateur who’s also focused on solving the right problems. The issue arises when we lose sight of why it is money is being exchanged, and fallback to thinking that it’s because of our skills or talents. It’s a bit like outfitting your bedroom with custom furniture made by an expert craftsman… who can’t, for the life of him, design and create functional dressers and chairs. Teach this craftsman what kind of furniture is most comfortable to sit in and best holds your clothes — and this will be a craftsman who is perpetually in high demand.

In the 2nd edition of Double Your Freelancing Rate, I dedicated the entire first section of the course book to identifying and quantifying the problem that ends up constraining and defining the solution we’re hired to create (if you haven’t read it yet, here it is for free). That’s 50-something pages, which nicely describes the exact process I use to anchor my costs against the potential upside — too much to replicate here. But when armed with this ability to get to the root of a project and ascertain why someone’s willing to part with their hard earned money to get some problem fixed, you’ll then have no issue in becoming that high-value consultant who, yes, charges a rate that’s substantially north of what’s typical for someone with your skillset but who, most importantly, delivers massive results because your work is anchored by the problem and its solution.

While you might ask me how I’m “able” to charge tens of thousands a week for my time, my clients don’t. And they don’t because my focus isn’t on me and what I’m doing, which is easily reduced to a simple price comparison based on skills. Rather the focus from the very beginning, as I covered last week, is solely on the problem, the solution, and what that solution means (preferably, financially) for the client. The relationship — that is, what I give my clients and what they give me — is a simple exchange of equal amounts of value. Clients are willing to pay tens of thousands of dollars to make hundreds of thousands in the long run. I’m only able to do this because I’m not selling code, I’m selling tomorrow.

What if you can’t easily quantify what this “tomorrow” looks like

It’s not always easy to discover what this tomorrow, when defined financially, might look like for a client. We all want the golden goose client who today has a business that looks like this, and if we could only apply our technical skills and problem solving abilities to that business, we can instead make it look like that which makes it a boatload of more money.

There isn’t always a this, like in the case of a new business or startup. Today isn’t really here yet, and you’ve been hired to help bring their business to life. And also, that isn’t always financial. For example, how do you justify a new website for a non-profit or a church, who might not always care about oodles of new profits (though the cynic in me likes to think that non-profits and churches still, primarily, would like lots of more money).

So how do you apply quantifying the financial upside of a project to a business where this isn’t defined, or that isn’t easily spelled out in dollars and cents? It all ultimately boils down to the same root motivation that “more profits” stems from. If a Fortune 500 hires you, in reality someone in a department — who might be far removed from the organization’s profit and loss statements — hired you. They might care about making their department look better in the context of the company, so pulling the profit angle probably wouldn’t be that effective. So sell to that need: making your client’s department look good at the next company all-hands meeting.

I was once hired by a major non-profit (you’d know of them) to develop an iPhone app. Like with many mobile apps built for major organizations, these apps played more of a supporting role in the organization. The goal with this app wasn’t to distribute millions of copies or lift donations. The goal, as inferred early on in the sales process by my team and I, was to make it so the celebrities that they’d push this app on to would show it to people at cocktail parties… which would then lift the reputation of the non-profit who owned the app. We spent a lot of time adding glitz and glimmer to the app, because we knew that’s ultimately what the client really wanted above all other things.

To recap, the aim of a high-value consultant is to stay focused — and be constrained by — the solution at hand, whatever that solution might look like for your client (financial, reputation, build-this-quick-and-get-acquired, etc.). And as long as the payoff outweighs the project budget, few clients will flinch, especially when they’re reasonably convinced that this solution can be realized. Take a second to read (or re-read, if you’ve already signed up for the course) the first section of Double Your Freelancing Rate to get a feel for how to systematically reduce a project to a problem, solution, and an upside.

Do this right — it will take a bit of practice to get comfortable shifting the way you work — and you’ll be in high demand AND will be able to charge a lot more than you’re charging now.

Next week we’ll be talking a bit about how your engagements change once you’re a high-value consultant. You’ll still do what you do best — but you’ll also be adding a few new deliverables to your typical engagement, which help you reinforce the value you’re providing.

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