Pricing Course Lesson 2 – The real reasons freelancers are underpaid

The real reasons freelancers are underpaid

Did you know that the worst thing you could say when meeting with a prospective client is that you’re a freelancer?

And that the second worst thing you could say would be to qualify freelancer with what it is you do (e.g., “I’m a freelance web designer”)?

Why is this?

It’s important to look at what those words mean from the perspective of a client. It’s fine to describe yourself to peers as a freelancer, and you probably want to tell others you’re a WordPress developer if you happen to be at a WordPress conference.

But titling yourself as a Freelance X can cause prospective clients to immediately have the wrong expectations of you.

What’s wrong with the word “freelancer”?

“…a person who works as a writer, designer, performer, or the like, selling work or services by the hour, day, job, etc., rather than working on a regular salary basis for one employer.”

That’s the dictionary definition for “freelancer”.

A freelancer is somebody who does work for somebody on a temporary basis and without the longterm attachments that come with employment. It’s this arrangement that drew most of us to freelancing to begin with — we wanted to keep doing what we’re good at, but without needing to work for The Man.

But when freelancing, there’s still an underlying association with employment. While legally the freelancer has no long-term loyalty to their clients, the working relationships are usually sort of similar: there’s the “greater” party (the client) and the “lesser” party (the freelancer).

By using the label “freelancer”, you’re stating that you’re like an employee. You expect to be brought a project with some requirements, and you’ll do them. The client is the boss, albeit temporarily, and you do the work.

My goal with this course is to help you become a high-value consultant. And while we’re not quite yet ready to talk about how to do just that (it’s going to take a few more lessons), you need to realize that it’s critical to shed the identify of “freelancer”… at least when talking with a potential client.

Because once you shed that identity and can become seen by your client as a partner and ally, instead of just “the freelancer we hired”, you’ll be able to charge a premium rate AND you and your clients will be happier. They’ll get better work from you; you’ll get more creative flexibility.

…But you gotta ditch the word “freelancer” first.

And what’s wrong with describing yourself as a “web designer” or whatever?

I’ve hosted a lot of events, especially over the last few months, and the attendees were all freelancers.

Whenever I’d poll the room and ask people what it is they did, I’d get back responses like:

And this is fine, because this is exactly what I was asking for — again, this was a peer (me, a fellow freelancer) asking the audience what they did.

However, most freelancers allow what it is they do to define their work. When talking with a potential client, they might say “I’m a freelance web designer”. For years, I pitched my agency as a “web shop”.

In tomorrow’s lesson we’ll be covering commoditization, and how to free yourself from being seen as a commodity provider (like a copywriter), but let me try to explain why defining yourself by what you do is a bad idea.

Imagine I meet you at a networking mixer, and you tell me that you’re a “freelance X” (replace X with whatever you do for your clients.)

Let’s then pretend that we get to the point where we’re talking about a project, and you quote me a higher-than-normal rate for the work you’re planning on doing.

I might respond with, “Hold on a second… I saw people on oDesk who can do X for $8 an hour. Why should I hire you?”

The underlying issue is that from the beginning, you defined yourself as a provider of X — and the implication, even though it’s probably far from the truth, is that X is X is X. It’s a commodity. A product. And you’re trying to sell that product for significantly more than some of your competitors.

It would be like driving down the highway, having your gas light turn on, and getting off at the nearest exit. You see two gas stations. One is selling gas at $3 a gallon, and the other is selling gas at $30 a gallon.

Which would you chose?

Unless you’re mad, you’ll buy the $3 a gallon gas. After all, it’s just gas. And while we might vehemently defend that not all X (web design, programming, writing, …) is equal, by defining ourselves as a “freelance X”, we’re implying that it is.

So chew on these ideas for the rest of the day. Think about how it is you present yourself to your clients. Are you pitching yourself as an employee-without-benefits who provides a commodity service? And if you are, how are you going to ever be able to break free of how the market prices your commodity service?

This is why most freelancers are underpaid. They’re caught in a race-to-the-bottom and they’re selling and pitching the same stuff as everyone else.

Today’s worksheet is short, but it’ll help you think about how your clients perceive you now:

Lesson 2 Worksheet: How do you present yourself to clients?

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