What is your first thought when a spouse, friend, or someone else close to you suggests going on vacation? Is it, ?Yes! Let?s do it!? Or is it more like, ?Ehhhh? How much will this cost me??
In a recent survey, freelancers were asked to fill in the blank: ?Compared to a job with a traditional employer, freelancing makes me feel??. The resulting word cloud makes it seem as though the majority of freelancers are overwhelmingly happy with their choice to go into business for themselves:
And I don?t want to argue that. As a freelancer myself, I very much appreciate the freedom I have to do the kind of work I love, to do it when I want, and to make as much money as I can within the schedule I?ve created for myself. That said, the money thing does weigh heavily on me sometimes?and I?m not the only one who feels that way.
In this guide to increasing freelance rates, we?ll discuss the current state of freelancing, why freelancer?s wages always seem to be a concern, and what you can do about it.
The Current State of Freelancing and Freelancer?s Rates
According to Payoneer?s Freelancer Income Survey of 2018, 68% of respondents said that making more money was the primary improvement they wanted for their business. And it?s not surprising to see why that is.
That same survey found that the average hourly rate for freelancers worldwide is $19:
Of course, this isn?t the case for every freelancer. A 2017 Freelancing in America report showed that 36% of U.S.-based freelancers make over $75,000 a year.
Even so, money is a concern that comes up time and time again for the majority of freelancers.
63% of full-time freelancers need to pull funds out of their savings every month in order to cover the cost of living, as opposed to only 20% of full-time employees who do the same. Part of this may be due to the fact that they haven?t yet accumulated enough clients to rightly cover their costs. 26% of freelancers assert that this is the case:
But that leaves 41% who say they have the perfect amount of work and 33% who say they have too much work. If 74% of freelancers are at capacity, then what?s the problem?
Well, freelancers have financial concerns that their traditionally-employeed counterparts don?t have to worry about:
- Estimating and paying their own taxes throughout the year.
- Providing their own health insurance coverage (in the U.S.)
- Saving for retirement.
- Paying off debt (which can be especially hard when launching a new business).
- Unpredictable peaks and valleys in their revenue stream.
The thing is, though, these concerns don?t necessarily have to be concerns? if freelancers charge the right amount. There?s absolutely no need for freelancers to overextend themselves in order to make a living wage. What it boils down to is understanding the value you provide as a WordPress professional and then charging your clients accordingly.
10 Things to Do So You Can Start Increasing Freelance Rates
Look, I totally get it. When you?re new to WordPress freelancing, you?re grateful to have anyone willing to sign on with you. It?s hard getting that first big break. Then you have to figure out how to leverage it to get more. That?s why, sometimes, we start by offering a measly rate just so that anyone would be willing to do business with us.
But you?re not going to do yourself any favors if you hold onto that low rate beyond your first client or two?especially if you get referrals from them. ?Oh yeah, my WordPress developer is great! And he/she only charges $1,000 for a website!? Nope. Don?t even give your clients a chance to start spreading the word about your low rates. Establish a reputation for how good of a developer you are; not for what a good bargain you are.
Let?s talk about what you can do to start increasing freelance rates and charge what you?re worth.
1. Be a Kickass WordPress Developer
I realize I?m encouraging all of you to increase your freelance rates. However, this only applies to those of you who offer a fantastic service and solution. If your heart isn?t in this and you aren?t proud enough to show off every project you?ve completed, then now is not the right time for you to try to adjust your freelance rates or negotiate higher ones with clients. You need to create something truly valuable that your clients can justify investing in.
As such, I?d recommend that you:
- Always do the very best job that you can.
- If a client is unhappy or concerned (within reason), find out what you can do to remedy the situation.
- Meet every deadline.
- Maintain positive communications with clients, even if they test your patience from time to time.
- Look for new ways to be more productive and efficient. Automation will not only boost profit margins, but it?ll improve the quality and consistency of your work.
- If you keep your head down to code all day, you might lose sight of the fact that you?re running a business, so don?t forget to build relationships and partnerships.
2. Educate Yourself
If you want to justify increasing freelance rates this year, you need to prove your worth. This doesn?t necessarily mean going back to school to get a degree in programming. It just means finding ways to educate yourself and then demonstrating what you?ve learned through your work samples.
There are so many resources you can use to educate yourself on everything you need to become a better WordPress developer. Subscribe to them, adapt your workflows accordingly, and use those skills as leverage for better rates.
3. Develop Your Specialty
One thing I?ve learned in my work as a freelancer is that it?s really difficult to be a Jack/Jill of all trades, master of none. There?s first the issue of feeling like I had to re-?learn? subjects every time I jumped from writing about one topic to another. It cost me a lot of time to make those transitions every day.
Then there?s the matter of reputation. When people asked me what I wrote about when I first started freelancing, I would say, ?Well, sometimes I write about WordPress plugins. I do the occasional product review, too. Oh yeah! I just wrote a white paper for this restaurant software company!? When friends and family would tell others that they didn?t really understand what I did, I realized there was something wrong in my approach to freelancing.
When you try to do too many things, it can compromise your reputation as an expert?and an expert is what clients are willing to pay those high rates for.
While it?s good to diversify your client base in the sense that no one client makes up the majority of your income, it?s bad to diversify your specialty too much. Pick an industry. Pick a type of website. Pick a style of web design. Just figure out what you?re best at and commit to it.
4. Spy on the Competition?s Rates
If you don?t have any idea what your competition charges for services comparable to yours, stop right now and have a look at their website. This should include both freelance WordPress developers as well as agencies. If you?re offering the same service and quality of work, you shouldn?t be charging less than they do. Their rates are the lowest you should be willing to go.
5. Ignore Your Cost of Living
Just to be clear: I recognize that freelancers need to be able to pay the bills. However, when you?re working on increasing freelance rates, I want you to take the cost of living out of it.
Focus first on determining what you believe your services to be worth. Once you?ve determined what you believe you should charge?based on the value you?re providing clients (i.e. how much money can they potentially make from their investment in your services)?then you can look at your finances. If you?re left with a huge profit, that?s fantastic! If you?re left with barely any profit, go back through the previous steps as you likely missed something.
6. Publish Freelance Rates to Your Site
Maddy Osman suggest that freelancers could use pricing pages to help increase their rates.
At first, I wasn?t so sure if that was the best idea considering how much pushback clients give freelancers about pricing. But then I realized that?s the whole point of this. Freelancers need to get paid what they?re worth. By publishing prices to your WordPress sites, you can set the right precedent and encourage the right kind of clients to work with you.
I would also suggest creating an official pricing sheet that accounts for everything you offer, including:
- Per-project rates
- Industry-specific rates
- Hourly maintenance or update work
- Upsell or cross-sell services
- Rush fees
- Rates for other services
- And so on
This way, there are no surprises as you enter into discussions with a prospect.
7. Develop Pricing Tiers
Recently, I was gathering research for a post about conversion rate optimization. I found that, on more than one occasion, visitors opted to pay more when services and products were laid out in a pricing tier structure.
The side-by-side comparison that showed how much more valuable certain packages were, as well as the strategically designed tiers that gave prominence to more ?popular? packages, helped convince visitors to spend more. Pretty interesting, right?
So, when you?re pricing your WordPress services and publishing them to your site, do so in a way that encourages clients to pay more.
8. Raise Current Clients? Rates, Too
Increasing freelance rates doesn?t just mean that new clients have to pay more. Your current clients need to start paying more, too. If you truly want to provide a valuable service, then you need to be paid what you?re worth by everyone.
Increasing rates with current clients can be tricky though, so here is what I would suggest:
- Give all current clients advanced notice about the change in rate. At least three months.
- Make sure to publish the new rates to your site, so they don?t think this is some random decision to make more money off of them.
- For clients you really enjoy working with, offer a discounted rate if they pay upfront for a year?s worth of services or sign a long-term contract. The recurring revenue will make the discount worth it.
- For clients who balk at the increased rate and are unwilling to pay it, don?t be afraid to let them go. You don?t need to work with people who don?t value what you do.
9. Update Your Contract
While a WordPress freelance contract is typically in place to provide certain protections for you and your client, you can also use this to establish rules about pricing.
To start, if you have a contract template, make sure it?s updated with your new freelance rates.
Secondly, for recurring services contracts, build in a clause that dictates automatic rate increases every year. This way, you won?t have to enter into possibly awkward discussions with clients about raising rates at year?s end. You can establish this upfront with a clause that states a 2% rate increase every year (or whatever you want it to be).
10. Be Consistent with Pricing
Clients talk. In fact, you want them to talk. If they didn?t, how else would you get so many high-quality referrals?
That said, imagine what would happen if one of your clients recommends another company to you, but under the guise that you offer really cheap web development services with a huge return on their investment? You could potentially hurt your chances at landing that new client if you?re unwilling to give them the lower rate. You could also compromise the relationship you have with the current client if you rub their friend or partner the wrong way.
To keep everyone happy, and to maintain a predictable revenue stream, don?t budge on pricing.
Increasing freelance rates is kind of scary, isn?t it? It means that your business is entering a new phase and that you?re growing as a WordPress developer. But this is a good kind of scary! You?re at a point now where you don?t want to be undervalued and you feel confident enough to dictate a rate that you deserve.
Just remember that you need to 100% believe in this. If you don?t, clients are like sharks. If they smell blood in the water, they?ll have no problem trying to cut you down and secure a lower rate.