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Smart prices pay you the best value

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Simple can be too simple: Charge what you are worth and add tax. Sure, but do you know your worth? Freelancers do not work for free unless they prefer to have an expensive hobby.

Jean Wandimi, for one, does not work for free and is known for her boldness. The digital marketing strategist helps content creators and freelancers use the internet creatively, effectively and profitably.

She creates content on YouTube and publishes wine and food reviews on her website, as she explained during an Africa Tweet Chat.

A pricing conversation is really about how you will get the most value from the product or service you decide to sell. Working pro bono sounds good to get your foot in the door, but when people get something for nothing, they’ll be reluctant to finally have to pay for it. 

How to know your price is right

“It is not 100 percent bad to work for free in some instances,” Wandimi said, if these factors apply:

  • When you do not have any accolades and decide to work to build your name in the industry such as writing and illustration
  • If you will get worthwhile recognition
  • If there is another form of mutual benefit
  • When building your authority

“Most start by creating content for free initially,” Wandimi said. “If you are trying to build your name in the industry through the content you create, you may not get paid immediately. However, through time you start working on paid projects.

“Would you work for free to get your name out there if it was a field you were completely new in?” she said. “Rather than work for nothing, learn quickly and know when to scale.”

Know all sides 

Her advice is that before working for free, weigh the pros and cons. 

You have to know your price of doing business. What is the minimum? What do you need to add to live on? 

“Calculate your pricing beforehand,” Wandimi said. “Expect the ‘Why are you charging this much?’ question.”

She recommended that creators support their price by showing the following:

  • Data, including engagement, audience size, conversions, etc. 
  • Your audience and reach
  • Your past work

“I love to support some of my work with data,” Wandimi said. “Share numbers, data, past work, reach and so on.”

Media kit showing Twitter stats

Wandimi dove into a host of possible pricing models creatives could use to arrive at a base rate.

Competitor Pricing

  • Look at other people in your niche and what they charge.
  • If you are an online freelancer, look at what other people charge on their profiles.
  • You might have to swallow your pride and ask directly.

Cost-Plus Pricing

  • Add your costs for producing that content to your fee. Add both the fixed and variable costs.
  • Fixed cost: Doesn’t change. It’s your value, expertise and time.
  • Variable cost: Depends on the gig, including costs of gear, internet transport and photography.

Graphic showing fixed-cost formula

The Recipe Model

Person X makes these charges:

  • Blogging $30,000 monthly
  • Photography $30,000 monthly
  • Social Media $40,000 monthly

If a client wants A and B? Charge $60,000 with a small discount.

Chart showing recipe for pricing

The Perception of Price

“People assume that the higher-priced items are more quality,” Wandimi said. “For example, people buy handbags for $1,000 KSH, and one seller sets the price at $3,000 KSH and another $7,000 KSH. We assume the $7,000 KSH bag is quality. Have that in mind when pricing.”

Graphic shows how price is perceived

Target Market

“Who is your target market?” Wandimi said. “Luxury markets’ charges are more expensive, while someone targeting lower and middle class will charge less. Know who you are targeting and set the price accordingly.”

Bubble asks,"What is your market?"

High Prices or High Volumes

“Do you want to move more volume — low prices — or less volume — high prices?” Wandimi said. “I may aim to sell 100 consultations, so I have to lower the price. Or I may aim to sell three premium consultations, so I raise the price.”

Posing question: High prices or high volumes

Bonus Tip: Adjust as you go — and grow

“I am sure you have seen those Instagram shops that tell you ‘DM for price’ so that they adjust,” Wandimi said. “When pricing a service, you cannot charge a multinational customer the same price as a small enterprise.”

Bonus tip: Adjust prices as you wish

“There is no concrete formula on what you need to charge,” Wandimi said. “You need to have these facts in mind before you set a price. Charge what you are worth and add tax. Do your research to ensure you are not over or undercharging.”

Be familiar with the market price for your service or product. Then see if you can deliver it more efficiently to give yourself a price advantage over the competition. 

Wandimi offered these tips to ensure you are not asking for too little:

  • Do thorough research.
  • Research the company or client beforehand. What do they do? How big are they?
  • Lay down all deliverables beforehand.
  • Do your own calculations of your value. That way, if someone is paid $3 but you are confident that your value is $2, you will not feel bad for asking that.
  • Charge what you are worth and add tax. That way if they negotiate down, you are still on.

Really that high?

The “You’re too expensive” objection always lurks nearby.

“By now you have researched if your price is higher than your competitors or if your value is commensurate to the price you are charging,” Wandimi said. “A good question to ask if the client is open, ‘Let’s say money wasn’t an issue, would you engage me?’ Sometimes people throw the ‘You are too expensive’ phrase because they have already decided not to work with you.

“Demonstrate that value,” she said. “Be sure that you are able to back up your price. Why are you charging $200,000 KSH per Instagram post? How much are you charging when compared to others? What is your value? Is it because of your targeted market? Reach? Conversions? Authority?”

Objection that you are too expensive

Be careful not to mistake negotiation for browsing.

“Sometimes, someone was just shopping for prices and wasn’t fixed on working with you,” Wandimi said. “They give objections like, ‘You are expensive.’

“An objection is not a No.” she said. “It’s a ‘Convince me. Clarify.’ They may have questions or doubts.”

Wandimi noted key factors that impact the price brands pay for content:

  • The budget of the brand
  • The deliverables.
  • Type of content expected
  • Duration of campaign
  • Market rate of creatives

She gave several reasons why is it important to know what other creatives are being paid:

  • It helps you in setting your prices and in your internal cost calculation.
  • It helps people not feel cheated if you learn that you were paid less for the same job.
  • It helps you confidently approach brands, too.

Market awareness 

“People can argue for a better price when they know how much they are being paid collectively,” Wandimi said. “Do creatives in your country have an organization or association?

“Essentially, if creatives were more open about how much they were paid, brands would know the standard market rate and would never offer to pay people peanuts with exposure,” she said. 

Wandimi tallied the most important things to include in content pricing and media kits:

  • The what: The deliverables. I will do X, Y and Z for you.
  • The when: The duration. How long do posts stay up? Payment dates.
  • The how: What type of content?
  • The where: Which platforms?

“Remember to include the payment terms and channels,” Wandimi said. “Is payment before, after, between? What about bank or Paypal? Is it commission or fixed?”

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Jim Katzaman
Jim Katzaman is a manager at Largo Financial Services. A writer by trade, he graduated from Lebanon Valley College, Pennsylvania, with a Bachelor of Arts in English. He enlisted in the Air Force and served for 25 years in public affairs – better known in the civilian world as public relations. He also earned an Associate’s Degree in Applied Science in Public Affairs. Since retiring, he has been a consultant and in the federal General Service as a public affairs specialist. He also acquired life and health insurance licenses, which resulted in his present affiliation with Largo Financial Services. In addition to expertise in financial affairs, he gathers the majority of his story content from Twitter chats. This has led him to publish about a wide range of topics such as social media, marketing, sexual harassment, workplace trends, productivity and financial management. Medium has named him a top writer in social media.

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