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