
Never Negotiate Your Freelance Rate - jmduke
http://planscope.io/blog/never-negotiate-freelance-rate/
======
keithwarren
15 years on my own and after having this discussion with clients nearly every
single time we begin a relationship, I have learned to embrace rather than
fear the situation.

Often times this is a pattern, the person on the other end feels like they
need to get a win in some form and the easiest and most obvious to them is
always pricing.

Find out why they are asking this question, find out what they really want - 8
out of 10 times for me, it is just them asking because it would be dumb not to
ask. Explain your rates, be open and honest about them. If they feel like your
rates are too high for them then be willing to negotiate.

It is incredibly important that you negotiate, so many other people I talk to
simply balk and let their rates come down some. This is insanity, it is
surrender not negotiating. I always, always ask for something in return if I
am giving up something and do my best to make sure what I get in return is
more valuable than the money discount they are asking for. Often time I use
this as a segue with a customer to discuss retainer billing models. Most
people balk at it but if it is part of a give and take over the rate they will
embrace it. Give me the choice of a project with pre-paid hours at 150/hr vs
NET 30 at 165 and I am choosing the 150 all day long.

Another point, if you relax your rate - sunset the change. 'I am willing to do
this project at $150/hr but only for this project - future work we do together
will revert to the $165/hr rate'. Put it in writing.

~~~
chc
If the price is too high, you can bring it down without gutting your rate.
Just tell them what _can_ be done in their budget. (So instead of "Fine, I'll
come down to $75/hour," it's "Here's how much work each component is likely to
be. Cutting any of these sets will bring it into your budget range. We can
always revisit them later once the project starts earning back its cost.")

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theorique
I like Merlin Mann's take on this. Basically, charge a lot to paying
customers, and give a lot of content away for free so that those who can't
afford it can still benefit.

It's obviously a nice situation to be in.

 _For most all of my speaking, consulting, and advisory work, yes: I do charge
a fee, plus expenses. And, candidly, I charge kind of a lot.

Being compensated for my speaking, consulting, and professional writing work
is how I’m able to feed and clothe my family as well as fund my lavish, meth-
driven, West Coast lifestyle of fast cars, fancy English butlers, and the jet
packs that will not be available to normal people like you for years.

It’s also how I’m able to give away almost everything I’ve ever written or
said for free. Hundreds of thousands of words and dozens of days of audio and
video can only be treated that liberally if there are other ways that the
freight gets paid. I don’t apologize or defend this; I just realize it’s not
as obvious to everyone as it is to me.

As for how I decide what to charge and to whom or for what? It’s not
particularly complicated. I charge a lot to do things I’m great at for people
who know it’s a bargain. And, that’s it. Only way to fly. I don’t “dicker” and
I never “sell.”

I learned a long time ago to only work for or with people with whom you have
mutual admiration and respect—and who already think you’re valuable and great
at what you do. In my experience, the folks who expect you to make a case for
your own value make for terrible clients. They may be good negotiators and
nice people, but working for them is a gut-wrenching travesty. And I don’t do
travesties.

With all that said, I do a fair amount of (private, unpublicized, non-ribbon-
based) work with non-profits and other deserving groups. And, no, I normally
do not charge for this work. So, If you’re working for a good cause or
represent an organization that’s trying to do something you know I care a lot
about, please ask me. No promises, but I’ll do what I can with what I have.

So, yep. “Expensive” or “Free.” It’s a fee schedule that works._

[http://www.merlinmann.com/faqs/hiring-merlin/do-you-
charge-m...](http://www.merlinmann.com/faqs/hiring-merlin/do-you-charge-money-
to-do-things.html)

------
noir_lord
I like this.

One thing not mentioned that I've found over the years is that sometimes
asking for the higher rate from the start increases the clients _perceived_
value of you.

This was put succinctly by an old boss of mine "serious people charge serious
money".

He was full of these another that stuck with me is "Don't charge what you
think you are worth, charge what _they_ think you are worth", on one system I
built I went in with a price I thought was really high, got the job and then
found out afterward I was still significantly cheaper than the other company
that had bid on the contract though sometimes that is just the way it goes.

~~~
bdunn
I once lost a huge project simply because 1) I charged less than my
competition ("there must be something wrong with them...") and 2) I didn't add
a 20% annual maintenance fee my the proposal. Needless to say, I never made
that mistake again.

But yeah, I can't agree more.

The amazing thing about raising rates (which I think patio11 and I talked
about way back when here: [http://www.kalzumeus.com/2012/10/10/kalzumeus-
podcast-3-grow...](http://www.kalzumeus.com/2012/10/10/kalzumeus-
podcast-3-growing-consulting-practices-with-brennan-dunn/)) is that you make
more money, get better clients, and get treated with a lot more respect.

~~~
logicallee
Believe you, but how on Earth did you find this out? (For your anecdote, that
those were the two specific reasons you lost the project.)

~~~
bdunn
One of the guys who worked with me was an ex-employee of the university we
were submitting the proposal to. It's always... fun when procurement divisions
are involved. :-)

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chasing
I'm not sure that "never" is a good word to use, here. There are many cases I
can think of where it'd be worth your while to negotiate your freelance rate:

\- The client is a non-profit or under-funded project that has little money
but you can help out because you support the good they're trying to do in the
world.

\- The client is offering you a _huge_ chunk of work, and the overhead they're
removing from your life (finding other clients to fill the time, for example)
is worth a few bucks off of your hourly rate.

\- The client can offer other incentives to offset the hourly discount. Like a
client that wants you to work from the office all the time might be willing to
let you work from home.

\- It's a project you really want to work on and that's the only way to make
it work.

"Clients obsessed with nickel and diming are pathological." This is nonsense.
Clients -- just like you -- have every right to negotiate. But freelancers who
are unwilling to be flexible when dealing with their clients are, to quote
South Park, "going to have a bad time."

~~~
danenania
On your first and last points, my general rule is that I either work for my
full rate or for free. I find it much simpler and less stressful to make a
clean divide between things I'm doing because I believe in them, and things
I'm doing because I want to make a comfortable living and advance my business.

In the middle territory, no one wins. You'll have expectations placed on you
because you're being paid something, but it won't be enough for you to put in
a professional level of focus.

When you do these kinds of projects for free instead, you get a lot of
goodwill in return and you aren't burdened by unrealistic expectations that
can add stress and interfere with your bottom line. It also forces you to
decide if it's _really_ something you believe in, or just a sub-par
arrangement that you're getting pressured into.

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fizx
Or, you can do what everyone else does. Set your rates 20% higher and give
anyone who asks a 20% discount. Or set your rates 10% higher, and give a 20%
discount for something that is valuable to you, but not necessarily valuable
to the client (e.g. prepayment).

~~~
kevingadd
For a recent project I gave them a small discount off my hourly rate in
exchange for an agreement that we'd open-source a part of the software I
developed for them. Works out great for all involved parties - they save money
and look good, I can leverage my work for future projects (either as a
portfolio piece or to solve future problems)

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joshfraser
People like to feel like they got a deal. They want to be able to go back to
their boss and tell how they talked you down from $250/hr to $200/hr. Why not
pad your pricing to begin with and let them feel like they won? This is
particularly important for dealing with people for big corporations where
buyers are evaluated on their ability to squeeze vendors. In the end, you'll
still get the price you need but you can leave them with that warm fuzzy
feeling that you gave them special treatment because you value their business
so much.

~~~
judk
This practice turns off honest customers who just want good work at a good
rate. Those customers will just not call you, or go to a competitor who has
lower no-bullshit face pricing

~~~
joshfraser
Not always. It comes down to knowing your audience. I'm guessing you've never
negotiated with a buyer from a fortune 500 company.

~~~
derefr
How would you feel if, upon asking for a discount (say, 10% off a $100k
contract), I offer to instead _raise the base rate_ just for your contract, so
it costs the same in the end, but you can _also_ say you got a discount?

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vishaldpatel
There is nothing wrong with offering a discount. Make sure there are good
reasons for offering the discount and make sure that the discount is a line-
item on the invoice.

For example, if a client is willing to commit to hiring you (by paying up-
front) for a certain larger-than-normal period of time, you may be shooting
yourself in the foot by not offering them a small discount to sweeten the
deal.

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chrisbennet
If they ask for a discount, let them know that you offer one - for work done
on retainer (payment up front).

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DodgyEggplant
An extremely useful rule is to give the discount, but hedge your risk with a
limit on the hours for "undefined time". Agree on X hours for meetings, more
meetings, presentations, discussions, whatever, and stick to it. This will
force the client to use your time wisely, and pay you more if substantial more
time is required.

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gedrap
There is a good point in the post that no one seems to mention. Negotiate on
the scope. Please, for your own good, do that.

It sucks so badly when you a finish a project for a nice amount of money, the
client says 'oh I have this project... can you take a look? I just need a
quick fix', and you believe that a quick fix is a quick fix but in reality,
it's piece of crap that you are not sure how does it even work. Why it sucks?
Because I feel bad to tell the client to go away after he spent $XXXX on me.

And I wish I knew about the retainer contracts when I started... Random hours
for maintenance for old projects sometimes can kill you.

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raverbashing
Or just quote an inflated price (and don't make it public)

Does it turn away honest customers?

Sure, you want to quote the fair price to the honest customers and a higher
price to those who haggle. The trick is finding out which is which.

Now, for companies, always, always quote the inflated price. And for some,
there's the possibility of going 100% above. I'm not kidding.

A negotiation, even a small one, demonstrate that the parts tried to converge
to a fair price. It's one thing to buy something with a price tag from a
faceless corporation, another to negotiate something.

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tryp
xss sp

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sparkzilla
Meanwhile, in the real world...

