Episode 18

Pricing: How freelancers set rates

October 23rd, 2018

48 mins 27 secs

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About this Episode

Rob and Sara discuss how they set their prices, the benefits of subscription models, setting an hourly rate starting off, and how to know when to increase rates. Rob has a provision in his contract where if someone cancels early, they are still on the hook for a certain percentage through the end of the Agreement term. That gives him money he can plan with and rely upon. Defaulting to billing by the hour is common because it is one of the easiest ways to move forward, however it often causes people to leave money on the table. Rob recommends value-based pricing based on a consideration of what the solution he's selling is worth to his clients. Ending your pricing in 5 goes better than ending it in 0. For a lot of e-commerce clients he can track how much revenue his ads brought in. They discuss being careful of legacy clients who you have a soft spot for and still charge your original rates. Taking care of other peoples' legacy clients is horrible. Sara is planning to implement expedited turn around pricing to deal with her clients who need something immediately. Taking into account the money you're saving clients by allowing them to avoid hiring a full-time employee is another good way to set your rates.

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