Everyday low prices might work for Walmart. And competing on price may work in the fast food industry. (Although I’m not so sure. Ever eat at Chipotle?)
But low fees will only lead to disappointment and burnout when you’re a freelancer.
Here are seven important reasons why you should NOT compete on price. And why you should raise your fees starting today.
Reason #1: Low fees attract problem clients
I’m overstating this a bit, of course. Not every client to whom you’re charging low fees is a problem client.
But in my experience, a great many of them are.
Why is that? Lots of reasons. But a big one has to do with how much these clients “get” what you do and value what you bring to the table. (After all, it they really valued your work, they’d be willing to invest more into it, right?)
As a result, these clients have unreasonable expectations. They complain when you won’t do more work for the same (or lower) rate. They constantly bombard you with questions and requests. They continually push the boundaries. Overall, they’re a pain to work with.
And to top it all off, they usually delay payment as long as possible!
Reason #2: Low fees attract clients that refer you to other low-paying, problem clients
As you might guess, this becomes a self-perpetuating problem. Your low fee clients can’t wait to tell their colleagues about the STEAL they got!
And guess what? Their colleagues typically operate from the same playbook (at least the ones who want to take advantage of your low fees). Which means more hassles and constant negotiation.
Even worse, by sharing how much they paid for your services, these low-fee clients can sabotage your efforts to land new higher-fee clients!
Reason #3: Low fees attract low-commitment clients
As mentioned above, these clients don’t see the value in what you bring to the table. Instead, they see your services as a necessary evil—and they think any other writer could do the job just as well as you. So they treat you like a commodity.
Which means they have no loyalty. If a better deal comes around, they’ll drop you in a second! (Heck, they’re used to going from writer to writer. And they probably don’t think much about the hassles this turnaround creates!)
Bottom line: They don’t value quality. They don’t value your skills, experience and expertise. What they do value is their checkbook.
Reason #4: Low fees repel (or scare off) high-quality clients
For most high-quality clients, low fees are a red flag. It shows a lack of confidence in your work and raises questions about your abilities.
As a result, you scare them off before the conversation even starts.
Higher fees alone don’t automatically attract better clients. But it’s challenging to attract better clients with low fees.
Reason #5: Low fees lock you into a dangerous cycle
When you charge low fees, you start a dangerous cycle within yourself.
You start to see yourself as a lower-value resource. And that thought starts to infiltrate your psyche. It shows up in your conversations with your prospects, which (in turn), keeps you at a lower pricing level.
And once you’re stuck in this cycle, it’s hard to get out! It becomes your reality.
Reason #6: Low fees mean you have to work harder
When you’re competing on price, you need more projects and more clients to earn a decent income.
In addition, managing clients comes with some fixed costs. And the more clients you have, the higher your fixed costs.
What’s more, you’ll spend a lot of time trying to land new clients and projects to meet your income goals.
And all of this puts you on the express train to burnout town.
Reason #7: Low fees are unnecessary!
Here’s the best reason for not competing on price: You don’t have to!
Unless you’re just starting out as a freelance writer (or have few or no relevant skills), you don’t have to take the “I’ll work at any price” route.
Most experienced freelancers will tell you that, in hindsight, they underpriced their services when they first started. Sometimes for years!
You’re not Walmart! Don’t fall prey to the consumer mindset of finding the low-cost provider. Take the time to find your value and your differentiators.
Put together some solid testimonials. Figure out what separates you from the competition. Focus on a target market or project specialty. Then set your fees accordingly.
You don’t have to double your fees overnight. You can do this gradually. But start today. And commit to bumping up them bit by bit.
Were you ever stuck in the low-price trap? How did you get out of it?