Pricing is a tricky thing. If you price your work too high, you’ll lose the prospect. But if you price too low, you’ll look like an amateur.
How do you get it right?
In this session of The High-Income Business Writing Podcast I’ll show you how to approach your pricing more systematically. I’ll share a simple process that will take much of the anxiety out of the equation. And I’ll give you smart questions to ask your prospect before you quote.
The notes that follow are a very basic, unedited summary of the show. There’s a lot more detail in the audio version. You can listen to the show using the audio player below. Or you can subscribe in iTunes or on Stitcher to get this show delivered straight to the Podcasts app on your smart phone, tablet or iPod.
#1: Hourly vs. Project?
- When you price by the hour, you make LESS money the faster/better you get
- When you price by project, you make MORE money the faster/better you get
- Clients prefer a project price (hourly feels wrong to most of them)
- Clients need a price they can stick in their budgets
- You have to quote a fixed price anyway!
- Clients are more likely to agree to a fixed project price, even when the underlying hourly rate it’s based on is high (it’s a funny thing!). Conversely, you’ll likely get resistance if you quote your services at, say, $150 per hour.
- Hourly prices have a MUCH higher chance of getting put under a microscope
- Some clients will think it’s preposterous that you earn so much on an hourly basis (if you reveal that internal rate).
- Sometimes, the scope of work is such that you have to quote by the hour. Once you have a better sense of what’s involved, try to move to fixed-fee.
#2: How can you possibly quote a fixed project fee when you don’t yet know the full scope of the project?
The pricing process is a lot LESS stressful when you break it down into two steps:
STEP ONE: Give the prospect a ballpark figure on the phone
STEP TWO: If that figure falls within their budget, let them know you’ll work up a detailed quote and get back to them.
- To do this right, you need to create a master fee schedule.
- A master fee schedule is simply a menu of all the services you can provide, and an approximate project fee range for each.
- This is an internal document, NOT one you’ll necessarily share with prospects.
- If you were to ask a plumber how much it will cost to replace a kitchen sink, what will he tell you? “It depends.” He’ll probably quote you a ballpark figure, and he’ll do that over the phone, without having to see your kitchen.
- A master fee schedule allows you to screen out prospects who can’t afford you. It will also help save you time by not having putting together a detailed quote early on. And it will allow you to stay consistent while taking much of the emotion out of the process.
#3: How can you determine the “going rates” that professional freelance business writers charge for their services?
- Friends and colleagues
- Form a mastermind group
- Professional associations
- Websites of freelancers whom you know are charging professional rates
- When you’re busy and have nothing to lose, quote a new client a higher price. See what resistance you get.
- Keep a “Going Rates” file of pricing information you gather
Sample Professional-Level Fee Ranges in the Corporate Market:
- White papers (5 – 10 pages) ……… $3,000 – $6,000
- Bylined article (800 to 2000 wds) …. $1.50 – $1.75/word
- Brochure copy …….. $500 – $750/page or panel
- Case study ……… $1,250 – $1,750
- Website copy ………. $200 – $600 per page
- Blog posts …… $300 – $500 (300 – 500 words)
As a professional business writer, you can choose to work in these high-paying markets (namely the corporate market, but there are others), or you can choose not to. It’s up to you.
Part of the solution to earning more is making the decision to start going after higher-paying markets and clients. The other part is upgrading your skills (as necessary) to command these types of fees. I’ll address this issue head on in a future podcast.
The 4-Step Process for Pricing and Quoting a Project
- Qualify the prospect
- Quote a ballpark figure on the phone
- Assemble a persuasive quotation
- Follow up and get the job.
1) Qualify the prospect
Qualifying is all about asking a few questions to determine:
- If this prospect would be a good fit for you
- If the project they’re approaching you with is a good fit for you
You want to create two sets of questions:
- Those you ask so you can provide the prospect with a quote
- Those you ask ONLY after you’ve been awarded the project
Writers often bog down the prospect with too many questions at this point, many of which they don’t need to ask until they’ve been awarded the project.
When you work with a fee agreement AND you ask the right questions, you can limit the length of this initial conversation to the bare essentials.
Organize your questions using the following buckets/categories:
- Decision-making process
- Thanks for contacting me! I’m curious; how did you hear about me?
Not only is this a great conversation icebreaker, but it’s also invaluable information. Over time, you’ll be able to use this kind of intelligence to look for patterns and see where different types of clients are coming from (and, therefore, what type of marketing you should do more of).
- What are you trying to accomplish?
- What are you looking for?
Based on the prospect’s answers, ask yourself:
- Is the project well defined?
- Is it something I can do well (or am reasonably capable of doing now)?
- Are the prospect’s expectations realistic?
Make a mental note of these things and then move on to the next set of questions.
- When are you looking to get started?
Based on the prospect’s answers, ask yourself:
- Is this a realistic time frame/expectation?
- Can you fit it into your schedule?
This is more about how the prospect will be making a decision, when they’ll be making one, and what are the important factors they’ll be weighing. Questions to consider:
- How will you be making a decision?
- Who else will be involved in making this decision?
- By when will you be making a decision?
- Have you worked with an outside writer before? If so, what was your experience with him or her?
- Are you considering other firms/freelancers for this project?
Why are these questions important? The answers will tell you a lot about how the prospect is going about their challenge or defined project. If there’s a big red flag, it’s usually going to show up by asking these questions.
You’re trying to determine affordability, not necessarily an actual “budget.” Can they afford you? Do they have the financial capacity (and willingness) to pay your fees?
- What budget are you working with?
This leads us to step #2 of the quoting process…
2) Quote a ballpark figure
So, once you’ve gathered the information we just talked about, it’s time to turn to your master fee schedule and quote a fee range.
You have two options:
- You can quote the full range from your schedule
- You can quote a fixed fee, if it’s a very standardized type of project.
The key is to stay within the range. Resist the temptation to go under!
“Katie, my fee to write a 5- to 8-page white paper like the one we’re discussing is between $3,500 and $4,500, depending on the actual length we go with, the number of interviews required and the amount of research necessary. Once I know little more about your project, I would send you a quote with a fixed project fee. My fee includes all background reading and research, any interviews with subject matter experts, content and copy strategy development, title development, creating a detailed outline for your approval, the actual writing of the paper, any meetings or calls related to the project, and up to two rounds of requested revisions. Is this fee range within your budget?
Example B (standard fee):
“Katie, my standard fee to write a 2-page case study like what we’re discussing is $1,200. That fee includes interviewing someone from your company, interviewing the client, the actual writing and up to two rounds of revisions. Is this fee within your budget?
Benefits of quoting a ballpark figure:
- It can open the door to a price negotiation, and you may be able to work out a solution that is acceptable to you and the client.
- If the prospect is not willing to pay anywhere near your fee range, you will save yourself a lot of time by bringing this up now.
3) Assemble a persuasive quotation
Look at the notes you took during your call with the prospect. You probably already have a general feel for the prospect and what they’re like. What do you think? Would this client and this project be a good fit for you? If so, where in your fee range should you quote?
Use your answers to the following questions to help guide you:
- Where am I in my business life cycle? Am I still launching my business? Have I been at this for a little while? I’m a seasoned, established business writer? Does it make sense to pursue this prospect and this opportunity right now, based on where I am today?
- Is there an added prestige to be gained from working with this client?
- How do I generally feel about this prospect and this particular project?
- Even if they were OK with my ballpark figure, what’s the client’s apparent ability to pay me on time?
- How difficult would it be to secure the business? Are they almost pre-sold, or does it sound like they’ll need much more convincing?
- How badly you I need the work?
How can you make your fee agreement more persuasive?
Include an “Objective” section. This section is where you can really shine. Summarize what the prospect shared with you when you asked your “Need” questions. You’re essentially telling the client, “Look, I heard you. I understand perfectly what you’re trying to accomplish with this piece. And I can deliver that. I ‘get’ you. I’ll make you look good. I’m your guy/gal!”
All you need are two or three sentences that demonstrate that you understand what they need and what they’re trying to accomplish with this project.
Explain why you’re the perfect writer for this project. Add a short paragraph that emphasizes why you’re the perfect writer for the job. You may not be able to do this when you’re just starting out. But as you progress, you’ll be able to tell some clients about your experience in this particular industry or sector.
Detail the “behind the scenes” work involved: I’ve also found that it’s important to describe and detail your full scope of work. Not just what you’ll deliver, but everything it entails. This helps the client (and whoever else needs to approve this deal) look at your fee from a different perspective. For instance:
- Interviews with subject matter experts
- Reading and studying all background materials
- Further research as necessary
- All phone calls related to the project
- Content and copy strategy development
- Drafting of outline for client approval
- Writing the white paper
- Up to two rounds of standard revisions
4) Send your quote and follow up
- Send your fee agreement to the prospect as soon as possible (that day or the following day), and follow up the day after you send it.
- Don’t be timid when you follow up—approach it with an attitude of “Ready to do this?” rather than one of “What did you think of the price? Was it OK?”
- Exact language I use: “Hi, Jim. Checking in on the fee agreement I sent you yesterday. Do you want to get started on this?” Or, if I get voicemail, I’ll say: “Hey, just making sure you received my fee agreement. Let me know if you have any questions. I look forward to working with you soon.”
Dealing with the “Non-respondent”
How much should you follow up with prospects who don’t return calls or emails after you’ve sent them your fee agreement?
It depends on how quickly they said they would make a decision. Remember earlier when I talked about “Decision-Making Process” questions? That’s one of the questions I always ask. Not only does it help me determine if this is something I can pursue right now, it also comes in handy when trying to decide when (and how often) to follow up.
So, assuming the prospect said they’d be making a decision in the next couple of weeks, here’s the approximate sequence I would follow:
- Email the day after sending fee agreement.
- Email 3 business days after that, if no response.
- Call 5 business days after that, if no response.
- Email 5 business days after that, if no response.
- Call 5 business days after that, if no response (final attempt).
- Add them to your “nurturing” list, if no response.
One tip that has worked well for me is to let them know (on the last attempt) that this is your last attempt. Say it in a calm and professional way, but be clear about the fact that you’re not calling or emailing anymore. I’ve found that when you give them a professional ultimatum like that, you’ll finally get a response.
Thank you all for checking out this session of The High-Income Business Writing Podcast!
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P.S. Next week I’ll have part one of a two-part interview with Gordon Graham, author of White Paper for Dummies. We’ll talk about the current opportunities for writers in the white paper arena, as well as how to price and approach these lucrative writing projects. Stay tuned! 😉
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