3 Signs It's Time to Rethink Your Rate Structure

We've talked about setting freelance writing rates and figuring out when you need to charge more. But the amount you charge isn't the only potential problem with your freelance writing rates. Your rate structure can be equally problematic. For example, are you charging per word when you should be charging per article? Are published hourly rates turning off prospects and sending them to the competition?

Let's look at three signs it's time to rethink your rate structure for your freelance writing services.

1. Prospects Aren't Biting

If you aren't contacted by many prospects even though your site and rate chart get adequate traffic, something's wrong. Your first thought might be that your rates are too high and that you need to lower them. But that isn't always the case. You have to remember that rates are somewhat open to interpretation. How you want to charge clients is irrelevant. How they expect to be charged is what really matters.

Let's say you offer blogging services. You list your rates as $75 per hour, and you can typically write a blog post in your specialty area in one hour. Your competition generally quotes per post (let's say $100 per post for this example). The client is willing to pay that $100 per post.

Your rates are actually lower than the competition, but the prospect never contacts you. It has nothing to do with your fees being too high and everything to do with how they interpret your rate structure. For example, they might have a set word count in their head which they (wrongly) assume will take you two to three hours to research and write.

You don't make it clear how long a post takes, how many words per post your rate covers, etc. That's because you think you have a more adaptable rate structure to account for things like research time and different lengths.

Clients just want to know what they're going to be billed. Your rate doesn't tell them that without them making an extra effort to contact you for a quote (many won't). Your competition does. They charge more. They get the gig. Yay for them! Sucks to be you.

It's time to rethink how you advertise your blogging rates. The wrong rate structure will turn off prospects before you ever get the chance to talk to them.

2. You're Frequently Asked to Explain Your Fees

Here's another sign you're using the wrong rate structure for the type of freelance writing services you provide. You shouldn't have to constantly explain how your rate structure works. If you're asked to on a frequent basis, it might be time to try something else.

For example, let's say you're trying to transition from magazine writing to business writing. You're used to charging per word -- a rate structure magazine editors are accustomed to working with. So you advertise per word rates for your business writing services. Commercial clients are much less familiar with this rate structure, so you're asked to explain or justify your per word rates.

Your rate structure shouldn't cause confusion. You should adapt to the norms of your specialty area. If clients are comparing writers based on per project rates and quotes, you should provide rates in the same structure. If you write features where per word rates are the norm then you should quote in that fashion. If you specialize in some area where hourly quotes are typical (I've yet to find a good example of this in freelance writing), then stick to that. You'll spend less time explaining your fees and more time on actual billable hours.

3. Add-On Fees Have Become the Norm

Rate structures are about more than the way you charge. They also encompass what's included in those fees. You have a set service level covered by your advertised rates. Let's say that includes a draft and one round of edits. Anything beyond that incurs extra fees.

When you review recent orders you find that 65% of clients end up paying add-on fees because they request a second round of edits (minor changes to the first round of edits you completed). That's a sign something is wrong with your current rate structure. It says the current package you offer isn't adequate for the market you're targeting. Your true base service isn't actually what you advertise. This can alienate clients -- not something you want to do.

In this case your best bet is to rethink your packages and rates. If you insist on keeping the current package, perhaps advertise a second package that includes extra editing time (or more interviews, or whatever clients regularly request). No one likes being charged "extra" fees for something that seems like a basic project necessity.

At the same time, you should absolutely charge more when clients increase the scope of a project. The idea is to do so using a rate structure that gives clients flexibility without feeling like they're being nickel and dimed to death every time they hire you.

Have you changed your freelance writing rate structures recently? In what ways did you change them and why? I'm about to revert my rate structures for a few services back to my old model. Why? I noticed that prospects were dwindling for those specific services since the previous change. Originally I assumed it was because rates went up. But so did other rates, and those services continue to attract new prospects on a regular basis. I had to rethink my rate strategy. Do you?

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Jennifer Mattern is a professional blogger, freelance business writer, consultant, and indie author. She runs numerous websites & blogs including All Freelance Writing, Freelance Writing Pros, NakedPR, and Kiss My Biz.

Jenn has 25 years' experience as a professional writer and editor and over 20 years' experience in marketing and PR (working heavily in digital PR, online marketing, social media, SEO, new media, and thought leadership publication). She also has 19 years' professional blogging and web publishing experience (including web development) and around 18 years of experience as an indie author / publisher.

Jenn also writes fiction under multiple pen names and is an Active member of the Horror Writers Association.

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6 thoughts on “3 Signs It's Time to Rethink Your Rate Structure”

  1. I don’t post my rates. I’ve toyed with the idea plenty. For me, I don’t find posting rates a plus or a minus. However, this post, plus folks who have said in the past that posted rates have worked well for them, have changed my mind.

    Reply
    • Yay! As a buyer it drives me batty when people don’t post rates. Simple solution though — I don’t hire them. I’m a big fan of posting freelance writing rates publicly. It’s helped a lot with weeding out duds who can’t afford the rates and saves me time in initial client chats because they already know what to expect. If you plan on adding them, I’m thrilled to hear it. 🙂

      Reply
  2. Your point about tailoring the type of rate to the type of client is absolutely paramount. Most non-publishing folks would freak out at hearing “$1 per word” for a 500-word corporate web page, for example…but won’t think twice about a $500 estimate just positioned as a flat project fee. Conversely, I’d never try to sell an editor on my services for $100 an hour for five hours, for example, even if that’s precisely how much it’s going to end up working out to.

    Same costs, but psychologically worlds apart.

    In that way, I would say my structures have undergone a steady evolution over the years. Primarily, it’s because I’m better at ferreting out which type of answer someone will respond best to. The person who asks me, “What’s your hourly rate?” may get a very direct answer, or a very oblique one, depending on circumstance.

    Reply
    • Exactly. It all comes down to how the prospect feels about your rates. That’s why hourly rates are usually a bad idea for freelance writers. Writing is valued a certain way by most people. If I went to a business owner and told them I was charging them $150 per hour to write a sales letter, many would balk. Why? Because that hourly rate is very likely higher than their own. They don’t stop and crunch the numbers, figure the value of their benefit package into the mix, the fact that all of your hours aren’t billable, etc. There’s an immediate internal reaction when they see the number. And that’s something we have to expect and be able to anticipate on a case by case basis.

      Reply
  3. Well, I’m going to be the contrarian here…;) As a commercial freelancer, I’ve never posted rates and advise other commercial writers not to as well. In my experience (18 years in the business), the kinds of clients I want to work for don’t expect to see rates posted. And mainly because they understand, as do I, that there’s no such thing as a “typical” ________ (marketing brochure, trifold, case study, direct mail campaign, sales sheet, web site, etc.).

    Every single project is different, has different parameters, differing number of pages, different processes to gather one’s source materials to write it, differing # of interviews and background reading necessary, etc. And all those variables will have an impact on a quote. As such, to post a rate for a particular project type is impossible.

    And yes, one can post ranges, but that brings up a few new potential issues: 1) if you state that your range for say, a trifold brochure is, say, $500-1200, the range is so wide as to be virtually meaningless. Yet, that’s the reality. There are brochures that could only take $500 and others as high as $1200 or more.

    And, 2) when a prospect sees those ranges, and needs, say, a trifold done, it’s an immutable law of nature, no matter how much they deny to you and themselves that they’re doing it, that he/she is going to latch on to the lower end of the range, and think: “Ah, I can get a trifold for $500.” When in fact, there’s only a very small chance that that’s all it’s going to cost them.

    Once you get their specific parameters, if you come back and say, “It’ll be $850,” even though it’s well below your upper-end limit, it’s way above $500, and they’re disappointed, wondering why you couldn’t do it for $500. And you’re off on the wrong foot. As I’ve seen it, there’s very little upside to posting rates, and a lot of potential downside.

    It’s quite possible that it’s a different dynamic for magazine/online writing, but this is my experience in my field.

    And I agree that you should never quote your hourly rate to a client, but rather offer a flat rate for a particular project. Jake’s right (btw, hey, Jake – hope you’re well!); say $100 an hour, and a client might freak. But even if you know it’ll only be five hours, telling a client $500 usually lands better.

    My two-three cents…

    PB

    Reply
    • Yeah, you and I disagreed about this issue once here before. 😉 And while my experience isn’t quite as extensive as yours (about 12 years), I’ve experienced the opposite in the business writing I do. When I post rates inquiries increase overall while those who can’t afford the rates drop like flies.

      But this is why I suggested what I did the last time we talked about this — not that you have to post exact rates, but rather examples or ranges in situations where it makes more sense. If you’re not comfortable putting an upper limit on a range, “starting at” works just fine in my experience as long as you can tell prospects what’s included at the low end. It’s important to put that number in context the first time you talk to a client.

      Again, it’s a case of knowing your market. We both work in commercial writing. But that doesn’t mean we’re working with the same people. Much of the copywriting I take on is online — not in print. It’s very possible prospects wanting print materials will have different expectations. There’s a broad range of work out there, even within the commercial writing world. And because of that our experiences will probably never mesh on this one.

      Reply

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