How to Get What You’re Worth
By Christine OKelly | December 12, 2007
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One problem I faced when I first started in business for myself (and still struggle with), and that most new freelancers and consultants face, is charging less than they are worth for their products and services.
Why is asking for what we’re worth so difficult? The answer, I believe is rooted very deep in our psyche. Setting a price is essentially setting a value for your worth. The fear that someone may think that we are not “worth” a set amount can be a deep blow to our self esteem – if we allow it.
But now we’re moving into 2008. It’s a new year and it’s time for a new mindset. Even if you feel you’re getting what you’re worth, if you’re not completely satisfied with where you’re at now, I challenge you to push further.
Why You Need to Get What You’re Worth
In my opinion, you live this life that you’ve got exactly 1 time. That’s it. And because this is the only life you will ever get, you may as well get the most out of it. When there is an imbalance between what we feel you are worth and what we are actually getting, there exists a constant, nagging, unsettling burden.
When you wake up each day and you feel a synergy between the value you are providing and the compensation you are receiving, you can go through the day clear minded and free of resentment.
Why Do We Allow Ourselves to Charge Less Than We’re Worth?
There are several reasons for this:
- Many people struggle with issues of feeling worthless or valueless in their early life and never choose to free themselves from these issues though they have complete power to do so.
- If you came from a family that was struggling financially, you may not believe that you truly deserve more and that by asking for what you feel you are worth, you are somehow a sham. But other people are asking more for the same services you provide – why shouldn’t you?
- Charging more for services may mean dealing with a level of clientele that you’re not confident dealing with. Many small businesses and freelancers are charging small business rates to provide excellent service for broke small businesses when they could very easily provide the same quality of service to large corporations and charge a corporate rate. The reason they stick with the small business client is because that is who they feel comfortable with. Why not step out of your comfort zone a bit? Other people are doing it, why not you?
- Maybe you think there is something ‘lesser’ about yourself than the rock stars in your in industry – wrongly thinking that the other guy possess something that you don’t. This not always the case. I’ve known several people who would be considered ‘rock stars’ in their respective industries, and they are typically just more self confident and skilled at self promotion than the majority.
Action Plan:
Make a concerted effort to disassociate yourself with any preconceived ideas you may have about your worth or value by doing exercises to increase self confidence. Get comfortable with groups outside of your comfort zone. Learn to be a powerful self promoter by reverse engineering that things that are working for the top dogs in your industry.
How Do You Know What You’re Worth?
Oftentimes WE are the last people to know what WE are worth. The reason is that we do not decide what our value to other is – they do.
I found this out once when I still thought of myself as having a $40 per hour value. Then a colleague of mine wrote to me as asked me if they could offer my copy consulting as part of their package and bill me out at $150, allowing them to keep $50 while I kept $100. With that one email, the mindset I had of my value increased nearly four-fold.
I had worked with this person many times and he knew my abilities. Though I didn’t realize it, he could clearly see that the consultation I was providing to clients was making their businesses a large amount of profit and absolutely worth the small price of $150 dollars. Many times, others have a clearer picture of your worth than you do.
Design can work the same way. If a professionally designed ecommerce site will sell 3 times as much inventory as a one with a stock template, then the value of that design far exceeds the number of hours spent creating it.
Case in point, do you think a company would pay $30,000 per month for a copywriter? Here’s an excerpt from an article by Anne Holland published on Chief Marketer:
StomperNet’s Fallon hired one at a cost of $30,000 a month but said the ROI was obvious given the $12 million in sales the move helped generate.
This example brings about an important point. The copywriter in this example clearly did not set his or her value based on an hourly rate, but by the value the customer would receive from the services provided.
Action Plan:
Before a potential client can ask you, “how much do you charge for xyz?” Ask them instead, “what would it be worth to you if I could triple your sales in 3 months” or “what would it be worth to you if I could get you 500 new subscribers?”
In order to pose this sort of question, you’ve got to be able to get results quantify your results. If you’ve been providing services to clients and never following up on the outcomes, perhaps its time to go back and ask how your work has impacted them so that you can begin to get an estimate of your value.
It’s possible that you may not want to know how your work has impacted past clients. What if it didn’t? This is completely possible because if you’ve been working with an hourly mindset, you were probably more concerned with getting paid for the work you were contracted for than you were about their bottom line. If this is the case, now is the time to start thinking more about your worth in terms of value and less about your value per hour when going into projects.
Taking Your Effectiveness to the Next Level
In order for your work to become more effective, you’ll need to continue to refine your skill. Though largest obstacle of getting what you’re worth is getting over the hourly mindset we’ve learned through years of working as an employee, the effectiveness your work provides is certainly a driving factor.
You don’t need to take years to develop your skills to a ‘master’ level before asking for what you’re worth. There is always someone willing to pay for every level of expertise. The important thing is that we don’t get stuck at one perceived value and then never evolve.
Maybe you feel as if you need to completely change industries to provide more value but are afraid of uncharted waters.
One programmer former .Net programmer that I know was bored to insanity with his current career and continued to lose jobs as people outsourced more to other countries. He decided to learn a new programming language that he knew nothing about and paid an expert $150 per hour for training. He was not rolling in dough when he did this. In fact, he had to scrape by in order to pay for this training. After 10 hours of training and 8 months of self-taught learning and lots of hands-on practice, he is now ranked among the top 100 programmers in that niche and charging $100 per hour for his services. (I’m sure there are other programmers that are just as good as he is who are making , but his extreme level of confidence and knack of self promotion set him apart from the rest.)
If you want to learn how to build a more popular blog, or write more effective copy, create better landing pages, or optimize websites you can find lots of information online for free. However, the personalized attention you can receive from talking with an expert in a one-on-one consulting setting about your particular situation can be monumentally more effective than any one-way information you can find online.
Action Plan:
If you feel that you need more training in order to deliver better results, seek out a mentor help you take your skill to the next level or pay an expert for one-on-one consulting. This is probably some of the best money you’ll ever invest in yourself.
Summing Things Up
- Decide that you deserve to have everything you want in life
- Disassociate your work value with your value as a human being
- Take action to rid yourself of any preconceived ideas you may have about your worth or value
- Start thinking in terms of value provided to the customer rather than the value of your own time
- Begin quantifying the dollar value or personal value that your services are generating for others
- Continuously find ways to hone your skills by learning from experts, practicing, and experimenting
Topics: Business Development, Freelancer Tips |
39 Comments »
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Hey Christine, great article.
Another way to charge that I think works very well is by-the-package. If your business allows it, charging a set amount for different packages can be a great way to set your own value and estimate the value provided to your clients in one fell swoop.
Thanks!
I love the idea of charging for ‘packaged’ services. It’s a great way to give customers everything you think they will need to be satisfied or achieve their goals even if they don’t know what they need. Excellent point Mason!
My golden rule (financial services business) is NEVER EVER EVER charge by the hour. That is trading time for money and a client will not see the value of what is done & the knowledge and experience necessary to do a great job when based on time alone. Furthermore, in any industry there is a ceiling to what would be acceptable on this basis.
Christine, you know I reduced my client base dramatically a few months ago to make space for my online business. A fascinating result is that my income has increased significantly because “better” quality clients have filled the space. Case sizes are now probably 8 times bigger yet not one client has queried the amount I am earning even though sometimes running into 5 figures (that’s sterling so double for $) for a single piece of work!
You are absolutely right - use someone else’s guide to your worth it is almost certainly higher than the value you place on yourself. It certainly has been for me.
Mark - this is excellent advice. In an industry like yours where your knowledge is clearly more valuable than the time spent - this is critical. If it takes you one hour of time to do an action, but you leveraged 10 years worth of knowledge, education, and experience to know how to use that hour, then the value they receive is far greater than that 1 hour of labor.
Thanks so much for sharing your story!
Hi Christine
It’s really interesting you mention undervaluing ourselves in business as I touched upon that in a blogpost I’m currently writing, looking at the things I do or have done in my life to jeopardise my road to personal wealth.
I’m a classic case of not asking for what I deserve or asking for a lot less. Along with that, I kinda feel that if I ask for less, they’re more likely to accept. My family also have a long history of just getting by or struggling most of the time.
I am getting better at quoting a fee that’s more reflective of my worth & experience, but it’s definitely gonna take some time before I’m 100% there.
Thank you so much for this site, for sharing your story, for your open-ness and willingness to tell the truth about the vulnerability and fears that stop us from being our true selves, and how we can all break out of it.
Amen to the future…
That’s great to hear that you’re getting better at asking for a fee that is reflective of your worth and experience. Just knowing that you have the power to ask for what you’re worth is half the battle, even if it takes some time to ramp up to getting there.
I understand your point here: “I kinda feel that if I ask for less, they’re more likely to accept” because I have felt that too. However, we’ve got to learn not to associate a lost proposal with a ‘failure.’ Instead, view it as victory sign that you are getting closer to getting what you’re worth.
Black Pixie (is that your real name ;))
100% on the nail “…if I ask for less, they’re more likely to accept”.
I fell for that “self coding” for years and then through need I started to increase my rates. The great thing is I then started getting comments like “I always thought you undercharged for what you did”. I now totally belief that if you do a great job, your clients / customers like you, you can charge what you like (within reason) because most of the competition couldn’t care less about their customers and it shows in very poor service.
Believe in yourself and stand tall
Christine:
You did it again! EXCELLENT advice, especially since we are all gearing up for the new year soon.
I have on a few occasions written about the value of charging what we think we’re worth and then expecting to get it. In fact, I wrote about it last week and linked to another blogger who talked about it.
You are right that oftentimes other people can see the value of our work more than we can because it’s hard to be objective. I’ve come a long way in learning this lesson and I’m still learning.
I particularly agreed with the reasons why some of us have a hard time coming up with a price for our services. You really nailed it!
Thanks for coming onto the blogging scene the way you have and for making such a big difference. You are a way cool “self made chick”!
Thank you so much Stephen! I am also still learning this lesson as well as trying to get over a counterproductive mindset about personal value and money from my own past.
Sometimes I think we get into a rut and start believing that what we’ve got now is what we’re worth. But truly, we are in completely control of our worth. I think it is empowering to know that the main thing holding us back is our mindset about what we’re worth.
Thanks Christine.
The mistake most people make is not calculating the reseller’s cut in their prices. If you charge low, how can you enter into joint ventures and pay a healthy commission to people who promote you?
The next step after increasing your rates is making your services scalable. And earning on performance.
The richest lawyers are not the ones that charge an hourly rate. But they are those that work on cases for free but keep 25-50% of the damages they help earn.
The richest copywriters are those that charge 1 cent per mail sent. (Not per word written. Most beginner writers charge on the basis of how much they write. The experts charge on how popular their writing becomes.)
To reach that level - you’ve got to: 1. Become very good at what you do. 2. Have some money saved up. Because these scalable models may take some time to start generating cash flow for you.
You are absolutely right about this Anke. I made the mistake of not calculating a reseller cut when I first went into business for myself. By adding a reseller’s cut, you instantly have a network of people who want to promote your products and services.
Thanks for sharing!
We implemented a very simple system to measure our rates and increase them appropriately.
1) Do great work
2) find the time to sell your services in whatever many you prefer
3) continue until you find yourself turning away work you would take if you were not busy on a consistent basis
4) raise your rates until you no longer turn away work you like
5)Repeat.
Everyone spends so much time worrying about the market, what everyone else is doing and what is fair etc etc … totally irrelevant. You should charge what your personal business will sustain. And if isn’t sustaining you - then go read Christine’s or my posts on sales.
That is an awesome strategy Shane. That is exactly what the programmer in the example above had to do. After starting a blog and offering his services, he got so many requests that he couldn’t handle them all. He essentially continued to up the price until he weeded out the smaller requests and was able to pick and choose the projects he really liked and is now very happy.
Christine i absolutely loved this article (so good i had to stumble it!)
I can completely relate to getting out of your comfort zone! I think this can apply in terms of your personal growth as well, by meeting clients/colleagues, consulting on the phone, getting involved in discussions and networking (online and real world), you can step out of your comfort zone and increase your confidence and composure which will have long-tail benefits! I know i have done it!
Shane i love your system, i know you have mentioned it on your blog, simple but very effective!
Thanks for the Stumble Grace! Isn’t it weird to think that what could be holding us back from getting the value we deserve is simply that we’re uncomfortable with dealing with clients outside of our comfort zone? Congrats on having done this yourself!
All of this is fine and dandy for consultants and those whose main goal is to increase the income of their clients.
What about those whose service is not directly related to financial well-being? Examples of this would include dentistry, podiatry, plumbers, and service folk of this ilk.
Also, the medical field has another issue in that it is the insurance industry, not the doctor, that determines the rates..
Having said that, I still printed and read this article with the eagerness of a young lad!
Hi Todd! I understand your point completely - especially when it comes to taking insurance! The doctor that I go to now actually decided to operate OUTSIDE of insurance and now gets $150 per office visit for himself. People like me pay it because they want a doctor who will actually spend more than 5 minutes with them which he was unable to do when working for a clinic.
So I suppose that if you give people enough of what they need and they like you, they are willing to pay it even if is above and beyond the standard ‘market’ price.
Thanks for bringing this up!
[…] O’Kelly of Self Made Chick, does it again with her timely article How to Get What You’re Worth. She lists 3 major reasons why those who are in business for themselves have a hard time coming […]
Frickin’ fantastic article, and the last few paragraphs kicked my butt.
Thanks Dave! You kick my butt on a regular basis with your posts, so glad to return the favor! I’m looking forward to a major butt kicking from you when I dive into your 30 hour a week program!!
LOL - I meant, 30 hour DAY - not week.
[…] question never really dies, does it? Christine over at Self Made Chick has some suggestions in “How to Get What You’re Worth.” (She mentions goal setting in this post, […]
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I followed the link from Freelance Parent over here.
This a very well-thought out post. This is going to be helpful to a lot of people who will likely be reassessing their businesses in January.
@ Laura
I hope you subscribed to her RSS, she is one very smart lady and I would love to be able to afford to hire her to work with me on my site.
As usual Christine, you have loaded your article with carefully crafted ideas and thought-provoking insights. Kudos!
I love how you build your case and then summarize, like a skilled trial attorney! (I’m picturing Allen Shore on TV’s Boston Legal.)
I honestly believe that this whole issue is tied to a person’s sense of self worth and level of self-confidence. We must get to a point where we believe in our gut that we are actually worth the “big bucks!” Keep up your impressive work Christine!
Often my clients are non-profit organizations who are able to use my services because of a grant. To get a sense of what kind of money is on the table, when I am asked, “How much do you charge?” I respond by asking, “How much funding do you have available for this program.” It’s a pretty effective way to make sure I do not under charge.
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Hi Christine
This is a timely reminder. I was planning on putting my charges in the New Year by a small amount. Having read your article, my perspective has shifted and I think the increase will be larger than I had originally thought !
A strategy that has worked well for me in the past is packaging services together rather than offering them individually. I know you have written about this yourself before.
Thanks for a great post which has come at a good time for me.
Roger
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Brilliant post Christine! I am going to share this with my list.
Thanks
Dave
“Most Connected Man On The Internet”
[…] After it was all said and done, Acme gave a song and dance about the client not being able to go over x amount without senior VP status. And I’m a little shaky on some of the risks of being sued with the non-solicitation although the client did approach me. After all this: 3 dollars. Yes a 3 dollar increase. Not to fret Comeback Kids, this was a slightly expensive lesson but I get it. And there are many highlighted over at Self Made Chick. […]
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I really love this blog, thanks for sharing, I am an example of those in “The Cubicle Farm” All your posts have an inspirational message. You’re so much like the “Suze Orman” of Freelancing. Have you thought about conducting seminars based on this blog?
[…] worst part of setting rates based on what you’re worth is that you’re basically telling everyone else how you value yourself. Clients, network contact and other writers judge people based on rates all the time. That’s […]
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