4 pricing mistakes freelancers make and how to avoid them

1. FREELANCER TIPS 4 big pricing mistakes freelancers make and how to avoid them More freelancertips on www.freelancermap.com...

2. 4 big pricing mistakes freelancers make and how to avoid them • Having the right pricing policy consists of various elements. Knowing your market, competition, your client and the capabilities of your business are the foundations of pricing. Getting it right is extremely important, too. Charge too much and you might lose potential clients, ask for too little and you might end up being undervalued by them on that basis. Hitting the sweet pricing spot can be difficult and there are a lot of dangerous mistakes to make along the road. In this article, we summarize four pricing errors and give you advice on working around them.

3. 1) Focusing on the lowest rates • Starting out, it is easy to fall into the mindset that the cheapest goods on the market have the best chance to sell. Very often, this is as far from the truth as can be. Imagine buying a laptop for $200 versus buying one for $500. Which is better? Your intuition will automatically tell you that it’s the more expensive one, even though you know nothing about the two devices. In consumer tech, you can realistically compare two laptops. When freelancers are concerned, it gets harder and that is where the price is even more important. Having a low price will often be seen as a signal that you don’t value your own skills, leading your potential employers to think the same.

4. 2) Not having a Minimum Acceptable Rate (MAR) • To stay on the topic of low prices, having a minimum acceptable rate (MAR) is something that too few freelancers focus on. A simple, but good way to calculate your MAR is to divide your current or previous salary by the work hours you plan to put in. Or, if you are just starting, think about what your time is worth to you. Rates that make your life comfortable also serve as excellent motivation. Working for money that you know will only be enough to make ends meet is not likely to yield the best results.

5. 3) Asking clients to compare your prices with others • Are you nervous about asking your employer about how much they charge other freelancers on similar services? Good. You shouldn’t do that. There are a couple of reasons for this. Firstly, this is research that you should do for yourself – you have to know the market. If you don’t, clients will doubt your professionalism. • Secondly, focusing on comparative pricing might scare the client away, making them think that something isn’t right. Asking someone how much they are willing to pay for a product often makes them think they’re being tricked in some way or leads to unrealistic pricing anyway. Know your value and don’t be afraid to stand behind it.

6. 4) Not having premium packages (even if they don’t sell) • Anchoring is the concept of providing comparison points and influencing your clients to prefer a specific option. Studies prove that anchoring can increase the likelihood of something getting bought. A way for freelancer to use anchoring is providing different options. Say you have 3 packages: basic for $100, advanced for $200 and super premium for $500. You might not sell any or very little of the third option, but it serves a purpose. If you only had basic for $100 and premium for $200, studies suggest the likelihood that people chose to pay $200 is lower than if they have three options.

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