Freelancing: Top tips on negotiating rates
What’s your fee? Many contractors will be familiar with this question, which marks the start of a negotiation. This article focusses on some of the typical ways in which you can put yourself in a stronger position.
1. Quoting rates too quickly
“It’s £850 per day, but of course that is negotiable.”
Much depends on the tone of voice, but this person knows they stand no chance of getting £850. An agent will respond by saying: “Pity, I’m afraid they’re only paying £450.”
In any sales situation, it’s important to seize control of the conversation rather than getting passively interviewed.
“It all depends on the work to be done. Can I just ask a bit more about that?”
If necessary, stop having a rate. It’s your business and you’re not obliged to have a single fee. Ask for more information.
2. Discounting before being asked
Why suggest that something is negotiable? At best, they know this anyway. At worst, you betray insecurity. Never offer a discount, there are better ways to be of value.
You need to move into a strong serving position in the dialogue so ask questions. What was of most interest about my CV? Who is in charge of the project? What is driving this urgency? Where is the work to be done? What is the makeup of the team?
By asking questions, you gather vital information about the value of your skills.
3. Talking through your CV
Contractors do this for several reasons. First,to get the dialogue into their comfort zone and in the mistaken belief that their value lies in their expertise, and talking through the CV will somehow raise that value.
In my workshops (details below), this is the biggest delusion that has to be smashed. Suffice to say, the value of the system you are about to rescue never lies in your technical brilliance. It lies in how their business relies on that system, the resulting impact of the problems, and the benefits that a rescue would unlock.
Therefore it is vital that you talk about them rather than about you. Remember that you are the expert, you know what happens to organisations who do not ask these vital questions about context.
4. Indicate availability
“Yes ... whenever suits you.”
On the contrary, it is better to indicate “dilemma”, “limitation” and hence choice on your part.
“Rates are important, but intellectual challenge is even more important: may I ask you a few questions first?” “I have a work-engagement that I need to fulfill before the summer.”
The latter may even be a project for your own business development: a training course, a website rewrite. They will usually assume it’s another client. What matters is that you are busy – not available. Remember, scarcity is valued, availability is not.
5. Being unprepared
Contractors know we have to deal with these enquiries, yet most don’t rehearse sufficiently.They have not decided on their “key five context questions”.
They have not learned how to deflect the rate-question until they understand the value of the role.
“What we must decide is how we are valuable rather than how valuable we are.” (from Edgar Friedenberg). And perhaps how we will deal with the enquiries that result.
Content provided by John Niland, Success121Managing Your Rates