The Way We Work
April 27, 2011 by Guest Blogger

By: Ramit Sethi

Why is that some freelancers have a few ultra-value clients and can turn low-value projects away, while others bid on everything and struggle to raise their rates? The answer is probably not what you think.

You probably don’t want 25 clients to pay you $10/month. That's a nightmare to manage. Plus who wants to deal with low-value clients? It's often better to get a few high-value clients. But to get them to pay, you have to treat them differently. Use any of these 5 techniques to double your freelance rates:

1) The Briefcase Technique

I’ve used the briefcase technique to earn thousands of dollars in salary and freelance negotiations. It works so well when you’re going into a client meeting where they are going to get to know you and you’re potentially going to work together.  They are going to ask you some questions, but you’ve already understood what their problems are how to solve them (see technique number 4).

The client says, “I’m curious, what’s your price” and you say, “Before we get to that let me show  you something I’ve put together”.  This is when you pull out a proposal document about things you’ve found in their business that you can improve and exactly how to do it.  To the business owner, it’s the most compelling menu they’ve ever received.  It’s a list of problems they already know about and you’ve identified them from the outside and they realize that you’re the person to solve them.

Right there you’ve closed the sale. (Watch it in action here: The Briefcase Technique.)

2) The Power Referrals Technique

Don’t expect someone to do it for you.  Reach out to them individually. Here’s a script to use with current or past clients to build a stack of referrals:

You: “Hi client, would you mind if I get a referral from you?”
Client: “Yeah, uh, I can probably do that.”
You: “No need to worry. If you prefer, I can write it up for you and then send it to you for your review. Or if you want to write something, feel free, but I’m happy to write it up.  Does that sound good?”
Client: “Sure, that would be great -- email me a draft this week.”

You can’t afford to be shy about this -- it will cost you money over time.  Most people don’t even think to go out of their way to just send you a referral.  It’s up to you to take care of it for them.

3) Higher-Value Technique

Move up the value chain by providing higher-value work. So, you work with an existing client.  They like what you’re doing.  You’re doing freelance work for them, and you’re making $20/hour.  Here’s what you say to start getting higher value work:

“You know what?  I’ve kind of got this under my belt.  I’ve noticed a couple of other areas that are areas that you could actually really improve, and I think I can help you.  Would you mind chatting about this later this week?”

Then send over a project proposal.  Because they already trust you, because you’ve got this halo effect, they’re going to give you more leeway to experiment into other areas of the business, and that is how you can progress from just writing copy, for example, to doing high-level sales strategy.

Here’s a phrase I use.  You can use this right now:  “Just to note, I’ve always wanted to get more involved in affiliate management, and I had a few ideas I think I could help you with.  Would you be interested in talking about them at our next meeting?” They are most likely going to say yes.  Why?

  1. They trust you.
  2. They want to keep you happy.
  3. The client has a problem with affiliate management, and here you are, offering to solve it for them.  Of course they will talk to you about it.  If you’ve got a client, figure out what you can offer them to move from where you currently are into something even more valuable.

For example, one of the freelancers on my team started out doing simple tasks for me.  I noticed she was really good at communication and a variety of other skills so over time she started taking on more responsibility with different advertising projects we were working on.  Now I have all these new business challenges and I just throw them her way and I know that when I send her an assignment, it’s going to get done well.  She systematically went from entry-level work to taking on high value projects that earned her tens of thousands of dollars.

4) The Client's Head Technique

Pay attention to your clients, and get inside their heads. It’s important that you understand that 80% of the work happens BEFORE you enter the room with your potential client.  You must understand their problems, understand what they value, and ask them about it.  I teach my students a technique called “ask without selling” where you ask your clients simple questions like:

“What are your three biggest business challenges?”
“What are the three metrics you measure?”
“What did you try in the past?  Why didn’t it work?”

Then tie your deliverables back to the answers they give you. For example, instead of pitching a potential client, “Hey, I’m a writer, hire me!” (what 99% of freelancers do) you would say, “I’m a writer, I understand your challenges are X, Y, Z, and I can help you solve X.  Here’s how ... ”

If a potential client says, “I’m swamped.  Every day, I have to write something new.  Every day, I have to edit a video.  Every day, I have to respond to employee concerns.  In six months I want to have things under control so I can have more time with my family.”  Well, guess what?  What you’re doing right now on your note pad is you’re taking notes.  Then when you go to make your pitch you’re definitely going to say, “I know time management is important to you.  That’s why we can do one of two ways.  One, I can do a call with you once a week in your car, as you’re driving into work.  Or two, I can simply send you an updated spreadsheet of what I’ve been doing this week and any questions I have.  That way, you have more time with your family and you never have to worry about handling any of my concerns after 5:00 p.m.  I will do the work.  That’s why you’re hiring me.”

Can you see the difference?  It’s a key distinction between the freelancers that consistently work with high-value customers and those that are stuck getting paid low hourly rates.

5) Cautious Free Trial Technique

So many people worry about free vs. fee ... Should you go with a lower rate?  There’s actually two ways to think about this.  Some clients are going to haggle your rate down, no matter what.  So, what should you do?  The first option is to stand firm on your rate, which you will do if you know that the client is very, very interested in working with you.  And that’s typically because they’ve gotten really excited, they’ve said yes a lot, and they are excited.  When you say, “No, I don’t discount my rate, if it’s out of your range, that’s OK, this probably isn’t for you,” smile.  You can actually hear the smile over the phone.  It really, really works.

Here’s how you might say it: “You know, it’s not ideal, but I’m willing to try a discounted rate of $35.00 for the first three weeks.  If I agree to that, I think you’ll agree it’s fair to write down some key results that we can work towards.  And after three weeks, assuming I do an extraordinary job, I’d like to discuss working at my standard rate.  Does that sound fair to you?”  These are ways that you can think about accepting a lower rate, as long as you set a date in the future where  you and the client are going to discuss it again.

To learn even more about my “tuner strategy” to scale up your freelance business, I’ve put together four in-depth freelancing case studies for you.  Get access here.

Have you found ways to increase your rates recently? Tell us about them in the comments below.


  • https://www.facebook.com/CaptainAJMorgan Ariel Morgan

    I really like these tips! I also like the tips and advice I found at strat-talking http://strat-talking.com/negotiation-techniques-for-freelancers-and-contractors

  • Cheryl

    Good advice, except for the section where you said a freelancer could suggest she'd call the client while he was driving to work, so it would save time. BAD!!!! Do you know how many accidents are caused by people talking on cell phones? In many states, it is illegal to talk on a cell phone while you're driving.

    Suggesting making a call while driving might be OK if you know for sure the person has a speaker phone or uses hands-free, but still not the best thing to do because talking and listening means the driver can't concentrate totally on his driving.

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  • http://scribie.com Rajiv Poddar

    The best strategy is to develop a clientele who will work with you on a long term basis, outside of freelancing sites. Finding freelancing gigs on job boards is great for short term, but it's ultimately a race to the bottom. There will always be someone who will outbid you. Instead impress them with your work and convince them to work one-on-one with you. Good work will lead to referrals and more work and more money, at your own terms.

  • http://yourchildbenefits.blogspot.com/ Helen Neely

    I love Hamit's approach to negotiating business and at interviews. I think the briefcase method will definitely work - will try it next time I go for a job interview.

    Thank, Hamit.

  • jameerali

    I am totally new in freelancing. I am yet to obtain my first contract because I have just joined oDesk. I have read your advices carefully and I am hopeful to benefit from them in near future. Thanks.

  • http://www.GetMoreReferrals.ca Andy D’Silva

    Ramit, even though I opted to not commit to the Earn1K course I don't doubt it will provide it's students with what it promises.

    I've implemented what you have given away for free (the same content as in the link above) and it really has helped me change my "thinking" about money and what my time is worth.

    I've got a couple of appointments setup next week and continue to use the briefcase technique with good success. i've been getting all my clients mainly thru cold calling - which is scary as HELL! I've made a game of it. I'm looking for 3 No's each day before I stop making phone calls. I typically dial the number stare at it for a while and then just push dial. i have an idea of how I want the call to go but doesn't always go that way. The anxiety is starting to lower - it's been about 3 wks of training :O)

    My main takeaway from you is tin how your writing has changed on your blog. Your current style is to be modeled for sure. it's something I'm striving to. All Meat No Potatoes..

    Ok, I think I'm inflated your ego enough. Thanks for the way you are changing lives and influencing the alternative to "saving".

    A.D'Silva

  • Fabricio

    Hi,

    It's a great article indeed. For all of those who say that these techniques doesn't work, just ONE WEEK after reading this is obviously because they didn't tested.

    I use the briefcase technique and I got my first contratct for 200% what I was going to ask.

    I toke the risk to ask for a higher price in that moment due to one comment he made of the price I toke out from my maletin and was almost kind of magic.

    Keep writing this kind of stuff that make us learn from a amazing person as you, THANKS!!!!

    Fabricio, from Argentina!

  • http://www.themespice.com Johan

    Very nice Ramit.

    And think that guest blogging at the odesk.com site is a good move since this is where a lot of your potential customers are.

    (by the way alo see that comments are loosly moderated, which is refreshing)

    cheers!

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  • http://www.cellsforcells.com Jason Clements

    Ramit - on point 2, are you referring to LOR (Letters of Recommendation)? That sounds like a script for drafting an LOR. Do you have a different script that works for you to gain New Clients OR getting a referral from a current client? Thanks, Jason

  • http://jasperespejo.com Jasper Espejo

    I've know about briefcase technique from one of the videos I got from a discounted offer from your blog. I tried it on my last two new clients and it sure works. The first client ended up paying 300% more than what she actually intended to pay after seeing my proposal. The other one did not even haggle for a lower price.

  • http://adoborepublic.net Manuel

    I'm not one who'll offer cheap services for the sake of getting lots of customers, so the higher value technique is what I'm employing when talking to a client. It also helped that my past and present clients loved my work and have referred me to people they know. Quality work equates to higher pay.

  • http://ipleaders.in Ramanuj

    Great post Ramit - I have read about these techniques from your blog before and tested them - they work fine!

  • David from Paris

    This is a great article! Thanks.

    I am an actual Earn1K student, and, for those who doubt, those techniques work. They WORK. Just apply them and don't do your "I-know-it-all-already" kind of person.
    I apply them, and have everyday astonishing results.
    Take care.
    David

  • http://www.w3logics.in Rakash

    I want to clear that none can become rich after your blog

  • http://33mileradius.com Matt Staton

    One of the most profitable (and painful) things I've learned along the way is that my cheapest clients are usually (99% of the time) the most demanding.

    Raising my rates actually helped me save time and make more money.

    Recently, my most effective option is simply offering different payment options.

    Payment Option 1: $1,500 for the project
    Payment Option 2: $750 down and $750 in 60 days
    Payment Option 3: $175 a month for 12 months ($2100 total)

    You'll notice Options 1 and 2 are nearly the same. Customers like choices (but not too many) and see Option 2 as a win for their company.

    Understanding the value of your services and your customer's potential ROI will also help you more confidentially ask for and get your new rates.

  • http://katrinacanlas.com KC

    Increasing one's rates is directly proportional to the skill and work experience a provider has. Residing in a third world country has always been a reason why employers lower my rate because they knew I will take it anyway. What I did was start small and as I gained more clients, I began increasing my rate. I used to write articles at $2 apiece no matter how long they are. Now, I am able to charge $15 per hour because lots of clients trust me and I have a good work background. It takes time but with talent and patience, increasing your rate is really possible.

  • Ningappa Chandrashekhar

    Sir, I am Tax Consultant, having 25 experience in book keeping, pay roll processing need on line job works