It seems tempting.
Especially when you’re hearing a lot of ‘no’. Or when you’re just starting out. You’re trying to get a foothold.
Or, when you’ve hit a slow spot, and you want to scare up some quick assignments just to make the rent. So you think about dropping prices, offering low fees, just to get some work in the shop.
Actually, that often works. Going down-market can bring in clients.
Clients who will try to haggle and bargain you down even more.
Clients who are in financial trouble. Or are cash-poor, struggling, or just starting.
Clients who want more for $9 than good clients want for $100.
Clients for whom the work is merely a nuisance. “Just whip something up cheap.”
Clients who will drop you in a second to save another $12.
Clients who may not pay at all.
Clients who, even if they begin to grow, will move on to ‘better’ freelancers .
Clients who have burned through every other freelancer on the list.
Clients you don’t want.
Yes, when you absolutely need $327 by Thursday, do whatever it takes. No one will fault you.
But low-balling is only a band-aid. A crappy one at that. I’ve never seen it work for long. Ever.
Your pricing selects the clientele.
Whoa, I’ve never really been able to get my head around the whole idea of cutting prices to attract low-ballers.
What I do know is that it sends out the wrong signal to potentially good clients, at least in my field (translation): you’ve just revealed your pain threshold, and it becomes difficult — or even impossible — to ratchet things up to where they should be.
In fact, I’d far rather do a job for free — for example, to prove through work that the new client will *see*, my passion devoted to his/her/its cherished product/service/text, that I’m the person they never knew they needed but know now. Shows confidence and lack of desperation, which is usually a good vibe to get out there.
This approach definitely works with the type of client I target. I’m curious to hear about other freelance professions. One particularity of the work we do is that when clients buy a text translated into a language that’s not their own, they usually can’t really tell if it is fair, middling, good or excellent (or crap). There’s that leap of faith thing. In addition, a lot of translation clients have been burned big-time by haphazard suppliers, which can make them jittery.
So a small (but critically important) free job that demonstrates first-hand how you work, how pleasant you are, how you can make their baby shine — all of that sets them up to make you their first choice for the next real job. That’s my experience, anyway.
I’m not sure this would work if you started fiddling with reductions and such from the git-go.
Thanks for your thought-provoking post, Walt.
Amen to this, Walt. It can be hard to hold strong, but I can testify to your list above. It’s always the clients who get a $ break from me who will ask for the world, unreasonably so.
If I can add one other thought, too: Lowering your rates does a number on your self esteem as a writer. It really does. In agreement with Chris’s comment above, if it’s a friend, I’d rather give it away than take a lower rate. That way, I can say when I’ve given enough, and if they need more then they have to figure out how to pay me my rate or find someone else. If it’s a business connection, just don’t do it.
Thank you for writing this. You’ve said everything I keep telling every new freelancer I come across – whether they listen or not. Lol.
Having been a freelancer who charged low, I found that I got more value by doing pro bono work for non-profits. I made connections that led to paid work and got testimonials and honest feedback on my work.
Ciao Walt!
I thank you for this interesting post: a new impulse for consideration.
I couldn’t agree more with the all of you! Once again, I am living through the psychological and economical challenge belonging to every startup in “the freelancery”. In the 80s and 90s, I used to be a freelance translator over fifteen years and have always complied with these rule and believes. At present, after six years of working experience as an employee, I am getting back to my profession as a freelance translator in Germany. This time, it seems to be harder and take longer somehow. There have been remarkable chances in the working culture, approach and management to freelancing in my profession. Moreover, the pressure of the “down-market” is everywhere but particularly strong in my field. Quality and experience (mine are really not too bad!) seem to be of the utmost importance whenever the payment of due price is not involved in. Otherwise, other contingent features take over which seems to be more ascribable to exasperated subcontracting rather than to undeniable difficulties of the economy. On considering given contigencies, it is really hard to hold on.
Viel Spaß & Ciao!
Vincenza
I can only confirm what Ms. Durban said in the strongest terms. Better to give your best work away to a premium client worth a relationship than pimp yourself to the losers. When I began translating commercially over a decade ago, I based my pricing policies on those of an experienced but somewhat naive colleague who kindly explained the customs of the paid trade and shared clients with me. However, as I moved upmarket I found that even 10 to 20% differences in rates crossed some sort of threshold beyond which I suddenly received far more appreciation, fewer suggestions for “improvement” and… a lot more work. Higher charges significantly increased demand, something that is easy enough to understand when you consider for a moment what one might think if offered a new Maybach for §1000.
Nice try, but nothing that you wrote is true. It’s biased. There are all kinds of agencies out there. It IS unfortunate though that some of us have to accept low rates because we haven’t found anything better yet and not because we chose so. Not everybody has a parent or spouse as a sponsor.
Nice try, Maria Carolina, but am I the only one to find your comment, er, “biased”?
As I see it, Walt is giving all of his readers some ammo to break free of the “I have no choice/I must accept low rates” mindset.
Here you seem to say that implementing these suggestions is impossible without parents or spouses as sponsors. Why assume that? What about people who took the time and trouble to write up a business plan (not a bad idea) or build up a nestegg or buffer prior to jumping in, so they won’t have to slide down the slippery low-rate slope? Likewise, why assume that you have to work through a middleman (“agencies”)? Just wondering.
One of the things I’ve noticed (and tried to say in my comment above) is that it is virtually impossible to negotiate a steep rise in prices with an existing client, since your contact knows how low you’re prepared to go. You’ve tipped your hand. So if you start too low, realize it, and want to raise rates, you’ll probably to rebuild your client base in any case. That’s double or triple the work.
Absolutely. I can only agree with my esteemed colleagues. If you absolutely must have that $327 by Thursday then beg, borrow or steal – well maybe not steal
– but do whatever it takes without putting your professional reputation on the line. The damage you can do to your business in one such weak moment can take months, or longer, to undo.
Chris also makes an interesting point about the “leap of faith.” We are indeed selling ourselves and our integrity, and it’s my belief that clients get a quick sense of whether you’re competent or not without necessarily understanding the target or source language. Same as we notice right away if we’re dealing with a low-baller who is not ultimately concerned with the quality of the end product. So, deal with professionals, behave in a friendly and competent manner, don’t short sell yourself and all will be well!
No, Chris you are not the only one to object to Maria Carolina’s comment (I had managed to overlook the last 2 posts prior to my own comment, sorry).
In fact I strongly object to the notion that it’s impossible to charge proper rates unless you’re living with your parents, or a bored housewife looking for some pin money on the side. I have been supporting myself and my family with my translation business for 15 years now, and the lowest rate I have ever charged, even back then, is well above many of the dubious offers one hears about today. You always have a choice, assuming you can deliver good work. Whether or not you decide to go the direct client route, or work with agencies, or a mix of both – there are good clients in both arenas who are prepared to pay for quality.
I can certainly understand how it can be easy to fall into the trap of thinking that there’s no other way if you have already started working for low rates. But Walt’s reasons for avoiding the down-market segment are right on the mark. Maybe he’ll give some pointers on how to break out of that segment in a follow-up post – just an idea!
Tweet Parade (no. 37 Sep 2012) | gonzoblog.nl
[...] Using low rates to attract clients - Yes, when you absolutely need $327 by Thursday, do whatever it takes. No one will fault you. But low-balling is only a band-aid. A crappy one at that. I’ve never seen it work for long. Ever. Your pricing selects the clientele. 6 [...]
The last line sums it up: lowballing is a crappy strategy to get clients. I couldn’t agree more. In my experience, if I can’t raise my rates for client A, I will offer raised rates to client B. Most translation agencies want to work with translators (freelancers) that will agree to a “competitive” rate. By competitive they mean stable, unchangeable and low.
Let’s put some context around the rate discussion.
Walt’s last line above is: “Your pricing selects the clientele.” I would propose expanding that definition to read: “Your pricing selects the clientele if your product is worth the premium.”
That last part is often implied in these discussions and I think that’s a mistake. We need to state outright that your product needs to be worth the higher fee, which means you need to be better than everybody else.
I believe I’m the only one in this thread so far who has spent millions of dollars of my own money hiring and paying freelancers over a period of two decades. (If I’m wrong, please correct me!) I had my house mortgaged for 20 years against my ability to judge freelancers’ talents and determine whether their fees were in fact “worth it.”
I’m a huge believer in the wisdom of the market. The market is brutal right now for many translators and other freelancers and they are likely to dismiss out of hand advice to raise rates. Why? Because they consider themselves lucky to even be in business. To even be alive in a commercial sense. Because they’ve lost clients to lower-priced competition, or lost bids to lower-bidding peers, or their customers have gone out of business, or been bought out or simply collapsed.
There is enormous fear in the market right now because there is a lot of commercial death and destruction. It’s crucial that we acknowledge that, understand it, appreciate it, and confront it.
So let’s try this. You can raise rates when you offer a premium product. You can take a leap of faith when you’ve done the hard work on your product to warrant that leap.
Ask yourself as a consumer whether you would pay the higher price for your product and exactly why you would do that.
… Walt’s last line above is: “Your pricing selects the clientele.” I would propose expanding that definition to read: “Your pricing selects the clientele if your product is worth the premium.” …
… Whenever, in real point of fact, the end customer has the necessary information and/or experience and/or qualification to identify the premium product in the market and wants to pay the “fair” price for that … Outsourcers or agencies ought to be able to do that in any case. Let us consider the private/direct customer of a freelancer who needs a product/service now. He might be looking for and be ready to pay for quality. Do you really think that he is always able to do that? … In a perfect world, only.
Well, that really doesn’t make any sense, Kevin.
Let’s start with the fact that what you said would hold true for a declining line of business. That’s not the case with the translation industry. Agencies keep popping up, left and right, and the amount of words that need to be translated has been increasing steadily over the past few years.
Agencies do not charge the end-client any less, why should the translator reduce his/her prices?
I think that we’re all being dragged along the path of ever-increasing profit margins for the middle-man. Agencies sell a service that is not dependent on their own ability to deliver the translation. They depend on professionals who simply use the agency as a means to contact a direct client. Do you honestly believe that an agency has the realistic power to dictate every aspect of the translation industry?
Let’s say that agencies disappeared from the global market. Would translations stop? Would clients suddenly decide that they do not need to translate their new product, manual, label, etc?
No. Translations are “products” that need to be bought, regardless of the flow of the market.
Following the same line of reasoning, what happens if the agency decides the charge less for its services? That is is simply not something for the agency to decide. If the charge for a medical translation were 0.30$, could the agency bring that down to 0.20$, in order to better compete in the market? That depends on whether the person actually performing the service ( in our case, the translator and possible editor ) somehow decided to reduce his/her pricing by 33%. Does that sound like something a professional would do? If an agency decides to reduce the charge for a service that they are not actually providing, they must be ready to severely limit their margin of profit. Don’t expect translators to follow your lead and lose money, simply because you want to be more competitive. Do you want to reduce your prices? Start by limiting your earnings.
Furthermore, when it comes to quality, I believe that that’s something you( the outsourcer/agency ) need to evaluate before you choose to work with someone.
Quality is never guaranteed when dealing with a new collaborator. Lawyers charge an awful lot more than translators and yet people are willing to consult someone and still pay the first visit’s 200-300$. Why do you expect things to be different with translators? You can verify someone’s credentials, contact references and use whatever means necessary to ensure that you’ll get the quality you pay for. Would having translators reduce their prices or work for peanuts somehow make a difference to you? Would you simply feel better if the translator, who didn’t provide the perfect translation, cost you less?
… or market.