How do you know what a client expects to pay?

July 22, 2010 by Dean Rieck
Filed under: Ask Dean 

Ask copywriter Dean Rieck!Recently in a post where I talked about writing a freelancing book, I got an interesting question.

Stacy from gemcopywriting.com asked me about how to know what a client expects to pay on a project.

How do I get them to tell me what they expect to pay before I waste a lot of time on talking with people who aren’t realistic? I always worry that if I outright ask their budget, they think I’m asking just so I can charge the maximum amount.

Or can I just say something like, “My fees start at $XXX.” or “I typically charge $XXXX for project Y.”

Good question. And it’s one every freelancer faces.

Here’s how I answered her:

Stacy,

That’s always a big challenge. I usually send my information kit before talking with someone, so they’ll see my fees. That weeds out some people immediately. Then when I talk to them, I ask the budget. If they tell me, I know what I’m dealing with. If not, I just give them a quote and see what they think.

You should never waste a LOT of time talking with people. But you do have to spend enough time to qualify them. I think what you’re really saying is, you’re worried that they won’t want to pay what you ask. Well, if they aren’t, that’s not the client for you. Though there are ways to deal with objections, if your fees are too far away from their expectations, you won’t make a deal anyway. And that won’t be the sort of client you’ll want long-term.

For example, a guy called me recently who wanted a sales letter. He said he expected to pay (I kid you not) $55. My fee, even for a simple informational 1-page letter, STARTS at $500. I gave him some other options for reviewing his letter, etc. but in the end he wasn’t right for me.

Looking back at Stacy’s question, I think it deserves a little more attention. And my answer begs for clarification, because I suggested asking for the budget, and that’s not really the best approach. (That’s what happens when you toss off an answer quickly in a blog comment.)

Many (if not most) freelancers are shy when it comes to talking about money. There are many reasons for this.

Some freelancers just can’t get used to the idea that they’re in business, so they’re squeamish about money. Others don’t feel equal to the business people calling them, so they don’t feel “worthy” enough to lead the financial discussion.

Maybe the biggest issue is that freelancers have a hard time with rejection, so they fear that if they bring up the fee issue, the client will run away.

Let’s run through Stacy’s question point-by-point, because I think she’s bringing up some important ideas.

How do I get them to tell me what they expect to pay …

Naturally you want to know what someone’s expectations are. That’s part of smart negotiation. Since your fee is probably the biggest objection to hiring you, you have to deal with it.

For some freelancers, however, they allow the client’s expectations to control what they earn on a given project. They may want to earn $XX, but if the client expect to pay $X, that’s what they charge.

What a client expects to pay should never dictate your fee. If you fall into this trap, you will train your clients to set your rates. That’s like opening a grocery store and hanging a sign that says, “Pay whatever you want for the food you buy.”

That’s not a good way to run a business. And you will always earn less than you should.

… before I waste a lot of time on talking with people who aren’t realistic?

Every freelancer must deal with unrealistic prospects. I shared one example in my former answer where someone wanted to pay about a tenth of my minimum fee.

Some people have never worked with freelancers before. Some have worked with freelancers who charge ridiculously low fees. Either way, when they come to you, they’ll suffer from “sticker shock” when you give them a professional-level quote.

I’ll talk more about handling price objections in a future post. The point I’d like to make now is that you have two possibilities if you run into a price objection.

1. If your fee and the prospect’s expectations are close, you can generally overcome the objection.

2. If your fee and the prospect’s expectations are miles apart, you can almost never overcome the objection.

I always worry that if I outright ask their budget, they think I’m asking just so I can charge the maximum amount.

There are different ways to approach pricing. You can have a set fee that you charge everyone. Or you can have a sliding scale that takes into consideration the difficulty of the project, your schedule, the client’s ability to pay, and so on.

If you use the former strategy, then why worry about what someone expects to pay? Your fee is set. Whether they expect to pay more or less, you charge X amount and that’s it.

If you use the latter strategy, then what’s wrong with charging more if the client expects to pay more? That just means they value your services.

Or can I just say something like, “My fees start at $XXX.” or “I typically charge $XXXX for project Y.”

Either way would work. But the first is better because it establishes a minimum price without limiting the upper end. I use a price range on projects, from minimum to maximum. This allows me to establish a minimum fee, show the upper end, then in most cases provide an estimate somewhere in between. Clients like that.

So here’s the answer to Stacy’s question. If you want to know what a client expects to pay, you have to ask. Simple as that.

However, I recommend that you reveal your standard fees first, then ask if it’s in line with the prospect’s expectations. This lets you set the benchmark for the conversation instead of the client.

I might send my information kit before I talk to someone. Or I might say, “My fee range is typically $X to $XXX. For this particular project, I’d say $XX. Is that okay?” This should happen fairly early in the conversation, after you have a good idea about the work involved.

This isn’t always the best approach, but it helps you avoid wasting time with unrealistic prospects.

In future posts, I’ll talk more about qualifying prospects and how to handle price objections. There are some nifty tricks that work nearly every time. Stay tuned.

Related posts:

  1. Turn an angry client into a loyal client (with one word)

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Smart Comments

6 Comments on How do you know what a client expects to pay?

  1. Mike Klassen on Jul 22nd, 2010 12:17 pm
  2. Great topic, Dean.

    The “What’s your budget?” dance has driven me crazy as the most frequent answer I get is, “Well, we’re not quite sure yet. We’re just exploring right now to understand what things cost.” That may be true, but my feeling is often it’s not… they do have a sense of what they will pay, but they want me to blink first.

    One thing you can do at that point is ask them what they’ve paid for past marketing projects, even if they’re not exactly the same as what they’re hiring you for.

    If they hem and haw on that, then it could be a red flag for you.

    These days, I ask prospects for the life-time value of a good customer. They’re more willing to discuss that than a budget.

    When I know that number, I’m in a better position to know whether what they want me to do makes financial sense or whether I might suggest they consider something else.

    This is a really basic example, but let’s say the life-time value of a client for a consultant is $12,000 a year for 4 years. Your services are going to cost $5,000. How many clients need to be signed up from the marketing project to cover the $5,000? Just one, right?

    Again, that’s a really simple example. But what it does is to frame your price in the big picture and not just a $5,000 cost that is viewed as a separate entity.

    I do think many freelancers take the position of “follower” in discussions like this instead of “leader.” I know I’ve been guilty of that in the past.

    You timidly give a price and cross your fingers that it will be OK rather than educating the prospect, and helping them see the big picture and how your price fits into it.

  3. Dean Rieck on Jul 22nd, 2010 12:26 pm
  4. Mike,
    There’s more salesmanship to landing a client than most people realize. So there’s no one way to close a deal. This is making me think that I need to deal with this topic a little more on this blog because it’s one of those things none of us like to think about but all of us need to master.

  5. Sara on Jul 22nd, 2010 1:17 pm
  6. This is a tough one! I asked a potential client the other day and he said “It can’t be too much or my boss will say no.”

    And that’s all he would say…

    A few months back I listed my minimum project fee on all my services pages, which seemed to help. At least I don’t get as many calls for $3 article writing anymore.

    Thanks for a great post!
    -Sara

  7. D Bnonn Tennant on Jul 23rd, 2010 8:30 pm
  8. Great post Dean. I think the art of landing clients is one of the first things a freelance copywriter should seek to become an expert in. For one thing, copywriting is simply salesmanship in print…so if you can’t sell your own services, that’s gotta be a warning sign. For another thing, it’s kind of the key to running a successful business in the long term!

    I find it incredibly important to set expectations early. Like you, I make my services & rates available on my website, often send them to prospects when we first start talking. That way they don’t have much excuse to hum and har when I ask them for their budget.

    Still, a lot do hedge. However, although Mike describes this as “waiting for me to blink”, I don’t think that’s usually what’s going on. In fact, I think prospects are generally much less “aggressive” that way than freelancers give them credit for. When they hedge, it’s because they actually see you as the expert and are, in a funny kind of way, “looking up to you”. And if they haven’t worked with someone like you before, then they genuinely aren’t sure what a reasonable budget is. Even though they almost certainly have a solid idea of what they can conceivably spend, they don’t want to actually say it for fear of seeming foolish.

    Ironically, freelancers are often so unconfident themselves that they don’t see the prospect is looking to them for direction. They think he’s just trying to be cagey. I’ve found that simply playing the part of the expert that I am, and confidently stating a price, is highly effective. If the figure is about what they were expecting, they’ll happily accept. If it’s a bit higher, they’ll probably come back saying it’s more than they expected; in which case you can negotiate: either adding value that won’t cost you anything (maybe by throwing in a free report or similar), or removing value that will cost you (reducing the project’s scope). And if it’s way higher than they can pay, they’ll probably say so, and you know the project isn’t for you.

    Anyhoo, I’m looking forward to your further insights on this topic, as it’s an area I can certainly improve myself!

    Kind regards,
    Bnonn

  9. Dean Rieck on Jul 23rd, 2010 9:25 pm
  10. Bnonn,
    You’re right about confidence. Sometimes when I’m talking to a fellow freelancer about the business end of freelancing, what I really want to say is, “Just speak confidently and things will work out.” But that’s easier said than done.

  11. Stacy Ranta on Aug 6th, 2010 3:28 am
  12. Thanks for going into the question a bit more in depth, Dean. I somehow managed to miss this post until now.