Charge more for your services using these two methods

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When I met my wife 9 years ago, the car she drove kept breaking down.

It wasn’t a cheap car either, it was an early 2000’s Audi A4 but since her car wasn’t new it wasn’t under warranty. We would drive it for what seemed like just a few months, the check engine light would come on, and it was back to the repair shop for another $800-$1,000 bill. 

I remember the strong feeling of hostility I felt toward that check engine light—feeling like it was some kind of conspiracy the car makers devised to make car owners shell out their hard-earned cash on repairs that never seemed to fix the problem. 

It turns out the car was just a lemon. 

Sidenote: Once you finish, read how 4 freelancers built recurring revenue models that changed their business. You'll love it.

Finally, after getting tired of this routine, we sold it and decided to lease a car. 

The lease was under warranty and we didn’t have to worry about a big unexpected bill every now and then. We had consistent monthly payments we could afford and budget for. 

The interesting thing is, that lease was more expensive than the Audi ever was, but the pricing model made it seem much more reasonable—pay a bit each month rather than big chunks at unexpected times throughout the year.

In the end, we were happy to pay more to not have the ups and downs of the Audi. 

You'll also enjoy this episode of our new podcast...

This shows how your pricing terms—the how and when you get paid—can effect a buyer’s decision making.

Below are two ways you can work this into your freelance business.

1. Offer a payment plan

Some clients can’t/won’t pay big lumps of money. 

It’s too risky to them. They’ll be wondering; what if you disappear with their money? What if their business drops off and their cash flow dries up? Giving this big chunk of money to you is risky.

But, offer them a payment plan and they might be happy to work with you. They’ll even pay more to do so. 

I once had a client that was giving resistance on a $10,000 project happily agree to a 12-month payment plan worth nearly 50% more—once a few extra deliverables were added to the scope of work—simply because the payment plan was less risky to them. 

Getting paid in monthly installments—while more risky to you—can help close deals at higher prices.

(You might have heard me talk about getting paid 100% upfront before starting any of the work. I do love doing that, but that’s just one of the many different ways you can structure your terms. Instead of sticking to one way of doing things, I like to offer options to my client and let them pick the way they feel is best to pay for a project.)

2. Offer a satisfaction guarantee

In addition to the easier car payment schedule, my wife and I were paying for the peace of mind of having a warranty in place in case anything broke. (The car was also just simply more reliable. So in reality, we could have bought the car without a warranty and been fine, but that warranty definitely made a difference in our decision making.) 

You can do something similar in your business by offering a satisfaction guarantee. I first heard of this via Blair Enns, who makes a good argument for offering guarantees.

Offering a guarantee on your work is not something most freelancers are willing to do and for good reason: it’s difficult to guarantee the result of the work if other people are responsible for, and play a part in, making that end result a reality. So instead of guaranteeing the result of the work, you guarantee the client’s decision for hiring you. 

So for example, I once gave a 30-day guaranty on a $20,000+ project that if the client wasn’t happy with the service they were receiving they could ask for all of their money back within the first 30 days of starting the project.  

Doing that gave some assurance that if they felt they had made the wrong decision, they could walk away from the deal.

I gulped pretty hard when I decided to have my lawyer include that guarantee in the contract, but I’m convinced it made a difference in getting the client to go ahead with the project.

(DISCLAIMER: I am not a lawyer—seek the advice of a legal professional when including these terms in your contract to make sure you do it right.)

And since almost nobody in the design field does this, you’ll also differentiate yourself from the masses.

Offering a satisfaction guarantee or a payment plan certainly means you are taking on more risk, and you run through the same objections your client had—but in reverse: What if they disappear without paying what they owe you? What if your business drops off and your cash flow dries up while they slowly pay you? 

That’s the risk you run by offering these terms. The upside is that you get to charge more for taking on that risk.

Experiment

Thinking about offering a payment plan, but 12 months seems too long and risky for you? Offer a plan over 6 months. If the 30-day satisfaction guarantee scares you, offer a 21-day or 14-day guarantee.

You can play with different lengths of time until you find something that works best for you and your client.

Experiment with it—you are only bound by what you think is conventional but your client may be open to more unique payment scenarios than you think. Sometimes you just have to offer it to them and see what they say.

Are you going to give it a try? Let me know in the comments section.

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About Ian Vadas

Ian Vadas is a designer and the author of Work With Clients You Love. Get the eBook to learn how to select clients that pay well, treat you with respect and allow you to do your best work.

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Comments

  1. I’ve had success with a “payment plan” especially with start-ups that are on a tight budget. I get paid based on the value of the work, and they don’t feel the pinch as much.

    • That’s awesome Jeff. I think it can help close more deals with certain types of clients.

      Some feel comfortable paying a large deposit upfront and others are ok with paying more overall to have smaller monthly payments.

  2. I agree with this type of agreement but to a point. I do not see offering a guarantee where the client gets all their money back. I will agree to reimburse them up to the point where I at least recoup any costs I incur or time investment I have made up until they back out. It is only fair that a freelancer ensure they are not working for nothing. There is still risk but it is unrealistic to think that a creative project should be able to get a 100% refund. Especially given most people dont see value in a creative work in the first place.

    • If you put a time limit on the the guarantee, it will prevent that from happening.

      So if you project it to be a 4 month project, you offer a 30 day satisfaction guarantee.

      It’s not a guarantee on the entire project. It’s just to ensure they feel they can back out if they hate working with you within the time-frame where that would become obvious.

      For that risk you take, you also need to factor that into your price.

      Could you add 15% to every project you offer a 30 day guarantee on?

      You’d come out ahead over the span of ten projects, even if one does ask for a refund.

  3. Hi,
    I was about to send a quotation to a client.
    but after reading your article I gave it a try.

    Let’s hope it works.

  4. Satisfaction guarantee is very risky. What if the client just changes their decision? It happened to me that after 2 months into the project, the client refused to pay me and just stopped responding. I got to know from a common source that his board decided that the project was very expensive and they decided to give it to somebody else.

    In the same way the whole work will be wasted.

    • That’s a good point, Gaurav. You should always make sure you are talking to the ultimate decision maker to minimize the chance of having the rug pulled out from underneath you.

      Certainly, you need to be selective of who you offer this to.

  5. After being in business for almost 10 years, I have decided it is time to give up. My business has encountered all the same problems yours has. Although the idea of giving up was at first painful, I am glad I have made that decision. Good Luck to you.

  6. Stephgraphic says:

    Good idea for the monthly payment but the 30 days guaranteed is really too risky. I can’t be working for nothing for a month, I think a part of it might be guaranteed but not 100%, since what we sell in a service and not a products,. Some time has already been invested and can not be retrieved.

    • I get the hesitation. It definitely come with added risk.

      But for the right client, it also shows you are committed and are willing to put some skin in the game along with them.

      For doing that, it comes with an added cost