How I answered when my client asked “will you lower your rates for us over time?”

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Plenty of stand-up comedians have had fun skewering the silliness of the “What’s your greatest weakness?” question that job interviewers often ask.

The two best comedic answers I’ve ever heard are, “I really struggle with attendance,” and, “For me the hardest part is remembering that the company’s money… is the company’s money.”

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Fortunately, the answer I gave in response to a prospective client’s tricky question about my copywriting rates wasn’t nearly as bad as those.

But it was bad.

And for a guy who’s been writing professionally for his entire adult life, including more than a decade as a freelance copywriter, my answer — or rather my lack of a decent one — was inexcusable.

Here’s hoping this short post will prepare you to answer a similar question, should you ever receive it — and to do so without rambling like a lunatic.

The prospect’s question that sent me babbling like an idiot: “Will you lower your rates for us over time?”

The initial phone conversation was going well — perfectly, in fact.

This tech CEO and I were really hitting it off. He had seen my work and liked it; he was comfortable with my project-based writing rates; and I found the software platform he’d built to be pretty badass.

The call was actually a lot of fun. All that was left was to end it — so he could go off and figure out what he wanted me to write first for his company.

But then he tossed out the following question, which I have to assume he found in left field, nowhere or the blue.

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

Robbie, obviously we’re going to be giving you a lot of writing work over time. Your rates are fine for now, but I’m wondering — as you get more familiar with our company, and writing this content gets easier for you, will you lower your rates? It seems like that would be fair, since you’ll have to put in less work on each new project after you’ve been writing for us for a while.

Let’s stop here.

Before I tell you what I said — after a good 30 seconds of ums and uhs and wells and hmmms — try to formulate your own answer. Imagine you were on that call with a prospective new client. What would you have said?

And I don’t mean only the yes or no part. That’s easy. (Unless you try doing it without using profanity.) I’m asking if you can — right now — formulate a cogent statement for the second part of your response, the why part.

Why would it not make sense — for either party, frankly — for you to lower your consulting rates for a client over time? (Again, no profanity.)

The answer I finally came up with (after some serious stumbling)

I couldn’t think of a decent answer. At least not right away. Honestly, in the moment I couldn’t even fully understand the question. It seemed so odd and illogical — hence all of my uhs, ums and dead air. (In my defense, I’m a much better writer than I am a speaker.)

So I fumbled around, admitting to the prospect, “You’re catching me off-balance here. In all of my years as a freelance writer, I’ve never had this question.” (Honesty is the best strategy in a moment like this — as it is in just about any situation.)

After some embarrassing stumbling, though, I hit on the most cogent response I could think of. Here’s what I finally said:

You’re right — over time I will get faster at completing writing projects for your company. And yes, it will also become easier for me to produce better-quality work for you with time, because I’ll be getting more familiar with your company, your messaging, your market and your audience. But all of this will make me more valuable to you, not less so.

Ultimately you’re paying me for great work, delivered on time — not for how difficult the work is for me. So if I do become more skilled with time at writing in your company’s voice, delivering stronger work, and doing so faster, then if anything my rates should go up over time, not down.

And the prospect agreed. I started working for his company right away — under the standard terms of my pricing sheet.

But had I not stumbled onto an answer that resonated with and satisfied that prospect, this business relationship — which has since proven valuable for both parties — could have ended before it began.

Or I could have committed to an arrangement that would have left me feeling underpaid and resentful. Or it could have left the client feeling overcharged and resentful.

Which is why I thought this anecdote could prove useful for any creative freelancer or consulting professional. It highlights some fundamental misconceptions many of the businesses that hire us have about the services we sell. It also highlights some aspects of our businesses, and the ways we deliver value, that we ourselves might not have fully thought through.

Here are some of the bigger-picture takeaways I gleaned from that prospect’s question.

Three important lessons this question can offer any freelancer or consultant

1. Most people who hire creative freelancers don’t fully understand what they’re buying or how to value it — so you’ll need to tell them.

Can you imagine saying to your doctor, “Doc, I’ve been coming to you for years. You have all of my medical records on file now, and you know me pretty well. These physicals are certainly easier for you today than they were in my initial visits. Shouldn’t my co-pay be going down?”

Or to Jerry Seinfeld: “Hey, Jerry, tonight’s performance will be… what, your 80th time doing this set on the road? It’s not like you’re working as hard as you were during those first stops on your tour, when you still had trouble remembering all of this new material. Can you charge us less for each ticket?”

But when it comes to buying a service, particularly a creative service like graphic design or writing, many businesses are unsure how to value the work. So they default to metrics that make sense to them — such as the level of difficulty of the work for the professional they’re hiring.

This actually makes sense, considering these companies they don’t know any better. If you’re a graphic artist and you dash off a brilliant icon set for a company in 45 minutes, and you nail it on your first try, it’s understandable that they might come to perceive that service as less valuable. After all, it was so easy for you.

So you need to be ready to articulate your value proposition to a confused or misguided prospect. You are not being paid to work really hard; nor are you being paid to struggle to get the assignment right. The client is paying you to deliver great work, on time, every time. That’s your answer.

2. A lot of people who hire freelancers think in terms of time put in — hours worked, days worked — because it’s familiar and easier to measure. So you’ll need an answer for that, too.

This isn’t an article about the merits of charging by the project versus hourly. But I will say this: As creative freelancers, we aren’t selling our time; we’re selling our talent and a final creative product that will meet or exceed our client’s expectations.

For someone with a mindset of paying for hours worked, like the tech CEO who asked me about lowering my rates over time, it can seem logical to expect that as your freelancers put in fewer hours, they should expect to earn less.

But just as the notion that creatives and other consultants are paid based on a project’s level of difficulty is false, so too is the idea that we’re paid according to how long a project takes us.

If you want to charge on a project basis for your work, and you’re looking for a persuasive and logically bulletproof answer to a prospect’s question as to why you won’t charge by the hour, your best bet is to explain that as soon as both parties agree on what the final output is worth, you’re both perfectly aligned in your interests.

In other words, you both have an interest in arriving at a product that pleases the client in the shortest possible time frame.

If you’re charging by the hour, on the other hand, you and the client are always working under opposing interests — you wanting the project to take longer, the client wanting it done in as few hours as possible.

Even worse, the client’s own interests are totally in conflict — because they want the highest-quality work you can deliver, but at the same time they have a financial interest in your rushing to bang it out as soon as you can.

If you can persuasively articulate these inherent conflicts, and at the same time articulate your true value proposition as a creative freelancer — delivering outstanding work, reliably, and on time — you’ll be in a much better position than I was to answer the occasional out-of-nowhere billing question from a prospective client, and earn that client’s business.

Related reading: Should you bill your freelance clients for meeting time and other work?

3. Some people just want to negotiate — which is why you need to be prepared with an answer, whatever that answer is.

One possible reason for that strange billing question, which I thought of only later, was simply that this client likes to negotiate. Perhaps he fully understood that a freelance creative would have no reason ever to charge less for his services to a client over time, but he thought he’d throw the question out there anyway, just to see if he could get a break on that creative’s pricing.

As a freelance professional of any type, you need to be prepared for prospects looking for a price break. I’m not talking about bargain shoppers. Politely turn those people down as quickly as you can — they will never be worth your effort or talent. But for the legitimate businesses that can afford your services but just want to see if you have wiggle room in your pricing, you’ll need a strategy.

If you are willing to drop your prices by a certain percentage for larger clients, or during quieter times, fine. But be prepared with that percentage, your reasoning behind it, and a firm statement as to what the boundaries are of your discount. You don’t ever want to find yourself agreeing to something you’ll regret over a long-term relationship, just because you were caught off guard by the price-break question.

And if you’re not willing to drop your prices under any circumstances, you’ll need a well-thought-out and logical explanation for that as well.

Remember, some people just like negotiating, to see what they can get. In many cases these people — particularly when they’re working for a company and hiring professional services — will be perfectly willing to pay your rates. So if you’re truly prepared to lose the prospect rather than charge them less, stick to your guns.

Have you had similarly odd client requests that served as great learning experiences? please share them!

Episodes like these are great learning opportunities — which we need if we hope to grow our businesses, and to grow as individuals.

When I realized in that phone conversation that there was a question about my copy-writing business that I flat-out could not answer, it was a bit exhilarating. It meant that even after a decade-plus as a freelance writer, there were still some fundamental things about my own business that even I didn’t fully understand.

In my case, I hadn’t fully thought through the true value proposition of the writing services I offer to businesses — or how to persuasively articulate that value proposition.

Have you had similar experiences with clients or prospects, which forced you to re-examine and ultimately learn something new about your business? If you do, I encourage you to share them in the comments. Let’s learn from each other!

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About Robbie Hyman

Robbie Hyman has been a freelance copywriter for more than a decade, writing for startups and multibillion-dollar businesses. He is also co-founder of MoneySavvyTeen, an online course that teaches smart money habits to young people. Get to know him at robbiehyman.com.

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Comments

  1. Thanks for the functional examples, those always help!

    It can be tricky to help potential client value our knowledge.

  2. Brilliant – love your response! And I also like that you were honest to begin with. I’d find it very difficult to answer a question like that off the bat, and can totally see myself caving in and saying something like ‘Potentially but we can discuss that at a later point’, leaving that fun conversation for future me, like I usually do.
    So it’s great to have a brainstorm about these questions in advance! Thanks for sharing 🙂

    Anna
    http://www.byrosanna.co.uk

  3. My example isn’t about some of the heated discussion’s I’ve had about charging more when the scope changes on a graphic design project or how I mark-up printing. But rather an incident with my VW Beetle. Envision this, a young woman away at college, living in a rented room 2 blocks from campus. I’m trying to start up my bug to no avail. Sounds like the battery to me so I raise the back seat to stare at the battery, hoping that will solve the problem. But guess what? There’s a service station two Bungalow’s down and across the street. I’m lucky enough to get a machanic to walk over and check it out. I try to start the car, same result, I walk around to see him touch a wire on the battery terminal. Boom it starts up. Fantastic what do I owe you, secretly hoping he says, for a struggling young college student it’s on me. Yeah, wishful thinking, he says, “twenty dollars.” What? That could be several meals or art supplies. My reply? “you touched a wire?” He rebuked, and I’ll never forget this unarguable line, “it’s not what you do it’s what you know.” So I was left to ask, “will you take a check?”

  4. I recently had to back out of a project that I committed to, because they tried negotiating with me and in the spur of the moment I agreed to take on a logo and website for WAY less than what I knew it was worth. It was during a slow period so I was a little more desperate for work. I ended up backing out mid-project and issuing the client a refund for their deposit. This client was also difficult to work with so that did play a factor, but the fact that I wasn’t prepared when they tried negotiating really made this project “doomed from the start” because once I dove in I immediately felt annoyed and resentful when the project turned into much more work than I was being paid for. Looking back this wasn’t the client’s fault, it was my responsibility to ensure we were on the same page. This was the first time that I have ever fired a client, and it felt like such a relief and burden off my shoulders, I didn’t miss the money at all. It also served as a lesson.

    • I had a very similar experience with my VERY first client. I thought it would be great to get the experience with creating their website so I was charging very little. As we progressed, the difficulty of getting their design together and what they were asking me to do, became more complicated. We just didn’t’ see eye-to-eye. Finally, I told them, “I think you want to hire a developer, not a designer.” and I fired my client. Relief. Burden lifted. Never have missed the money, nor regretted the decision.

  5. This article had SO much more great content in it than I expected based on the title. Thank you for so much seriously great advice that I plan to put into effect immediately!

  6. THIS IS AWESOME! That’s all.

    • What I have sometimes done is underpriced myself by offering a “volume discount” as if my time and life energy are a renewable resource- – which they are not! So this is great advice.
      Having said that, if a client is willing to commit to an ongoing retainer, i do give them a better deal than I would for one-off projects, to reward them for their loyalty and for making my life easier.

  7. Love this article – it gives great insight and applicable solutions to this tough question! Now I know better how to answer without being caught off-guard, should I come face to face with clients that want to negotiate lowering costs for long-term work. Thanks for this!

  8. I can’t even tell you how helpful this article is to me as I start to really think about the value of my work and consider switching from hourly to project billing. Thank you!

  9. Utter nonsense of a response.

    What the ceo is asking, which for some reason he didnt have the balls to state to your face is this: “will you reduce your rates with the understanding that i will commit to sending more work your way in the future.”

    Completely legit question.

    • Robbie Hyman says:

      It’s a fair question, perhaps, for a product, a widget — something that easily scales.

      In that case the manufacturer or owner could just do some quick math and determine that, yes, we could give this buyer a bulk discount at the rate he’s asking for and still enjoy a profit. (Or no, we couldn’t.)

      But with a highly specialized service? One that you knew you were hiring a single person to do? One that doesn’t scale?

      Would you want your defense lawyer knowing he or she would be getting smaller and smaller payments from you as your trial progressed?

      Why in the world would an individual freelancer want to commit to giving away the limited time they have for a guaranteed diminishing amount of money?

      I completely agree with you that volume discounts make sense for things. But not for people’s time and talent, unless those people assume that they have few options.

  10. Manpreet Kaur says:

    Absolutely loved it

  11. Very valuable advice and a fresh take on the subject otherwise so polarized!

  12. You haven’t lived until you’ve bargained with an Asian business, usually Chinese or Indian. Their powerful business logic goes like this – “I understand that the rate I want means you’re working at a loss, but give it to me for all perpetuity and I will give you my next 5 projects”.

  13. Great and helpful insight! I have been there loads of times, specially in a place like the Riviera Maya, Mexico that everyone wants cheap and good quality stuff for the same combo. What I learned from the past years is that if a client wants you, he will negotiate no matter what, you just have to be able to handle that negotiation in the best terms like you explained it in your call.
    And in quite times sometimes you have to drop your price just to get some work to pay the bills, i think that we are always bouncing between those situations until you get a name in the scene that’s when things change and people can stick to your rules…. Art is Resistance!

  14. Brillaint and so true! I’m a graphic designer so it all made perfect sense to me. I’ve had people ask me if I print my design on smaller paper will it be cheaper… To which I replied that they weren’t buying the paper from me but my ‘expertise and skill’. Another classic line to get a job cheaper is “it’s only a quick job, just a simple logo”. Frustratingly, sometimes one’s desire to please and worry about when the next job is coming can leave creatives doubting what they are worth and I’ve definitely struggled with that from time to time. Great advice, needed that today so thank you 😀

    • Robbie Hyman says:

      Thanks, Samantha. Glad this helped. And I think you’re right that a lot of us creatives are people pleasers — which sometimes leads us to let down the business side of ourselves and get talked into giving away our services and talent for less than we know they’re worth.

      That’s a great insight. Thanks for pointing it out.

  15. It’s not about the person or company not valuing you as an asset. I feel it’s more like a shrewd tactic by him. He already values you since he see’s potential work by you.

    In his mind he’s thinking how to maximize value; By making you cheaper to afford. Your answer is a perfect response to this in terms of the issue. Bravo!

  16. Had a bed and breakfast place want photos done to sell their business. gave them a price and explained what i would do and that i have 1 quality, the best. they turned me down and went for someone 1 fourth the price. the turn over went down (i have a number of ways of knowing this). Mean while another Bed and breakfast asked me to do the same thing, they did not know I had been asked by the other one and i did not know they were in direct competition (same area/client base) as the other. They were happy to pay and business increased with comments about the photos. when B&B 1 asked B&B 2 who did their photos (at a function) because B&B 1 felt their photos were not working as hoped, both got a shock to realise they had both asked me and B&B 2 later mentioned to me he was glade he went with me.

  17. great article! thank you!:)