It’s a pretty common phrase around the freelancing world—“charge what you’re worth.”
But I think it’s doing more harm than good.
In fact, I think it could be completely killing or holding back some freelancers. I know you mean well. But here’s why I think “charge what you’re worth” is pretty terrible advice most of the time.
What’s the main scenario under which most of us give this the advice to “charge what you’re worth” (yes, I’m guilty too):
A new freelancer asks how much they should charge for something: $50 for business card design? $500 for a website?
So we respond with our emotions:
“charge what you’re worth!”
But let’s take a moment and think through what you’re actually saying when you tell a fellow freelancer to “charge what you’re worth.”
A new freelancer asks how much they should charge
Here’s a scenario we see all the time in our mastermind group: someone asks you how much they should charge for any given service.
You smirk at them with years of freelancing wisdom behind your eyes (sense the sarcasm) and respond with something like:
“Fifty dollars!? You’re not going to even make any money on that gig after client revisions, monthly overhead, and taxes! Charge what you’re worth!”
If you haven’t experienced that before, here’s a real conversation from our free mastermind group on Facebook.
What do you charge for a logo? I am a web designer who doesn’t usually do logos but lately I have a lot of people asking for them. And now I’m pretty good at them. So I’m trying to price right.
Guys, don’t be afraid to charge what you’re worth. The hesitation of doing so and underpricing yourself is the reason we need to drag new clients through the education process every time. It’s exhausting. If we all charged $1,000’s of dollars as we rightfully should this problem would go eventually go away.
There’s one person’s opinion: if we all charged thousands of dollars for our work—in this case logo design—then cheapskate clients would just start paying the higher prices.
But a few of us disagree.
Here’s Kristin’s response:
That’s like saying someone shouldn’t even attempt a 5K unless they’ve won a triathalon. Everyone starts somewhere.
What if everyone’s not worth thousands of dollars?
I appreciate the sentiment, but isn’t that like saying if all cars cost $50,000, people would just pay the price for it? We wouldn’t. We’d ride bikes, take the bus, walk or figure out a way to sell a cheaper car to everyone else who doesn’t want a $50K car.
I know, I’m over-simplifying.
But sometimes I worry we oversimplify the problem by just telling people to “charge what you’re worth”—maybe they are.
Maybe someone’s logo really is only worth $50.
I also love how Colleen put it:
It really depends on you as a designer and what your process is and how much experience you have.
So we’ve identified the biggest problem in telling people to charge what they’re worth…maybe they are.
The biggest problem: Maybe they ARE charging what they’re worth.
Just because you wouldn’t charge that much for the time, effort, and expertise you bring to the table on a project doesn’t mean they shouldn’t.
What if they don’t have a portfolio? What if this is their first gig ever? Or what if they simply don’t need the kind of profit margins you do to make their business a success (they live somewhere cheaper than you, they aren’t married and you are, etc.).
Or maybe you’re worried about them taking your clients? If someone’s asking for such a low price (by your standards), you didn’t want that client anyway. It’s the same reason you shouldn’t care that robots are designing logos for super cheap.
The fact is there are always going to be clients who want the $5 version (which is why Fiverr is a massive business now). There will always be clients who want the $50 version. And there will always be clients who want the $5,000 version.
Telling a new designer (who may only bring $50 worth of value in the beginning) to charge $5,000 is deadly. [Tweet “Telling a freelancer who only brings their client $50 in value to charge $5,000 is deadly.”]
Can you imagine? I was 17 when I designed my first real logo for a client. It was awful. I did zero research. I knew nothing.
I probably shouldn’t have even charged them $50. But I learned a ton doing it. And I wouldn’t trade that experience for the world. It allowed me to springboard into $500 logos and beyond.
But if I had waited until I felt like I could charge someone $5,000 for a logo, I never would have learned or progressed as a freelancer.
Here’s the rest of my response in the mastermind:
The question becomes: how does a brand-new designer get to the level where they can charge what OTHERS deem as a worthy number?
In many ways, I’d almost rather new freelancer charge dirt-cheap rates in order to learn, gain a client base, and build a portfolio.
It’s one of the biggest chicken-and-egg problems we hear about here at Millo: how do I get my first clients when I don’t have a portfolio?
[Tweet “Taking a hit on income early on can build your portfolio and help you get better clients later.”]Taking a bit of a hit on income on those first few projects can be really helpful in building your portfolio and may be worth the opportunity cost since it will likely help you land future projects.
Of course, you have to be smart about it.
I did it wrong
Here’s one example of a way I was not smart about it early on. I had a potential client reach out and ask for some work and I offered to do it for dirt cheap because I needed the portfolio boost and he had tons of connections in the local business scene.
So I did the work for extremely cheap. He loved the work and praised me up and down for it.
A couple months later, when he needed some more work done, he came to me.
I quoted him at my real rates and he politely declined.
I think he was a bit shocked.
And it was 100% my fault. I gave him a discount on the early work, but didn’t tell him what my actual rates were—just that he was getting a deal.
So when he came back, he wasn’t prepared for the full price cost of the project and got scared away.
So be strategic about cutting your rates early on.
Your advice is killing people
So what does the freelancer do that hears someone like you tell them to charge what they’re worth?
They increase their price.
Not because they have any more experience. Not because they bring any more value to their client. No, they increase their prices because they’re trying to follow very vague advice: “charge what you’re worth.”
And then no one will hire them.
Because the clients that want Cadillac-level work, won’t hire a new freelancer. And clients that want Volvo-level work won’t pay Cadillac prices.
So they get discouraged and, often times, quit.
What you’re really saying when you say “charge what you’re worth”
The problem is this: what you’re really saying when you tell people to charge what they’re worth is
Charge what I’m worth.
But they’re just not in the same place as you.
And who are you to tell them how much they should or shouldn’t be charging?
You don’t know their situation. You don’t know how badly they need this client. Or how badly they need new pieces for their portfolio. Or how much they desperately just want to make any money freelancing.
They aren’t you.
So that advice ends up falling flat.
We’d be better off to ask important questions like: why do you feel like that’s a good price? How badly do you need this client? What’s your strategic thinking behind low-balling this client on price?
It takes more work, but it yields more success.
You’ll see, most times when someone asks a question in the mastermind, I follow it up with those kinds of questions.
Because every business is different.
Hedging the haters
Before some of you come running with your pitchforks: please don’t misunderstand me.
I want freelancers to succeed. I want freelancers to charge what they are genuinely worth. I want the world of freelancing to grow and thrive.
But the knee-jerk reaction to tell someone to “charge what you’re worth” doesn’t always cut it.
It’s time we focus on a better response. A more tailored, compassionate, understanding, well-thought-out response.
When we do that, we all win together.
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