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Raising Freelance Writing Rates – Demand Isn't Enough

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on November 19, 2009 in Freelance Writing Business
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freelance writing rates

How would you feel about having your freelance writing schedule booked weeks or months in advance? Do you wish you had the luxury to be more selective in the freelance writing jobs you take on, able to turn down anything that doesn't appeal to you?  Plenty of freelancers are already in that boat, myself included. It's a great place to be, but a reader brought up a good question a while back in a comment -- if your schedule is constantly full, doesn't that mean it's time to raise your rates?

The short answer is "no." Demand alone isn't enough of a reason to raise your rates. Today I want to talk about why, before you rush off to raise rates for 2010 just because you have adequate demand at your current rates.

Not All Work is Created Equal

unbalanced

Credit: alxm (stockxpert.com)

It's true that constant demand is one sign that it might be a good time to raise rates. But that doesn't mean it's always true. For example, the bulk of my work comes from regular clients who place relatively large orders every month. I have a booked schedule well into the New Year. This year I only took on about five new clients due to the existing commitments. I don't expect that to change in 2010. Yet I turn down multiple offers every single week (referring those buyers to colleagues).

Does that mean I should raise my rates with my other clients, or replace them with higher paying ones? No. Why? Because an influx of offers in no way means those working relationships would be equal to my existing client relationships. I have long-term contracts. There's no guarantee of that with a new client. I've found an amazing balance between great rates and stability rivaling that of a regular full-time job. Hypothetically I could drop client A (who orders $2000 worth of content a month) and replace them with client B (who will pay a bit more). But client B might not stick around beyond a month or two, meaning I'd then have to replace them again with someone new.


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Stability and long-term contracts are a huge factor you can't afford to ignore.

New Clients Equal More Work (and Sometimes Less Money Hourly)

You also have to look beyond your base rates. You can't think of it as "client A will pay me $450 for the project and client B will pay me $600 for the project, so I should go with the new client B." When it comes to freelance writing rates, you have to revert everything back to hourly levels.

If you've been working with client A for a year, chances are good that you're already intimately familiar with their business, products, or services. You probably know who their target market or target readers include, and you know how to tackle the project to appeal to those people. You might be able to turn that project around in 5 billable hours, meaning you'll earn $90 per hour.

With client B, you don't know any of that information up front. If you truly want to do your job well you'll have to invest more time into research. You'll review the client's website thoroughly. You'll look at other documentation they send you. You'll have phone or in-person consultations with the client. You'll research the target market / readers and how the competition successfully appeals to them. It might take you 9 hours overall with that additional work. Even at the higher per project rate, you would only be making around $67 per hour.

Unless you know up front that client B plans to be a long-term repeat client (meaning that initial time investment will pay off over time as their projects become faster to complete), the better business decision is to stick with client A. The lower rate is actually more pay per hour (and more hours to devote to other projects).

Changing Rates Sometimes Means Starting Over

Credit: Ivan Petrov (sxc.hu)

Credit: Ivan Petrov (sxc.hu)

Unfortunately, there's always the possibility that you're at the maximum rates your current target market will pay. Therefore, if you want to raise your rates, you'll have to change your target market. That means starting over. You'll need to tailor your services and your value proposition to an entirely new group of potential clients, re-think your marketing strategies, and revamp your network. Do you really want to do that?

If you're not happy with what you're earning (such as being stuck at content mill rates and wanting to double or triple them), then do it. You have to change your market to change your career path. But in a case like mine, when you're already earning a very comfortable hourly rate, overhauling your career targets (and all of the unpaid marketing and administrative time involved in doing that) doesn't make sense.

So no, demand isn't enough to signal that it's time to raise your rates. Hating your current work, feeling taken advantage of, and being pushed to the burnout point cranking out content just to make a livable hourly wage... those are reasons to raise rates (if you can offer the value to back it up).

That said, don't ignore the demand either. A sudden influx doesn't always mean something. But if that increased demand sticks around for six months or more with no signs of letting up, take it as a sign that it might be time to evaluate your overall situation as a freelance writer. Only that will tell you whether or not it's really time to increase your freelance writing fees. In the end what you should strive for is balance -- rates that allow you to pay your bills, set money aside for savings or investments or leisure activities, and still enjoy enough free time that you can pursue your own hobbies and projects or spend more time with friends and family.

Finding that balance might seem like a dream to some, but I can tell you it's absolutely attainable. As with most things freelancing, all it takes is a bit of business sense and planning.

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Jennifer Mattern is a professional blogger, freelance business writer, and indie author. She began writing for clients in 1999 and started her first blog in 2004.

She owns 3 Beat Media - a publishing and client services company which operates All Indie Writers as well as several other websites and blogs including The Busy Author's Guide and BizAmmo. Jenn comes from a background in online PR and social media consulting, having owned a small PR firm for several years before choosing to pursue a full-time writing and publishing career.

Jenn also writes fiction under multiple pen names in the areas of children's fiction, mysteries, and horror fiction. Jenn is an active member of the Horror Writers Association (HWA) and currently serves as the organization's Assistant Coordinator of Promotions and Social Media.


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15 Comments

  1. Jessie Fitzgerald November 19, 2009 Reply

    Jenn, very insightful. Glad you brought up the part about changing your rates could mean changing your path / starting over. In my fourth year I’m “starting over” because as an ebook writer charging about $0.35 per word, I’m not going to be writing any PLR content for Internet marketers. I’m working exclusively on authority ebooks for platform-building. That gives me the opportunity to charge based on value to clientele that can afford it. I end up targeted other serial entrepreneurs because they are capable of affording my rates. I was in a meeting yesterday and when I told my client that each hour of my time would cost him $200, he didn’t flinch. He knew the value was there. I don’t see another rate hike any time in the near future because I feel like I’ve found that right price point for myself and the budgets of my clients. Thanks Jenn!

  2. Wolfster November 19, 2009 Reply

    Thanks for discussing this topic and I will also come back to visit the comments from other posters because I’m still not sure how I feel about this topic and what the best approach should be. I really struggle with the idea f rates/whether I am charging the right amount/and could I or should I charge more?

    For myself, I have been leading towards another model, though. First, I take into consideration other factors than just the $. How much does the topic interest me? Can I use it as a sample or can I use the experience to get something else? I’ve taken things that I don’t like/am not interested in before, and for me, it = a much, much lower rate because I can’t focus and am not a happy camper. So it may take me 60 hours just because I’m not interested, even though it could be finished in 40 hours.

    If I am working insane hours (like I was over the first few months as a freelancer, although it was inconsistent – 60 hours for one week, 20 the next, 60 the next week), then I start to increase my rate. I only have ten months to use as a model, but month 6 through 10 was when I mainly took clients that paid a certain rate (turning away others) and that had interesting projects, the amount I earned per month increased dramatically, and the # of hours worked per week dropped. I also finally had time to work on things for my business (eg webpage), which would not have happened unless I followed this model.

    I am thinking of trying to raise my rates again next year, so I am at this exact point (Do I start over? How do I get/land those other clients?).

    At the moment, I am working on a project that doesn’t interest me … notice that I am reading a blog and posting rather than working. Augh!

  3. Wolfster November 19, 2009 Reply

    @ Jessie,

    $200 per hour? Wow, if you don’t mind sharing the strategies you used to increase your rate over time (or philosophy that you are using), that would be helpful. If not, that’s okay, too

  4. Jennifer Mattern November 19, 2009 Reply

    I won’t speak for Jessie, but mine usually fall anywhere in the $150-400 per hour range. It’s not so much about slowly increasing rates over time. It’s more about choosing the right target markets early on (despite what you’ll constantly hear elsewhere you do NOT have to start at the “bottom” and work your way up — people who do that usually target the wrong market and then have to change things up down the road). It’s also about landing those long-term regular gigs where you get to know the clients’ businesses intimately well. The more you work with them, the faster the work goes and the more valuable you are to the client. Your hourly rate naturally increases (and without quality suffering).

  5. Jessie Fitzgerald November 19, 2009 Reply

    Jenn is right on target.

    Wolfster, I have seen you here quite a bit and I empathize with your situation. I’ve had so much dabbling previously in freelance writing career but thanks to Jenn and Yolander Prinzel (FreelanceWriterville.com)I’ve been able to identify a marketable and enjoyable specialty for me.

    My suggestion for you is to truly analyze your abilities, interests, talents, education and experience to find a specialty that is strongly marketable for you. Myself, I’ve got a strong passion for being business, having started seven businesses. I’m also very pro paperless and green and savvy on the Web because I’ve grown up with it. I’m a big time networker. Everything came into play for me as an authority ebook ghostwriter.

    Once you find an extremely marketable specialty, then network your toosh off. Networking needs to be your primary marketing strategy for you to build a sustainable platform to the long-term success of your business.

    When you find this, it is just a matter of finding our your hourly and budget stats, accounting for not working all the time and then ADDING THE VALUE OF YOUR SERVICES INTO YOUR PRICE and then standing firm with this. Make sure your online portfolio stresses your USP of your extremely marketable platform and be a good networker.

    Your rates shall come to you then!

    Do continue to return to AFW, Wolfster, because you are definitely going to succeed as a freelance writing business owner if you take to heart and to action what you find on this blog.

  6. Jessie Fitzgerald November 19, 2009 Reply

    Oh, and as a side note, I started at $12 per page…until I got smart and realized that $105 was more realistic for all factors involved.

  7. Mitch November 22, 2009 Reply

    Man, I learn so much every time I read one of your posts. I have to say, though, that I actually had figured out this part of the pay thing when I started looking at the time it took to research certain things as opposed to writing other things I knew something about. I think I even mentioned something about it on the Digital Point forum.

    For instance, I created a website for one client and asked him for content. He just never came around, but luckily, I knew a big part of his business, so I just wrote it and shared it with him. Charged him for the writing time also, but he loved it, so it was all good.

    Of course, I wouldn’t be mad getting more of those in the pipeline.

  8. Jennifer Mattern November 22, 2009 Reply

    Mitch, out of curiosity, what’s your DP username? I often don’t connect posts / handles there with readers / comments here.

  9. Mitch November 22, 2009 Reply

    I go by The Writer :-)

  10. Jennifer Mattern November 22, 2009 Reply

    Have you gotten in trouble with me there yet? Can’t play favorites with AFW readers after all. ;) But while the handle sounds familiar, you don’t jump out at me as one of the typical troublemakers in the community. So that’s good to know. :)

  11. Mitch November 22, 2009 Reply

    No, if we’d gotten in trouble with each other, I probably wouldn’t be reading your blog. lol But we’ve shared conversation in some of the same posts every once in awhile.

  12. Yolander Prinzel
    Yolander Prinzel November 22, 2009 Reply

    Oh, I know The Writer. NOW he knows who Jenn Mattern is ;-P

  13. Mitch November 22, 2009 Reply

    And now I know the full name of Y.L. Prinzel also lol

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