Blog to support the book "Creatively Self-Employed: How Writers and Artists Deal with Career Ups and Downs" by Kristen Fischer

Friday, May 09, 2008

When One Rate Does Not Fit All: Negotiating With Clients that Want All-in-One Fees

I had a client meeting this morning. This means I tossed on my best khakis, grabbed my portfolio and darted out the door feeling the rush of new business possibilities. Having already spoken to this potential client on the phone, I knew it wouldn’t be an easy sell. He had a tall order of information he wanted me to bring along. But I knew I’d be all right—I spent the night before updating my portfolio and working on rates for him.
Rates. I knew that would be the kicker.

While this new client will probably be a wonderful one, I did struggle to devise a set pricing scale for him. Why? Because he wanted a set rate for projects. Meaning one lump sum for website content. Another for brochures. One fee for a press release. And so on. Although my rates don’t vary too much, I usually give clients who want ongoing work a rate range, which gives me some flexibility in my pricing. Not this guy—he wanted one-rate fees for different projects.

The problem with this, especially as a copywriter, is that every project varies. For example, there are large brochures, not just 8.5” by 11” “slim jims.” Websites can be five pages—and they can be 25 pages, too. Advertorials can be tiny, or they can be a full-page spread in the newspaper. Some clients will give you tons of background information, while others can only mutter, “I need a press release” and leave you to invent the rest.

How in the world are creatives supposed to offer one-rate project fees when each task differs? I gave him some base rates and began to explain why those wouldn’t be set in stone—and would instead have to be modified on a case-by-case basis. I used a few techniques to ensure that he was comfortable with that, and I would like to share those with you!

Explain the variables. In my case, I had to tell the client that while I could give him set rates, they could vary. I was honest and upfront, giving him an example of a project that may require a special rate. For me, anytime I have to travel to meet the client and sit through meetings, I’m charging extra for it or building it into my rate. Some clients are great at giving you background information and even competitor’s materials to show you what they like and don’t like about them. This offers a wonderful reference point for creatives to help pinpoint what the client wants. If one of my new client’s customers doesn’t offer background material, doesn’t want to discuss the message he or she wants, or wants me to sit through their meetings to get it, the one-rate fee won’t apply. It can require extra work on my part, and I want to be paid justly.
I told this client that I understand he needs to make a profit and so do I; so while I could offer a rate schedule, those rates may increase depending on the project. Then I topped it off with, “I’m sure you know how different clients can be, so it’s not always possible for me to stick with one rate. While the rates I’ve given you are a great reference point, they can vary depending on the project.”

Keep communication open. This is key to getting your clients to understand the variables: be open. In my case, I let the client know that while the set fees I gave him may not always work, I would let him know in advance what I guesstimated the project to come out to. For me, I generally give each client a maximum estimate, which I don’t go over. I cover my butt really well, so I can usually come ahead below that estimate. This doesn’t always work with project fees, but if a client retains me hourly and I tell him or her that the project will take 20 hours and I come in at 15, I try to be fair and honest and only charge them for the time spent. I let them know it, too.

By letting your client know that should rates increase you will let them know before the project starts or even update them at different milestones throughout the initiative, you can pretty much guarantee that the client will feel like you’re being fair and honest. (This is the exact kind of integrity that builds great business!)

Use your discretion. This is where you have to know your business as well. If you can set up a consultation with someone to help gauge how many hours a project will take, you can feel it out better. If you’re really having a difficult time figuring out how much money to request so you can still turn a profit, ask a colleague. Use all of your past experience to effectively gauge your time consumption. Then take a risk. You can go the extra mile by not charging mounds extra at the last minute if you go over one time. Don’t expect the client to happily hand over a few extra hundreds or thousands—they usually like to know how much things will cost and they don’t want to pay a dime over it. This is why you should never set a price you’re not pleased with, and why you should always get everything in writing.

In this case, I’d be doing some ongoing work for the client, which is why he wanted a set rate for each project. Your best bet is to cover your butt enough, but be prepared to take a risk if you can’t adequately estimate your time. If you’re comfortable with starting out at one rate but find it takes you more time to complete a task than first thought, let the client know that you’ll start off on a trial period sticking to your initial rate. Experienced freelancers will have an easier time figuring out their timetables. In my case, the writing isn’t what takes so long; the “figuring out what the heck the client wants” and then working with them to revise it is where hours can get tricky. Whether you bill on a project scale or hourly fee, definitely consider the hours necessary to turn a nice profit on every project. Gather information before the project starts to help craft your estimate.

Spell out one-rate packages. If you do business by having set rates (which is perfectly okay), be sure to state exactly what that rate includes. For example, I can give a client a rate for a brochure and make it uber-specific by saying that includes up to so many words and revision rounds in the price. I can also go a step further by charging an additional fee to meet with the client and add in a research fee if they don’t offer background material should the project require a little digging. There are a bunch of customized ways that you can still use one-rate packages—just make sure to be clear about the stipulations.

For example, if you offer logo design services at $2,000 per graphic, let the client know how many samples and revisions that will include and make them aware that if they go over the limit, they can be paying hourly.

Be fair. Hey, I realize that most freelancers aren’t trying to rip off clients by charging over-the-top rates. You have to help your client see that by letting them know details ahead of time, they won’t get any surprises along the way. For me, telling my client that if we worked hourly on something I would give him that maximum figure, he knew I wasn’t trying to pull a fast one on him. By the end of our meeting, he understood that we’d have to work on things project by project—the rates were simply a reference point.

At the end of the day, all you can do is communicate honestly and be ready to answer questions about why all project fees can’t be the same. Let each client know that you are open to work out pricing that enables them to boost their business and turn a profit, but you’re simply looking to do the same, too.

Kristen Fischer is an author and copywriter living at the Jersey Shore. For more information on her latest book, Ramen Noodles, Rent and Resumes: An After-College Guide to Life, visit www.ramenrentresumes.com.

link | posted by Kristen at 4:47 PM |

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Blogger Swirly commented at 8:23 PM~  

Such great advice...so many gifts you give to the creative world!!

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