Every freelance guru, it seems, tells you the KEY to negotiating a price with a potential client is to begin with this one question:
“What’s your budget?”
What you charge a 100-employee corporation, they say, should be different than what you charge a one-man shop.
Here’s why I think that’s a load of BS.
Reason #1: It Can Be Unethical
If you’re only asking what their budget is so you can squeeze out as much money out of them as possible, that’s unethical.
I completely agree that pricing with freelance services is different than pricing with products because every freelance project is unique. Writing product descriptions for a coffee shop will be very different from writing product manuals for an accounting software company. Building a custom site for an ecommerce outdoors company will be different from customizing a WordPress theme for a fashion blogger.
However, if the answer to “What’s your budget?” is the ONLY or major factor in how you price your freelance services, that tells me two things:
- You don’t know the value of your services.
- You’re trying to squeeze out as much money as possible from the client.
Reason #2: It Encourages the Client to Focus on Money, Rather Than Value
I believe in providing VALUE to my clients—not just getting as much money as possible from them.
That’s not to say that you won’t charge different clients different prices—again it just depends on the work. What I’m saying is their business size and ability to pay should NOT be the only factor you use to send a proposal.
Now, many proponents of the “What’s your budget?” approach assert that the question is an innocent way of finding out how they can work with their client’s budget. Again, I think there are other ways to do that.
You can be flexible with my pricing without first asking for their budget. For example, if you know it’s not even worth it to start a copywriting project that’s less than $800, then tell them that. (This is known as a “project minimum.”) If they come back and say, “Well, we can’t afford more than $650 for this project” then you have a few options:
- Kindly decline, stating that’s below your minimum.
- If you can afford it/have the time/really want to work with this client, try to work around it by scaling back on the project scope.
Example: For website copywriting projects, I offer competitor research, SEO services, and 3 revisions with the price. If a client can’t afford my rate, maybe I cut out the free revisions. Or maybe I ask that they link to my site so I can get more visitors.
Reason #3: It Erodes Trust
Businesses are well aware of the “What’s your budget?” tactic, and they are wary of freelancers who employ it. They suspect many service providers will raise prices based on a higher budget—it’s why every negotiation expert tells you NEVER to be the first to state a price.
Even if you have good intentions (which I’m sure you do!), asking “What’s your budget?” can still rub a potential client in the wrong way.
Building trust with your freelance clients is essential. If you’re starting a client relationship with manipulation, you’re starting off on the wrong foot.
But doesn’t asking for the budget help weed out prospects who can’t afford you?
It can, but I am proposing that there is a better way to do that: Publish your prices on your site. Or, if not on your site, send your rate sheet as soon as a prospect comes through the pipeline.
Of course, you’re going to say, “But my pricing depends on each project!” That’s fine. List a starting price for your services. Or a range of prices. Or, in the very least, state what your minimum project fee is. That means if it’s not even worth your time to start a one-off project with a client who can only afford $500, say so. That way, you don’t waste anyone’s time. You’ve got bigger fish to fry.
But aren’t you worried about leaving money on the table?
Nope. Again, if the sole basis of your pricing is the max a client can spend—you don’t know your business’s value. A freelance business will fail if that’s how you operate. Your rates should be based on how much you need to make and what value you provide to the client.
Take What I Say With a Grain of Salt
Remember, this is just the opinion of one freelancer (me). It’s based on more than four years of experience prospecting clients for my freelance writing and marketing business. It’s what’s worked for me, but I don’t expect it to work for everyone.
In short, I don’t ask potential clients what their budget is because my rates are based on the money I need to pay my bills and the value I provide to my clients—not on the client’s ability to pay.
Want to Hear From Other Freelancers?
I did a roundup of answers from eight full-time freelancers. If you want to see what they have to say (and they’ve got GREAT tips!), head on over to the Freelancers Union Blog to read it.