Raising rates for a friend of a client

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Dr. Freelance: I have been working with a private partner/funder on a writing and research project for the past year in which I accepted a low rate in exchange for the lion’s share of credit and 50% of royalties. He has now referred me to a friend of his, and I’m realizing I should probably charge about 60% more. (That’s how deeply I discounted myself.) With that said, what’s your thought on raising rates that much for a friend of a current client? It’s not a project that I’m especially passionate about, nor do I expect there to even be a book, so I hesitate to use royalties as part of my negotiation. More generally, is $40 a reasonable rate for someone who is relatively new to the game? — Ready4Raise

R4R, I’d think $40 is a perfectly reasonable rate. In fact, you can probably start raising rates steadily as you get more experience in the coming years, and as you get a feel for what the market will bear for your skills. You didn’t indicate where you’re located, but I’m assuming that it wouldn’t overprice you for the market or industry that the project is in. (I’m in Phoenix, which doesn’t command rates as high as, say, New York or L.A. But I had a friend who moved to rural Tennessee and soon learned she had to drop her rates accordingly for local clients.)

I think your instinct is correct to keep royalties out of the equation if you can. Bird in hand vs. two in bush, right?!

Now, if I’m reading your question correctly, part of your concern is that the potential client may have a preconceived notion of your fees, or that he’d bounce it off of the partner with whom you’re contracted. My feeling on that is….you can’t worry about it. If he’s salivating at a bargain-basement price and suffers sticker shock, that’s his issue, not yours. You have to price yourself objectively based on the project at hand.

If he tries to say, “You did it for my friend for $X and you’re telling me $X+60%” you need to be ready for an answer that says:

  1. you can solve his problem/make his project great/you’re worth every penny; and
  2. this is a different project, perhaps more challenging/time consuming, and not directly comparable

If someone wants to challenge you on price, that’s probably going to be an ongoing issue. A little negotiation is fine, but you always need to heed the voice in the back of your head.

And the second caveat is to simply be wary of the “friend” component of this situation. Just yesterday I was reminded of the dangers that lurk in those waters, and told my tale of woe here: “Suckerpunched (or Why Friends and Family Make Lousy Clients).”

How do you approach raising rates for someone who might have inside knowledge or unreasonable expectations about your prices?

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Comments

  1. says

    I do a lot of corporate copywriting, and I’ve been interviewing CEOs recently. A phrase I hear often about successful businesses? (Completely unrelated to writing.)

    “NEVER COMPETE ON PRICE.”

    In other words, if someone wants you specifically because you’re cheap– or she believes you are, based on a referral– steer clear. You will never be cheap enough for a cheapskate, and you’ll feel demoralized and deliver crappy work for less than you’re worth (or in some cases, less than you can withstand to offset given, say, your normal living expenses).

    Find a niche. Develop it. Become an expert. Charge what you’re comfortable with. Be up-front.

    I realize all five of those things are difficult to achieve. I really do. But repeat them like a mantra and your station will gradually improve to the point where you don’t have to worry about one referral’s preconceived notion of price.

  2. Dr. Freelance says

    Business wisdom to live by, Lindsey. Never compete on price. Thanks for a thoughtful comment!

  3. Lori says

    You might even be able to respond that client #1 gives ongoing projects and this is a one-and-done….

    And Lindsey is right – never compete on price. The price is the price is the price. He either pays it or you wish him well and part ways.