Keeping your freelance rate on the QT with references

freelance rate referencesDr. Freelance, a potential new corporate client has asked to speak to a couple of my existing clients as references. Is it fair and appropriate to ask those clients to keep the freelance rate I charge them confidential, since it’s lower than what I’ve quoted this potential client? I have different rates for different types of clients, but the new client may not appreciate the distinction. Any advice on approach—what to do/say or what not to do/say—would be greatly appreciated. Thanks!—Keeping It on the QT

It’s absolutely fair and appropriate to want your freelance rate to be confidential, because that can be an important piece of negotiating leverage—especially since you already provided a quote. My guess would be that a good client, one you’d use as a reference, wouldn’t reveal your prices thoughtlessly.

Then again, you also have no idea or control over how persistent or wily someone might be about trying to wheedle out the information, so a bit of preventive medicine is prudent.

My approach would be to make a quick phone call or send an email to say, “Hi Pat, I’ve been contacted by a potential new client, and was hoping you’d be willing to serve as a reference on the project. [Full name] works for [company name], and I wanted you to expect a call. Also, can please do me a favor and not disclose the rate I offer you? As a fellow businessperson you can understand, because I don’t want to tip my negotiating hand before I know the scope of this project.”

This approach, adapted with your own wording, accomplishes a couple of things beyond simply asking if someone is willing to be a reference:

  • As a business courtesy, you’re giving the client reference a heads-up in advance about who is calling and where they’re from, and perhaps what the project is. (Similar to the process when you give a referral.) You want the person to be mentally prepared rather than caught off guard. Remember, they’re now serving as a member of your virtual salesforce.
  • You’ve positioned the pricing confidentiality as a favor, which is more persuasive and less defensive phrasing than saying, “Please don’t reveal my prices.”
  • It’s a sincere, subtle compliment to your client by saying that they’ll empathize from a business strategy standpoint. After all, they wouldn’t want a pre-negotiation information leak in their own business dealings. And a good client wants you to succeed!

Secret’s Out? Don’t Reflexively Drop Your Freelance Rate

In the event that your lower prices get revealed, don’t be spooked into giving the prospective client the same rates as your existing client. It’s time to negotiate, and emphasize the value you deliver and the fact that the project at hand is different from the services you provided to the other client.

A few final thoughts about references…

  • For the future, it’s worth adding a line to your contracts or agreements that your hourly rates or project prices are to be kept confidential.
  • Ed Gandia of International Freelancers Academy has a fantastic video take on why solo professionals should want to limit the amount of reference requests they get: What to Do When You’re Asked for References. I agree 100% with his strategy and reasoning.
  • It’s pretty common that a potential client won’t end up calling your references anyway. The fact that you’re willing to give them names and contact info is often enough.

Epilogue: This post is an expanded version of a brief discussion in an editorial group on Facebook. I’m pleased to say the outcome was positive: “For the record, Jake’s phrasing (with my customizing) worked splendidly; both clients responded with ‘I get it!'”

Do you have a question about your freelance rate, client negotiations, or any other freelancing topic? Drop Dr. Freelance a line through the Ask the Doc page.

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