How to use pricing to avoid red-flag clients

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red flag client pricingI recently received a call from a marketing person who was eager for me to provide the content for a few of her clients’ websites. I knew about two minutes into the call that pricing was going to be an issue, when she spoke the classic phrase you’ll hear from many red-flag clients: “We have a small budget…”

I didn’t want to be rude and cut her short, because that’s not the reputation I want to have in the business community. Anyone who calls me for writing or editing services needs to be treated with dignity and respect. I did, however, need to find a polite way to let her understand that I wasn’t going to be interested in having her as a client.

She flattered me a bit, talking about how she thought my style would be perfect for a few of the websites, and I thanked her for her kind words. (She also mentioned that the previous freelance writer hadn’t done a good job—a second red flag, but that’s a topic I’ll address in a future post.)

Inevitably, she asked me, “What’s your hourly rate?”

If you’ve read my blog or books, you know I’m generally reluctant to disclose my hourly rate for strategic reasons. This low-budget-alert type of situation is an exception to that rule, because I already knew she couldn’t afford me. I gave her my high-end price, padded a bit for good measure, and heard an audible gasp on the other end of the line.

“Oh,” she said. “I’m not sure the client has the budget for that.”

The Frivolous Bid

In a way, giving a high hourly rate in a first phone call (particularly with red-flag clients) is the shortcut version of a bidding strategy that I describe in The Science, Art and Voodoo of Freelance Pricing and Getting Paid. Here’s what I said in the book (available on Amazon in paperback and Kindle):

Behind closed doors, I call this the frivolous bid, which I use when I get a request for something that I’m not terribly interested in or when I’m really busy but would be willing to do it at a way-above-market price. Note: You should use this method sparingly and only with over-the-transom business—never existing clients who are familiar with your pricing structure and might be upset by a way-out-of-line bid.

So, a frivolous bid is not designed to be persuasive in the usual sense, but rather a tool to use when you’re already maxed out on work or don’t have a passionate desire to work on a given project. That said, you need to be careful: Money doesn’t change the fact that you’re uninterested or overwhelmed, and you might regret taking the job if your decision was purely financial.

Guilt-free Pricing

I have to give this person credit for persistence, because even through her shock, she asked if I might be willing to lower my price, because there could be lots of future freelance work. (That’s red flag #3, if you’re counting.) I politely declined, and the call was pretty much over at that point.

There’s a bigger picture here, too: Never feel guilty that someone can’t afford your freelance services. [tweetthis]Never feel guilty that someone can’t afford your freelance services.[/tweetthis] Your local Audi dealership doesn’t spend a moment worrying that you can’t buy a fully loaded R8, and Quantas doesn’t care that you can’t swing the airfare to Australia. It’s just business.

Beyond red-flag clients, there are also lots of folks who have great ideas or fun projects, but simply don’t have a sufficient budget. That’s not your fault, and you shouldn’t let it become your problem. Qualify your prospective clients during the first phone call, and focus your efforts on those who can pay you the rate you merit for the service and experience you provide.

In the comments, what’s your go-to strategy to avoid or turn down red-flag freelance clients?

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  1. Mike says

    If I get a bad feeling about someone, I’ll usually say “I’m booked solid for the next two months.”

  2. says

    A lot of people call this a “go-away” price. It is a reasonable strategy and I’ve used it but it can result in surprise acceptances, so if it is a client you absolutely will not work with any circumstances, it’s best to be more upfront. Say it won’t fit into your schedule, you know nothing about that topic or aren’t interested in exploring (can be useful with erotica or even crime or horror), and blunt honesty: your [project] just isn’t a good fit for me; it doesn’t grab me and you deserve to work with someone who really likes it.

    • Jake Poinier says

      I like that phrase, Karen! You are absolutely correct in protecting yourself against an inadvertent “yes.” If you’re going to bluff at poker, you need to be aware of what you’re doing, eh?

      Mike, that’s a good strategy–but I have had people boomerang on me, and call me two months later, asking, “So, are you available NOW?”