What I Learned From Dan Kennedy About Price Strategy
This week has been all about takeaways from attending AWAI’s FastTrack to Copywriting Success Bootcamp and Job Fair …
Today, I’ll give you a pricing strategy I learned from Dan Kennedy and explain why you should stick to your rates.
One of the toughest decisions for freelance writers is how much to charge for services.
On one hand, you worry about charging too little. On the other, you fear demanding too-high prices, losing the job, and being left empty-handed.
Your desire to win a project, coupled with insecurities about the value you offer, can get in the way of charging what you’re really worth.
I used to struggle with this tremendously.
But what I heard consultant-strategist-copywriter and best-selling author Dan Kennedy say completely changed how I handle fee negotiations forever.
He mentioned it takes him three days to write a book …
That he couldn’t afford to spend more time on it than that because anything over three days would cause him to lose money. To determine this, he figured out what he would make on the book and divided it by his daily rate.
Admittedly, Dan is operating on a very high level. But his formula made it much easier for me to price projects. And it can help you too, no matter where you are in your freelance career.
To use his strategy, you figure out how many hours or days a project should take. Determine how much you need to make per day. Then multiply the two together to get your project fee.
For example, if you need to make $500 per day and it should take you three days to write a seven-page website, then your fee would be $1,500.
Dan’s ability to stick to his pricing structure in the face of clients demanding he lower his rates is impressive.
It helped me recognize the pitfalls of not sticking to your price structure. It sets you up for frustration. And even endangers your reputation.
Here are three common scenarios to be aware of and consider before you lower your rate:
Scenario One: When negotiating your fee, a client says, “We’re looking to establish a relationship with a writer who could provide copy on an ongoing basis.”
Usually this translates to, “Can you give us a deal?” While they may be looking for a long-term relationship, oftentimes you’ll get burned.
Either you’ll never get another assignment, or if you do, you’ll experience a host of other problems such as reworking existing copy for free or haggling over price for every project.
After all, lowering your price once demonstrates you’ll probably do it again.
Scenario Two: You lower your price for an opportunity with a great company because you really want the job.
The problem is that the lower price makes the client think you aren’t qualified to handle their project.
Scenario three: You offer a lower rate by cutting out parts of your proposed solution because the client says he doesn’t have the budget.
Because elements are cut, the campaign fails. To top it off, the client blames you and tells others that your copy didn’t work, damaging your reputation.
Watch for these three scenarios. Determine your rates before you approach clients. And when creating a proposal, ask yourself if you think you can help this client be successful. Doing these three things will help you stick to your rates and easily move on to the next prospect when the project isn’t right for you.
Do you have any stories or questions about negotiating fees? Share them below.
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This article transcends the writing industry into any industry a freelancer operates. This advice is SPOT ON. I have fallen victim to the "we have no money, but this project is easy." You can substitute the word "simple." Inevitably, the job becomes the hardest or most emotionally agonizing you'll work. Don't be foolish and heed the article's advice! I learned. I may have lost a little money in the process, but I retained my dignity and saved myself a few huge headaches.
Guest (WSmith) –
WSmith--thanks for your comments. I know it is helpful for others to hear about your experience.
Cindy Cyr –
Timely article. I am faced with # 2 right now. Hes a potentially new client.Twice he has asked if my fee is open to negotiation due to the size and value of the project. Twice I have said NO. He still has not signed the work contract but I refuse to buckle.
Guest (SMB) –