Do you charge what you’re worth?
I’ve asked this question of many, many creatives, freelancers and small business owners, and only a handful say yes. The rest? They wince, squirm, and say that while they’re proud of what they do and they know they do it well, asking for a fair price has never come easy.
Let me share some examples.
Valerie is a talented photographer, with a huge archive of work that is slowly gaining recognition from the art world. But she has a problem. She hates asking for money for it.
“I have to charge £1000 for a print,” she says uncomfortably. She then explains that museum-quality framing costs her £350, then there is up to 50% commission if it sells through a gallery, and high shipping and insurance costs if it sells through her website.
“I feel terrible taking that kind of money from people,” she says. “What if they can’t afford it?”
Susan is also struggling to price her work.
She sells her ceramics at craft fairs, but says she often allows customers to negotiate on price. People looking at her hand-made pots sometimes compare them to what they’d pay for the mass-produced goods they see in shops, which hurts when so much love and time has been put into her unique creations. Also, there are expenses: petrol to get there, parking, the cost of the stall.
“I’m always worried I won’t break even on the day, and that I’ll lose the sale if I price too high. So I let them bargain it down, or I just ask for too little. Then I find myself resenting it, even as I’m wrapping it up to give to the buyer.”
She also finds it hard to set a fee for her teaching. She had been charging £25 per hour for one-to-one tuition, but then another artist told her that as a mere potter, she should be grateful for £9 per hour. This has played on her mind ever since.
“I want to be fair!” she says. “I don’t want people to feel ripped off.”
David is a consultant.
Over the years, he’s done a huge variety of jobs, from retail to writing, performance to PR. Now, he uses all that experience and his impressive network to help small businesses raise their profile, doing everything from organising events and openings to creating films and presentations.
When we talked, he’d just been to a meeting with an expanding architectural practice who wanted to look more edgy and hip so they could attract more interesting projects. His presentation had gone well, and they seemed keen to work with him. But when he asked for a four-figure monthly retainer over a year, they were shocked and said they couldn’t consider such extravagance. They’d been thinking of a far smaller, one-off fee.
“How do I show that what I do is worth that kind of money?” he asked. “It’s all about my ideas, my knowledge, my contacts, and a lot of what I do is improvised, as I go along. When they asked how I could charge so much, I just couldn’t answer.”
It’s often hard to put a value on our work. Especially if what we deliver feels intangible, if what we are selling is our expertise, our contacts, our skills, our creativity.
Ten ways to charge what you are worth.
1. Experience matters. Skill matters. Contacts matter.
If you struggle with this, here’s a parable that might help.
A huge new cruise ship is about to leave port and filled with VIP passengers, but the engine just won’t start. The crew are baffled, so they call in an outside engineer. This engineer spends a few minutes looking and listening carefully to the machinery, then opens his toolbag, takes out a spanner, and tightens a nut. The engine roars to life, and he quickly disembarks to allow the ship to set off on its journey.
His invoice for this was £10,000. The cruise company queried it, saying it seemed excessive a few minutes work, and tightening a single nut. They had, of course, already forgotten how much money they would have lost, had the voyage been cancelled.
But the engineer remained calm. “Would you like the bill itemised?” he asked.
The new bill read as follows:
Tightening one nut: £10.
Knowing exactly which nut to tighten: £9990.
This is the thing we often forget, when pricing our work. We charge for the time, and not the knowledge and experience we bring to a job.
We invoice for tightening the nut, not for knowing exactly which one to tighten.
2. Your time matters.
Break down how long it reallytakes you to do a job. Track everything. The pitching, the marketing, looking for work. The meetings and phone calls to set it up. The research. Ordering parts and materials. The travel time, to and from the job.
If you are self-employed, you also need to factor in sick pay or holiday pay. (I put 5% of each cheque into a savings account, so I’m covered for just such times.)
Suddenly, £25 an hour looks more reasonable, no?
3. Your overheads matter.
Are you using your studio or office for this work? Your car? A computer? Specialist equipment or clothes? Materials? If so, factor this in.
Once she had gone through these first three steps, Susan started to see that she was actually selling herself short. She talked to her students not about reducing her price for one-to-one tuition in her ceramics studio, but increasing it.
“I may be just a potter,” she said. “But I’m a really good one, with 20 years of experience. And a lot of specialist equipment.”
Most of her students were happy to pay the new fee. Two decided not to continue, but Susan’s income remained the same, and she used the extra time to work on her marketing, selling her pots online. She has now given up selling at craft fairs, and is approaching more upmarket shops to stock her pots instead.
“They take 40% of the ticket price, which always seemed too much to me. But the craft fairs made me miserable and took up a lot of my time and energy. I’m starting to see that has a value, too.”
4. Value is in the eye of the beholder.
How much is a painting worth? Or a pot, a thousand words, your imagination and ideas, or the contacts you’ve gathered over years?
The answer is pretty much this:
Whatever people are willing to pay for it.
Is the painting below worth $450 million?
The answer is yes, because it took exactly 19 minutes for a bidder to offer that eye-popping sum, when Leonardo da Vinci’s Salvator Mundi was auctioned in New York in 2017.
Now clearly, you are not (yet) da Vinci. And it took more than 500 years for his work to accrue this kind of value.
But we all know that you can buy a picture for millions, go to a graduate art fair and snap up an original piece for a couple of hundred, or pop to IKEA and buy some mass-produced wall art for £20.
The question is, where on that spectrum do you belong? And where would you like to be?
5. When to sell cheap.
There are times when it does make sense to keep your prices low. When you’re young and just starting out, you (hopefully) have endless energy and ideas. At that point it’s good to just get your work out there, to build up a client base and a reputation.
But even then, it’s also important to know when to start valuing yourself more highly. As soon as you have some experience, and some evidence that you can do the job, start putting your prices up. You can’t pay the bills with exposure.
If you’re older, and starting a new venture, don’t discount the experience you already bring to the job, even if you gained it in other areas. You might need to do your first projects cheaply, just to attract your first clients, get referrals and testimonials — and gain confidence in your new skills. But once you’ve got off the ground, raise your prices quickly.
Be aware that it’s hard to stay ahead in any business, if you are trying to compete solely on price. There will always be someone willing to work harder than you, and do the job for less — or even for free. You need to add value by being better, not cheaper.
6. It is not for you to decide what people can and cannot afford.
I have a friend who loves shoes. Her income is pretty average, but she has a closet full of Laboutins and Jimmy Choos. She has a pair of biker boots that cost her four full months’ pay, ten years ago. And she loves them. She still wears them, and still thinks it was worth giving up a holiday that year, and living mainly on cheap meals of baked potatoes and lentils to buy them.
Would I do that for some boots? No way.
But I’ve gone without an awful lot of designer clothes and fancy holidays to own a house I truly love, and a huge table that can comfortably seat 10 friends for dinner. Because that’s what’s important to me.
The truth is, we all have different priorities.
We’ve all had friends who claim they’re too broke to go out, then shortly afterwards buy a new car, or go on an expensive holiday. They weren’t lying when they said they couldn’t afford to go for that meal, or that weekend away. Everyone’s money is finite, and they had already chosen to spend theirs elsewhere.
Most of us have money we allocate for day-to-day expenses and — if we’re lucky — the little luxuries we value, be that a gym membership, cable TV, or a fancy new phone. We also tend to have pots of money salted away — savings, windfalls or emergency money — that we’d be willing to dip into, if we really see the value in what we’re buying. That could be a piece of art, a beautiful hand-made pot, a coach or consultant who will help us get our business or our life to the next level — or a pair of ridiculously expensive and gorgeous boots.
Your job is to make something that is of value to some people. (Because you will never please all of the people, all of the time.)
Then you need to find those people, and tell them about it. And provide what you’ve promised — more, if you can. Serve your customers brilliantly.
The others, the ones that can’t afford it? They’re not your customers.
7. If you’re doing something special, tell people!
Make sure you’re telling the story behind what you do. This is crucial.
If you are selling a product, make sure you tell people about the work that went into making it. Luxury brands are masters at this. They make sure we all know their about history, their heritage. They invite journalists into their ateliers and workshops to see the craft and skill that goes into their hand-made shoes, their bags, their couture gowns. And people are happy to pay for the prestige of owning their products.
Once Valerie, the artist, explained the quality and cost of the framing of her work on her website, for instance, and talked more clearly about her art training, and the prestigious galleries where her work had been shown, her sales went up because collectors felt more certain that they were investing in quality art. She now charges £2000 for the same prints she struggled to sell for £1000, and is increasing her prices regularly.
Does your product or service solve a problem? Then sell the end result, not the process. Make your potential client really connect with how it would feel — what their business, their health, their life might be like — if that issue was solved, completely.
David, the consultant, went back to the architect’s office, with evidence of publicity he had garnered for other clients, and testimonials about how their businesses had grown. He asked what difference it would make to them if they closed a contract to build a cool new house that might end up in an interiors magazine. Or to create an interesting commercial building that would get them noticed by a whole new audience. They realised that if they signed to do just one big new project as a result of his work, their investment in his services would be more than recouped.
8. Sometimes, you will lose the sale — and that’s OK.
If this worries you, raise your fees one client at a time. There will be natural times to do this: when contracts are renewed, when you start a new project, or when you’ve been working together for six months or a year, for instance.
You will lose some customers when you charge more, and that’s OK. You should be constantly letting your lower paying clients go if they can’t afford you, and replacing them with people who can.
Remember, it’s actually much easier to find one new client willing to pay £1000 for a premium service, than 10 new customers willing to pay £100 for something less. What’s more, the higher paying client will respect you more, value you more, and treat you better.
9. Once you have your premium offer, you can always launch a down-sell.
Once Valerie, the artist, started thinking about people she knew, and what some of them spent on clothes, holidays and eating out, she felt much more comfortable charging high prices for her prints.
But she has a lot of younger fans who go to her shows and share her work on Instagram, so she still wanted to offer something that was affordable for them. So she has started making smaller prints in much larger editions which she sells unframed for £150, and beautiful books of her work that sell for £35–50.
10. Keep assessing your prices.
Choose a time each year to review your rates. Your long-term clients will then come to expect an annual raise. It’s also a great way of drumming up more sales. Send out an email to regular clients saying that if they book their next projects in before a certain date, they’ll get the old rate. Or ask your retail outlets to tell customers that the price is going up next month.
Because you’re worth it. Aren’t you?