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6 pricing strategies for freelancers

Entrepreneurs | 03 December 2020 | Written by Jenny Bjorklof

One of the perks of being a freelancer is that you get to decide how to bill your clients. There are many ways to charge clients for your work. However, different clients and/or projects may require different pricing strategies.

6 pricing strategies for freelancers
In my 3 years as a freelancer I’ve tried different pricing strategies. I hope this blog post helps you think of new ways to set your freelance rates.

Here’s a structured overview of the six most common freelance pricing methods and when to apply them. 
 
 
Pricing Strategy

Explanation
 
When to apply
 
Remarks
Time based pricing
Pricing is defined per hour per day. The work is primarily operational. Your earning potential is limited since your time is limited. You get ‘punished’ for working efficiently (fewer billable hours).
 
Project based pricing
Pricing is based on deliverables in a certain amount of time. The deliverables are clear. Make sure to add what you charge if you need to do extra work or the project takes longer.
Pricing combo/package Make a combination price, for example mix time based pricing and results based. When part of the project has clear deliverables and part is operational. Your client can notice that the project based cost is higher than the hourly rate.
 
Retainer
The client pays for your availability. Can be time-based or deliverables based. There is an on-going need for work but it’s not clear what.                     Be sure to give a proper estimation of time spent.
Results based pricing If certain results are reached the freelancer gets a commission. You can control factors contributing to the results. Being able to measure results is crucial, be sure to be clear about objectives.
 Value based pricing A fixed-fee project based on the value delivered to the client. It’s easy to establish how much the client will earn on your work. Social, economic, and technological factors that are outside your control. Be clear on how you define the value.
This overview helped me a lot over the years, because most of the time I combine them in my contract proposals.

Personally, I don’t like to keep track of my time and find it a waste to do so, so I tend to avoid purely time based pricing. I do use an estimation of a rate per hour when calculating how much a deliverable will take to complete. Keep in mind that your rate should depend on the following factors:
 
  • the type of work,
  • expertise required
  • how much I want the job
  • how much the client wants to work with me
  • demand/supply ratio
  • competitors and going market rate
  • deadline and time required
  • type of customer (larger customers tend to get more business value, meaning I can charge more)
 
I’ve used each of the pricing strategies numerous times, sometimes even for the same client. There are no right or wrong billing methods, but there are some that work best in certain situations. No matter the billing strategy, always try to keep the conversation focused on the value you’re providing to the client.
 
Do you still have questions about your freelance rate? Join the Freelancers in Belgium Facebook group and ask about it from your fellow freelancers.
 

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