Wednesday, February 29, 2012

Fair Markups or Price Gouging—When is it Okay to Charge More?

If you’ve done your homework in establishing rates, chances are you have a basic minimum rate below which you know it isn’t worth your time to take a project on. But do you have a maximum rate? When do you raise your rates beyond that—if you do?

In this blog post, I’m not discussing raising your rates in general. I’m talking about specific instances when it’s fair to charge one client more than another for the same amount of work. Here are a few instances where you may think about charging more—and my thoughts on how appropriate each one is.

When you’re working with a difficult person. If after every email exchange with this person you feel the need for a glass of wine—even at ten in the morning—you’re officially dealing with A Difficult Person. These people are, in my experience, thankfully rare. But they do exist, and if you haven’t encountered one yet, don’t worry—yours will come.

So should you charge extra for bad behavior? A lot of people do—although they won’t tell the client that. I think it’s fair. A difficult person adds to your stress levels. You’re likely to get bigger demands, more revision requests, and more general hassle from difficult people. And sometimes you really don’t want to work with the person unless it’s for a lot of cash—so you quote the fantastic, ridiculously high price that would make their behavior tolerable.

When the client wants more than copywriting. I always charge more when the client wants anything more than straight copywriting—whether that’s including images, writing with HTML text, or including embedded links. Even what sounds like a small amount of added work can add up to a lot of time over the course of a large project. Usually the amount I charge per page for this type of added work is small—but it also adds up over time, and makes the extra effort worth it.

When you’re working in a client’s CMS. Uploading anything onto a client’s website is worth an extra mention. You never know what you’re dealing with if you’re using a custom CMS—you don’t know if you’ll have a difficult time getting the formatting just right or navigating to the right place to post, and not all CMS systems are easy to use. If your client wants you to navigate an unfamiliar CMS as part of your project, always get on the phone and have them walk you through using it before giving a quote—so you’ll understand better the work involved.

When the client can afford it. This one’s a bit more problematic. Some might call this price gouging…and when the tables are turned, I have to admit I’d feel that way. But it’s not always a simple answer. Some clients are used to working with freelancers who charge a certain price, and might not take you seriously if your price comes in well below theirs. In some industries and situations, a lower price can spell out “amateur.”

When you’re charging for your colleague’s graphic design, too. I’ve talked to people on the client end before who resent this situation—when the client asks for another service, such as graphic design, for example, and the writer brings in a graphic designer and then charges a mark-up on their price. I think it’s fair to charge a mark-up, however, if it reflects a certain amount of project management you’ll have to do. If you present yourself as the head of the team or company providing the service to the company, you’ll be held responsible for the team members’ work—at least to some extent--and that should be taken into account in pricing.

When do you mark up your prices—and where’s the line for you when it comes to fairness?


Lori said...

I mark them up when I know the competition demands it. For instance, I can't compete with New York City rates if I'm charging $100 an hour - that makes me look amateurish. I know what NYC writers can get, so I bump it up to compete. I charge more than that per hour anyway, but only because the clients and market have shown it to be the going rate (three clients paying it makes it okay for me to charge it!).

Does that make sense?

Jennifer Williamson said...

I think that's totally reasonable! I've definitely found it to be the case that among higher-paying clients, you look a bit silly charging $50 an hour or something like that--and there's less respect for your work and opinion if you're the cheapest option. Of course, you'll always get some business being the cheapest option--but it's not a good position to be in.