The emotional burden of setting prices
How self-worth hurts our pricing, and what we can do about it
Hi Friend,
One of the most difficult aspects of freelancing is setting our prices.
At its most basic, this should seem fairly straightforward: figure out how much you want or need to make in a year, set how many days/weeks you want to work in that year and then how many billable hours you can (reasonably) manage per week. Et voila, you have your rate.
Go out in the world, charge that rate and find success, joy, and happiness everywhere you go.
Simple, right?
Except of course it isn’t. I know it, and I know you know it, too.
When you’re a freelancer, setting your prices is more fraught with emotional implications than handing out a rose on a reality dating show. It’s a nightmare that causes us to break out in a sweat in the middle of the night. We delay sending quotes to new potential clients because “what if they say no?” We argue in our own heads and negotiate against ourselves before anyone else has ever had a chance to second-guess our pricing.
The problem is that we glorious freelancers are intrinsically linked to our product. So our pricing speaks volumes about how we value not just our services but ourselves. It also says something about how we understand and place our work in a greater context.
Price too high and we worry we’re seen as too confident. Arrogant, even. Price too low and we worry we’re seen as incompetent. Unprofessional.
Unfortunately, the sweet spot of “just right pricing” that earns us money without making us uncomfortable is as illusive as a dancing unicorn. You want to believe it’s out there, but it sure is difficult find.
Here’s why.
In freelancing, the finished product isn’t something separate from us, the way a mop (or other tangible product) is separate from the person who created it. Our product is part of us, it’s an extension of our creative and intellectual self. It’s deeply personal, even if it’s created to meet a client’s specific needs and objectives.
Our experiences, knowledge, and skills are wrapped up in the work we put out in the world. The product grows, evolves, and changes as we do. It’s as dynamic as we are.
The person who created the mop can set pricing without self-worth being a factor. They can price based on a mostly objective formula that includes the cost of producing and shipping the mop, plus their overhead and their desired profit margin to arrive at a price. They verify that price based on competitive market rates and adjust from there. Their intrinsic characteristics stay far away from the whole thing.
“This mop must have been developed by a highly creative and innovative thinker who is likely also kind and highly intelligent and probably loves puppies. Therefore, I’m willing to pay an additional $200 for it,” said no one, ever.
For freelancers, there isn’t a tangible product with its own costs to produce that we can use as a foundation for pricing. We can’t hand the client a finished annual report and say “The components of this report cost $3,500 to produce, so adjusting for profit margin the cost to you is $4,000.”
Without something tangible and objective to hang our pricing on, setting prices becomes an entirely emotional, subjective act.
We come up with a price in our head that sounds reasonable (whether or not it’s based on what we need to earn to stay in business). Then we anticipate all the reasons why people external to us will reject our pricing based on factors that are internal to us, that only we are aware of.
We aren’t smart enough. We aren’t experienced enough. We don’t know enough about this particular industry. We don’t deserve that rate. Who do we think we are, anyway?
Exhausted and terrified of failure, we lower our rate.
And thus, purposely or not, our self-worth becomes an influential factor in our pricing.
Sometimes, dangerously, the most influential factor.
The thing about self-worth is that it’s incredibly precarious. It can be significantly increased one day by receiving a kind word from a client or an award from a literary group and destroyed the next day by negative feedback from a client or overcomparison with colleagues we view as more successful than us.
Our self-worth is tied to how we were raised, how the people around us talk to us, whether we were treated as intelligent or not, how well we did in school, whether we see ourselves as experts, and a host of other factors. Deep-seated beliefs formed during our early years play a pivotal role in our self-worth, even if we don’t realize it.
It has nothing to do with the client sitting in front of us.
Our self-worth is also often based on how employers have valued us.
When you’ve been told your value is barely above the legally required minimum, it’s difficult to suddenly feel comfortable charging four or five times or 10 times that amount.
It feels uncomfortable to say we believe an hour of our time is worth $100 when we’re used to being paid $10. We worry no one will want to pay us what we think we’re worth. We tell ourselves don’t deserve that amount. Self-doubt creeps in and burrows its way into our fragile psyche.
“Who do you think you are, charging $100 an hour when there are people out there making $16 an hour?” the voice in our head (who sounds a lot like a disapproving grandparent) might argue.
Of course, this completely ignores the fact that there are also people out there making thousands of dollars an hour, likely not questioning whether they’re worth it. (They don’t even question whether they deserve to go into space, they seem to operate on the assumption that they deserve everything.)
So how do you overcome these issues?
Wouldn’t it be amazing if there was one magical way to suddenly make all freelancers feel better about charging reasonable rates? There’s not, but it’s not all doom and gloom, either. If it were, I would have bid freelancing adieu along time ago.
There are things you can do to help yourself get more comfortable with pricing (and maybe build your self-worth):
You could use the formula mentioned above to arrive at an hourly rate and force yourself to charge it even if doing so makes you uncomfortable. Just do it (which is a very practical and direct strategy, both for setting your pricing and training to run a 5k).
You could start with lower pricing and develop a plan to increase your prices. See my post on increasing prices here. I also have a (paid) post on staying firm on your fees.
Working with a coach, mentor, or counsellor can help you to identify where low self-worth is hurting your business and find strategies to overcome that mindset. Probably they’re going to recommend journalling about why you don’t deserve more money. So maybe start there.
Surround yourself with successful freelancers. Seeing other people be successful shows you what’s possible. Look to others as an inspiration for what you can achieve, rather than a source of comparison for what you haven’t achieved yet. Let them tell you about all the failures they’ve been through, so you see that it’s not just you. If they tell you they’ve never experienced rejection or failure, identify them as a liar (in your head, not outloud) and move along. We’ve all had failures.
Find ways to reframe rejection. While freelancers often take rejection personally, it’s very rarely about us as human beings. There are a million other factors that go into a client’s decisions, including their budget, timelines, priorities, needs, and whether you’re a good fit (which still isn’t a comment on you personally). Instead, view rejection as a natural part of freelancing (trust me, we all experience it) and an opportunity to find clients who are better suited to you.
Celebrate all the wins. Even the small wins are wins. Acknowledge your achievements and keep a file of kind things people have said or written about you. Yes, even your teachers at school.
Focus on the value you bring to clients rather than the time you put in. It’s a trap to think of your services only in terms of how long they take you to complete. Your product creates value for your clients, but not everyone out there will view your work the same. I hire someone to mow my lawns twice a month. I value him not just for the service he provides but for the fact that I don’t have to spend my precious free time during summer days pushing a lawn mower in the heat. Someone who has children to mow their lawn for them won’t perceive him the way I do. That doesn’t mean he has no value, it just means he has to find people like me who are in a position to appreciate it.
Perhaps most importantly, be kind to yourself. I’ve yet to run into a freelancer who hasn’t experienced failures, issues with self-doubt, and chronic, raging imposter syndrome.
Acknowledge your feelings of inadquacy and don’t judge yourself for them. You aren’t stupid or abnormal for having them, you just need to be mindful not to let them interfere with how you value yourself.
And yes, as you grow professionally your self-worth will evolve just as your writing and editing abilities will. Hopefully you’ll even get comfortable charging more for your work.
Here’s to your freelance success,
Heidi
Oh my goodness, I didn't know you wrote a post just for me!