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May 3, 2010How do you decide on a “fair” price for a job?

This is a blog post about copywriting rates in the industry. I provide all inclusive quotes for work on a price-per-project basis. If you’re interested in finding out how much it costs to hire me, get in touch.

How much is fair?

Clients often ask me to explain my pricing structure. What are my copywriting rates? Do I charge by the word or page, or by the hour or day? Most importantly they want to know one thing — do I charge different clients different amounts for the same thing?

The short answer to that question is no. But a longer answer requires some explanation. Because it depends on what your definition of “the same thing” is. It’s impossible to measure your work in terms of words, or or even hours — the only true measure of worth is its value.

Beware of hidden extras

In most industries, it’s the customer who gets hit with hidden extras. Us freelancers often get hit with hidden extras from clients — which we eventually learn to factor into our copywriting rates.

Clients are happy to pay you for your hard work. They’re not so happy to pay you to answer your emails, price up and send out detailed quotes, look for your next job, and, of course, do your taxes. Yet “admin” work takes up half my week. So I have to factor this into my prices. Every freelancer does.

So when people come to me with a job and say “this will only take you a couple of hours, so I’m only going to pay you for two hours work” I ask them to think again. You can’t judge the complexity of a job by its word count, or how much time the writing takes. You have to look at the client.

Some clients have greater service requirements

The bigger the client, the greater the administrative costs tend to be. Bigger clients can be more particular, as more is at stake, and more stakeholders are involved. On the other hand small, first time clients may take longer as they require greater input in the process and are unfamiliar with the way things work. I’m happy to work at a slower pace and work with the client step by step so they get the copy they want. But naturally I factor time into any price per project.

My copywriting rates include the length of time a project takes, but also include this “extra” time.

But this still doesn’t answer the question of variable prices — charging different clients a different amount for “the same thing”.

Two different companies, same amount of work?

  • Company A comes to me looking for six pages for their eCommerce website. They sell dresses. They sell about ten dresses a week and have a budget of £500. I agree to do the work and take their deposit.
  • Company B also want six pages of copy for their eCommerce website selling dresses. However, instead of selling 10 a week, they sell 10,000. What do I charge them?

I estimate that because of the extra research, tone of voice choices, and additional time spent driving out to attend meetings, etc,  the work for company B will take four times as long. A “fair price” therefore might seem to be £2000 for the “same” work. But only at first glance.

It’s not a like-for-like comparison.

If my words result in an increase in sales of 10% for both companies, that’s 1 extra dress for company A, but 1000 extra dresses for company B. In other words, my words generate a thousand times more profit for company B than they do for company A. I also take this fact into account. Why?

The value of my work includes the added value it gives you.

My copywriting rates need to reflect the added value I provide to each client. For example, if each additional dress sold represents £20 in additional profit, I am making company A an additional £1040 a year — meaning it takes them six months to pay off their investment in me.

Company B, on the other hand, would be making an additional £20,000 a week. All of a sudden, it hardly seems fair that I’m charging them just £2000 for the work I’ve done, when it has a value to them in excess of a million pounds.

For this reason, I will also factor in the value of the work to the client. I wouldn’t ask for a proportional share, but I do expect the value of my work to be recognised and adequately compensated, for one simple reason: I believe in performance related pay. 

Trouble is, variable pricing doesn’t work when you publish sample rates. Because everyone wants the lowest possible rate.

Fact 1: Middle of the road doesn’t sell.

Let’s imagine you’re buying a new notebook.

Notebook A costs £200.
Notebook B costs £500.
Notebook C costs £1000.

Which one do you pick? Chances are Laptop A has poor specs, but you’re on a budget, so you buy the cheapest. Or the extra £500 means nothing to you, so you buy the best. You choose C.

Who chooses option B? Answer: no-one. It’s not cheap enough for people on a budget, but people with a much larger budget only want the best.

Middle of the road doesn’t sell.

So your options are simple:

  1. Be the most expensive or be the cheapest. Be option A or option C.
  2. Charge a variable rate: be option A to clients on a budget. Be option C to the rest.

But if Client C sees you charging Price A, they will demand the same rate — even though the value of the project is different. “Why should I pay £5000 for this copy when this guy is getting it for £500.” Truth is, if they don’t see that your work is even better value for money if it earns them a cool half million in extra sales, versus a few thousand for the other company, they don’t deserve you as a writer — as they don’t truly value your work.

But is it fair to charge people different rates for the same copywriter, the same skill, the same approximate amount of time?

I’m going to answer yes.

Real life examples abound:

A friend and I recently tried to go bowling at the Lakeside Superbowl, Chichester. We were told by a very grumpy member of staff that we couldn’t have the deal advertised on their website as we hadn’t booked a day in advance — even though there were plenty of lanes available. We were told we’d have to pay £40 between us for four games, rather than the £16 in total the website suggested. Naturally, we refused to pay, and left.

Having been tempted in with the cheap price, we refused to pay the full price.

The bowling alley could have had £16 off us. Yet they ended up with nothing. Just an empty lane.

What can we conclude about copywriting rates from this example?

The value of my work is the time I spend working on it, plus the value I add to each client’s business. However, it’s often unwise to set standard or even example copywriting rates, because they will peg you at one of two price points — the most expensive or the cheapest. Often, neither of these places is where you want to be.

It makes sense to charge based on the value you add, in addition to your time. It’s simply another form of performance related pay. Most employees receive a bonus when they do well — freelancers receive more money when the project they are working on generates greater income.

So no, I’m not going to tell you how much it costs to write a single “page” of copy, or sixteen pages for “any” website. Because every page is different, as every client is different. Instead, I aim to provide every client with value for money, and aim to prove it too

 

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This entry was posted on Monday, May 3rd, 2010 at 3:02 pm and is filed under Blog, Me and my business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

20 comments

  1. Nikolai says:

    Maybe you’d get more business if you charged more because people are more likely to think you’ll do a better job. Then again, business is business. Supply and demand! How elastic do you think demand for copywriters is?

  2. tania says:

    Interesting questions…I do mostly copywriting in my business, but an awful lot of creative directing, liasing with web techs, and general project managing. So what I do is charge hourly, and the first hour is charged at twice what all subsequent hours are charged. And if a company wants me on retainer for any length of time, I give them a break on the hourly rate.

    However! I am well aware that I charge far less than I should. I suppose the reason is because I started out on my own a few years ago, and felt like I just wanted to break into the business. And I’m still in that mindset. Your blog inspires me, though – I think I’m gonna put my rates up. It’s only fair!

    t

  3. al says:

    Thanks!

    There’s a fascinating series of posts going on at ABC copywriting at the moment about the “copy mill” copify where they hook “writers” up with people looking for content and pay the writers between 2p and 4p a word.

    Anyone can see that’s not enough to live on and I’m a definite believer in market economics. Put simpler, if you pay peanuts, you get monkeys. A good copywriter might manage a thousand good words a day = £40. If you’re not paying a living wage, you’re not getting a professional copywriter.

    I’ve never worked out my cost per word before, but I’ve had a look at recent jobs and it’s tended to be between .10 and .20 a word, or £100 – £200 a day. It’s better, but it’s still not much.

    I’m worried my prices might be signaling that I’m a mediocre copywriter, even though my clients will tell you that I’m actually very good!

  4. tania says:

    oh, lads…
    100-200 a day is terrible. I’m glad I saw this, but it really depresses me. Al, you REALLY have to up your rates. Good writing has a long shelf life, and ignites the best marketing campaigns. You’re selling yourself very short indeed. I hate to be the bearer of bad tidings. But you have to hear it somewhere?

  5. Jayne says:

    As someone interested in negotiation, it’s pretty clear you find the money bit of this work difficult or at least, uncomfortable.

    I would, if I was buying your service, see how you have worded your fee page and try to get you to your absolute bottom line.

    They say you should never be the first to suggest a number in a deal and there is a lot of merit to that but it’s one of those things that is entirely dependent on the parties negotiating.

    If you want to retain your smaller clients, cut them great rates but don’t undersell yourself in the wider market.

  6. al says:

    Thanks for the opinions guys.

    When I switched from journalism / sub-editing to full-time copywriting we were in the middle of financial meltdown and I needed to undercut everyone to guarantee enough work.

    Over the last year, I have generally charged £150-£200 per day.

    After listening to your thoughts, I’ve decided to set a standard rate of £200 per day (still £100 less than an agency copywriter).

    I’m still open to negotiation, and any freelancer who says he’s not is lying — but from now on I’ll only be offering discounts on large projects or as rewards to loyal customers who pass me a lot of work.

    I’m still undercutting my competitors and providing a comprehensive service. But I’m taking myself out of the bargain bucket.

    Some things are ‘reassuringly expensive’ for a reason. I feel my new pricing structure combines competitiveness with a confident attitude about my work.

    I’m good. My clients get an excellent ROI from my work — and I deserve appropriate remuneration for my skills.

    Thanks for all your comments.

  7. Danielle says:

    Hi Alastaire! I’ve recently discovered your website via a link on Smashing Magazine. Your website is brilliant.

    To remain on topic, I charge an hourly rate and this works fine for me. As a freelance virtual assistant (in the Netherlands), I can’t charge too much. I don’t overcharge, but I don’t undercharge either. I do make sure to record all my time spent on the job per client {and this includes time communicating via e-mail, phone etc. :} and bill them accordingly at the end of the month. Fortunately, I have several regular clients with whom I have a great working relationship and who appreciate my services and quality of work.

    On a side note, one thing I find very unfortunate is that there are so many freelancers out there who undercharge their clients for their services, thus ruining the market for others. I myself can’t find work outside the Netherlands, mainly because there are many virtual assistants out there, in India for example, who charge two euro’s an hour. Now, how can I (we) compete with that?

  8. Peter Wise says:

    It’s an old chestnut this one. You need to be flexible, but as a general rule, charge more. You’ll lose some potential clients, but end up better off in all senses in the long run.

  9. […] a lengthy discussion on my blog earlier this year, I abandoned the policy of setting variable copywriting rates and settled on a […]

  10. Nick Bulbeck says:

    Hi, Al; came across you by accident whilst researching current charging rates. Like Danielle (25th June), I love your site!

    I’d be interested to know how you fared after changing your pricing structure. The received wisdom in business circles is that you’ll struggle to sell quality to clients you’ve acquired on price. Once a cheapskate, always a cheapskate, in other words. Equally, many pricing strategies are actually the opposite of the one you outline above, in that they rely on the so-called “Goldilocks effect” – clients go for the middle option as an acceptable compromise between quality and price.

    Both of those theories sound reasonable enough. But evidence trumps theory – what has your experience been?

  11. Perry says:

    Due to the economy, I keep my rates 20-30% lower than other A list copywriters.

    If the normal rate to do a 20-page sales brochure is, say, $10,000, I’ll undercut them by charging around $8,000, while at the same time doing a better job heh. :-)~

    This seems to work out just fine for both parties.

    I don’t have to keep calling to find fresh clients, and they do not have to keep calling to find reasonably-priced copywriters.

  12. Richard Watts says:

    I am just getting my copywriting business up and running and I found this discussion very useful. It’s difficult to know where to begin regarding rates and charges, but this has helped me get a better idea of what I ought to be paid for a professional service.

    Thank you.

    Rich

  13. Nick Bulbeck says:

    Bit late in replying to your reply of seven months ago – sorry about this! I do tend to interrupt a lot of people’s blogs (too much time? Or just the ADHD? Bit of both?), and I don’t always get back to read people’s replies.

    I respectfully beg to point out that I didn’t say charging a daily rate makes you a cheapskate (though you’re welcome for my part to repudiate the notion) but that someone who buys only on price is a cheapskate (and that’s something I stand by). In other words, my question was, did you find you lost clients who were only interested in getting work as cheaply as possible?

    Anyway, your notion of charging according to your client’s “appetite for quality” (I like the way you’ve put it) is really interesting. It certainly applies well to a piece of work I’m currently involved with, where the client didn’t initially want to pay for much in the way of quality but in which the research was absolutely necessary.

    Hope you’re doing well…

    Nick

  14. Stella says:

    Thanks everyone for your comments and esp Alastaire for a great article and helpful thoughts. Your article helped me decide something today.

    A prospective client asked me for an estimate on editing work. At base, I’m a copy writer and brand strategist, but I can also do editing for some types of text. So I made a proposal for the time I thought the job would take me, at my hourly rate.

    The prospective client writes back and says that my rate is too high for editing and that other editors he works with charge less.

    I answered that with other clients, I include editing work in my final work, charged at usual rate. So indeed (to refer to one of your comments), it would not be fair to charge some clients one price, and some another. [NOTE: my rate changes depending on the time a project may take. In this case, it was not applicable].

    So I told the person that I could not change my rate. As a show of good faith, I wrote my professional opinion about part of the person’s text (he had already sent it), in hope not to insult him, and to still contribute something. I wished him luck and also wrote that I hope we could work together some day.

    I’m starting out as a freelancer, but I do have a lot of experience from previous jobs. Negotiating is not my forte and when you’re starting out, it’s hard to know what decision is the good one.

    Bottom line on this, I am happy with what I decided. And I do agree that, all things be equal, clients should be charged fairly and as equal as possible. But also as important, you should never sell yourself short.

    Stella

  15. Rob Burns says:

    Very interesting discussion here. I don’t charge a daily rate for my copywriting in Exeter, Devon, but an hourly rate. I appreciate the dilemma between small and big companies. It’s fair and important that a job is charged for the time it takes. Inevitably, some small businesses who are in the grey area between DIYing and outsourcing find it hard to justify the value of a copywriter to themselves. I don’t think we help them appreciate the value of what we do by charging less. Often a copywriter will come up with a whole company message and strategy that substantially affects their business for the better.. We don’t just write, we sell ideas and products and we turn strangers into customers. Think about what a salesman gets paid – and we’re salesmen in print, where what we write has the ability to change many thousands of minds per year, every year, until they stop using the copy.! Anyway, great conversation.

  16. I don’t make my rates very transparent because I am open to discounted rates for small business and that just annoys my bigger clients. I used to make the mistake of looking at “what is my experience worth” or “what is my time worth” now I look at, how much is this client going to make off my work. I was charging $90 for articles that went viral and brought tens of thousands of users to my clients’ sites. Now I charge “by the awesome” and everyone gets value!

  17. Mr Writer says:

    The best resource I have seen on this is a chapter in a book called ‘Write copy, make money’ by Andy Maslen. You can get it on Amazon, and I found it extremely useful.

  18. Mary says:

    Just starting out after a completely different career. This post has been so helpful.
    I suggested a generous day rate plus VAT to my first client but renegotiated to include VAT (at 20% I took the hit as they were not registered). Despite the lower daily rate, the client is great to work with, open to suggestions and the benefit to my reputation will, I hope, be worth it.
    I agree with the per project rate and will get there (soon) without lowering the bar for everyone. Believing in our ‘added value’ is the biggest challenge. After that negotiating on price is easy!

  19. Panzer Kumar says:

    To be honest, this is one of the best post or article i had ever came across. Not just the information but its about the way of your writing, style, pattern, and even the “front” that is used are all amazing and makes it attractive and exclusive. I think i learned quite a lot from this post. I think i should follow you and thank you for your stand alone work. Hats of to the writer.!!

  20. RJ says:

    I have been offered my first freelance copywriting job by my sister who works for a PR agency in Dubai. She wants to split 50/50 of what the client is willing to pay (which I presume has been negotiated by the agency itself). The job is to re-fresh website and directory copy for a hotel.

    Is this a fair and/or usual division of the income?
    (Don’t assume that because she is my sister that she will not be a hard negotiator! It simply means I have extra information)

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