I came across Social Media Marketing expert Peter Shankman’s post below on his blog at P.S. and thought it was very worthwhile for any marketer who is having a tough time trying to decide what they will charge for a job. I commend this article to you as well as any of Peter’s books like Customer Service: New Rules for a Social Media World (Que Biz-Tech)
Social Media marketing How to Get Paid What You’re Worth
“by Peter Shankman
One of my biggest problems is figuring out how much to charge, whether it be for speaking, consulting, or any of my services. I suspect a lot of us have that problem.
We don’t want to overcharge, lest we don’t get the client/gig/project, but then, we don’t want to undercharge, hating ourselves while we’re doing it, knowing that the client would have easily paid more. I used to err on the side of undercharging, and I hated myself for it. I still do, sometimes.
It’s frustrating. I’ve seen it happen out of business situations, as well – Paying six dollars for that trinket in Thailand, knowing that I probably could have negotiated my way down to four. It’s really a pain in the ass, huh?
So how do you make sure to get the right price, whether you’re selling your services, or buying a trinket in some exotic foreign land?
Here are my suggestions for making sure you get paid (or pay) what you’re (it’s) worth:
1) First and foremost: You can always come down in price. You can NEVER go up. If the client wants you, they’ll counter with their offer. In many cultures, the first offer is the opening to let you know that they’re interested – If you accept it, you’re looked way, way down upon. You can always come down from your initial price quote – but I don’t remember the last time you could go up: “OK, We accept your $15,000 keynote fee.” “Yeah, well, I’d now like to charge you $20,000.” Not gonna happen. You can always come down. You can never go back up.
2) How much is your time worth? I’m not going to get into my rant of a few months ago as to why free is not the same as being taken advantage of, but I’ll just say this: How much is your time worth? Sit down and figure it out. Come up with your budget, and if you want to find out how much your time is worth, simply divide your budget by the number of hours you want to work. That’s your starting/break-even point. From then, simply figure out how much more you want to make to decide your profit-level. This takes constant re-jiggering, and changes client by client. But it’s a good start. More…. at P.S”