“Is the amount you’re paying me really fair considering all the hard work I’ve been doing?”
My eyes went wide. I hired this freelancer three days ago from Upwork, and they seemed very promising. But in those three days, there were nothing but problems and definitely no results. Needless to say, I was astonished by their question.
Let me be clear: like most clients, I have no problem paying freelancers more money. But I do have a problem with this freelancer’s approach to negotiating a raise after he agreed to the terms just days ago and nothing had changed from my end. It did get me thinking. If this person had been taught how to ask for a raise properly, would their approach be different?
Keep reading to learn how to negotiate a higher freelance rate on Upwork. Grab a pen and coffee. We have some serious learning to do!
How to Negotiate a Higher Freelance Rate on Upwork
Negotiating for a higher rate can be very intimidating. With newer freelancers, we accept whatever terms are given because we need the work. That's how we get underpaid freelancers and unhappy clients.
Let’s get started on how to negotiate, so everyone is happier when working together.
Step 1: Figure Out How Much You Want to Make
Before you can negotiate for a higher price, you need to figure out how much money you want (or need) to be making on Upwork. When you set up your profile, you have to name a specific number as your hourly rate.
When I work with my students, I give them this formula to help them figure out their hourly rate:
how much you want to make per year x 30% = how much you need to make
365 - how much vacation you want per year (include weekends) = how many days you’ll actually be working in the year
Divide your need to make amount by how many days you’ll be working = how much you need to make per day
Divide how much you need to make per day by how many hours you want to work = your ideal hourly rate
And now you have the hourly rate that lets you make enough for bills and a little extra. It's okay if this number is higher than what you're currently charging. It means you need to negotiate your rates with clients more than you thought 😉
Step 2: Decide a Price Range Not a Price Point
When negotiating, I suggest the hourly rate you determined number be your bottom line. What does that mean? That hourly rate is the lowest you're willing to go. You've determined that this rate is what you need to live comfortably. So why would you go below it?
When negotiating, you should offer a price range instead of a specific number. Doing this allows for the actual negotiating to take place. When you offer your bottom line first, you'll end up with a number that won't make you happy. By having a range, you and your client will be able to agree on a number you're both comfortable with using.
Be sure you go into negotiations with this range in mind.
Step 3: Get in the Right Mindset
A lot of my students have negative baggage when they think about negotiation. Remember, this is a mutually beneficial partnership between you and your client. You’re not trying to cheat them by asking for money. It’s completely normal for this conversation to happen before you take on a job.
Think about it this way. When you go to see the dentist about a pain in your mouth, you’re focused on the result: being pain-free. It’s your dentist’s job to identify the source of the pain. It’s also your dentist’s responsibility to educate you, to tell you how they’re going to get rid of your pain.
In this scenario, you’re the dentist, and your client has tooth pain. Both of you come out winning.
Go into your negotiations with a client with this kind of thinking.
Step 4: Build Your Value
Clients come to you with a result in mind. They don’t always know what needs to happen on your end for their project to become a reality. By educating them on what you'll be building for them in this project, help create value in their minds.
The project is no longer as simple as the result. There's a process behind it and steps that need to be taken. The value of the project goes up when you do this well.
For example, say your client hires you to get more followers on Instagram. At face value, this sounds simple. But there's more to it than that. You have keyword research, identifying influencers, interacting with other users, identifying the ideal customer or follower, ensuring the content is appealing and appropriate, determining the best hashtags, and identifying the best posting times.
See how much different that sounds? By breaking it down and explaining your tasks this way on your discovery call, their idea of what you actually do for them grows.
If you're negotiating for a higher rate with a current client, draw up a list of the positive results you've made. If you have analytics, use them. Connect what you've done to increased profit or customer reach. You're reminding them of your worth, how valuable you are to their success, and how you’ve made them look good. You've already demonstrated your value and are refreshing their memory.
This is why I struggled when I was confronted for a raise by the freelancer I hired. There were no results or contributed value in the three days since our contract began.
Step 5: Ask
You've determined what you want to make, your range, your mindset, and built your value with the client. It's time to say the following:
“I understand your strategic goals and needs. This is how I’m going to help you get there [give a quick re-cap of the value building you just did]. I think a good ballpark range for this is [use the price range you figured out earlier in this post]. Does that work for you?”
If the client agrees, get it in writing in your contract.
If not, listen to the reason the client is giving. Remember you are not here to beg for a job. You will be working, they will be paying you, which means both of you can hold your heads up.
Don’t be afraid to ask what price range would be more comfortable for them. You’re still in the negotiation period, so you’re not agreeing to anything yet. When they give you their range, see where it falls in comparison range you’ve given them.
Step 6: Negotiate
If their range is enough close to yours or you want to keep negotiating, say something like:
“I think we’re headed in the right direction. Let’s find a way to make this work for both of us.”
Remind them of the points you've made during your value-building. Don’t be afraid to ask them how much the work you’ve described is worth to them. Continue to negotiate until you’re at a price point that makes both of you happy.
If there’s no room for negotiation, you have two options.
If you haven't signed a contract yet, you’re free to walk away from the negotiations. Wish them luck and welcome them to contact you if their budget changes. You were able to flex your negotiation skills, so you did gain something.
Or you can use this move when you're negotiating a higher rate with their current clients.
If this is a client you are already working with, it’s important to save face for both of you. This keeps your working relationship in tact and it will be appreciated by your client. Try saying something like this:
“I understand times are tough now, but I’m very excited about this job. I think you can see from my plan the value I will bring to this company. If I’m doing a great job, would you be willing to talk about re-negotiating this compensation plan again in 6 months?”
They will more than likely say yes. Remember to say this when they do:
“Let’s get this in writing and we are good to go. I’m really excited about this challenge!” and make sure the re-negotiation is in your contract.
Where Do You Go From Here?
Negotiating for a higher freelance rate on Upwork can be intimidating. By following this breakdown, you confidently go into negotiations with clients. You have the necessary tools to get a raise — or at least get your clients thinking about getting you one.
Before becoming a virtual assistant, I helped companies connect with quality remote workers. Since starting my own business, I've spent a lot of time hiring freelancers on Upwork. So if you've been struggling with finding clients, I have a way to help you succeed. Check out the Ultimate Upwork e-book! You’ll learn my exclusive step-by-step strategy to turn Upwork into a mini-goldmine. Click here to get your copy today.
Not sure if you’re ready to strike out on your own? Do you have everything you need to be successful on your own? I have a free training series for you to check out. You’ll learn to start and scale your own successful virtual assistant business. Interested? You can reserve your seat for it here.
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