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Today’s question comes from David, a seasoned freelancer and tech journalist.
I am a full-time freelance technology journalist / writer / corporate writer for the tech space. I have been doing this full-time from the start, and for 16 years now. Last year I earned just into six figures for the first time. I expect that by working fast, finishing as many projects as I can weekly or daily, I can maintain and perhaps increase that income. I seem to have marketing down. I currently have 8 to 10 new potential clients contacting me out of the blue as often as monthly and occasionally within a single week alone. I find that by sticking to the kind of work I want to do and my pricing, about 2 to 3 of every 8 to 10 come to the point of wanting to follow through and hire me. I typically end up having all the work I can handle at least a month ahead, and sometimes into the foreseeable future.
I charge by the job, based on a per-word rate X the word count. Offering hourly rates killed my business and not everyone works with a per-word rate. Everyone is happy to work with a flat rate per project. What I have found is that there is a ceiling in this business on what any client, even a Fortune 100 company in the tech industry will pay. I am finding there are other things they will buy, such as consulting on story ideas, editorial calendar planning, and, for content providers looking to serve a new industry and topic area, and understanding of that technical field and what is important to that readership. I work faster to get more done in the same amount of time while maintaining quality. I am confident, thoughtful, and professional. I could go on about all the things I do to market and ramp up clients, work, and remuneration.
What is the next level for me? What can I add in marketing, content types, subject matter, and approaches to what I already do in order to grow my business and my income?
Let’s summarize with some bullet points:
- Full time journalist & writer in the tech space
- You just hit 6 figures per year
- You have 8 to 10 new leads per month, converting to 2 to 3 sales
- You pick the best work, but could close more sales if you wanted to
- You’re booked up at least a month in advance
- You charge per word
- You’re at the ceiling for what a client will pay
Congratulations on building up such a successful business and reputation. You’re earning well and have a continuous stream of new business. One of the biggest pains in freelancing is the peak and trough of work, and it looks like you’ve got that nailed.
As you can see, working on a per word basis has a ceiling. Even if the content you’re producing is the best in the world – quote $3 per word and watch them balk!
You mention that every client is happy to work on an agreed fixed price. That’s because they know what they’re in for from the outset, and it also mitigates their risk that you would pad out the content (that’s not a criticism of your integrity, more a realistic fear that any client would have on a per X arrangement). That being said, realize that you’re still working on a per word basis in the client’s eyes. The client knows that $700 for a 2,000 word editorial works out at $0.35 per word.
I see a couple paths forward, which are not mutually exclusive:
Take on Staff
Take on a great writer with the right experience, and train them in the specifics of your business. At first, you might want to give them the more generic projects rather than those that require your level of experience and expertise to deliver. You’ll still need to be the proof reader and editor before it gets to your client though, and for that, you get to keep anywhere between 15-35% of job cost, after your writer has been paid.
You can then:
- Continue to grow your business
- Take on more projects and reduce the backlog
- Possibly take on projects that are not your ideal ones but that your own freelancer would be happy to do
- Cherry pick the most interesting or profitable projects for yourself
Here’s an example – if I hire a law firm, I’m quoted $250 per hour. I’m told that partner X is responsible for my account. From then on, the majority of my interaction is with a junior or mid level associate. You think they’re getting paid $250 per hour? Not close! Try $25 or $30 adjusted to their yearly salary. And how much input does partner X seriously have on my account? Probably little to none. As long as the work is done to the highest standard though, and there is a partner to hold accountable – how they handle my account is none of my business.
This is the main strategy that I used to build my own business.
The other reason that this is a great strategy is because it starts to build more of a diverse business brand. Is your business sellable right now, or if you left would all your clients leave too? If you became ill or simply wanted to take an extended trip or retire, what would happen?
If this is a direction you’re considering, then start taking steps now to make it happen. Shift your role from being the business itself to being a senior consultant within the business, with juniors handling your accounts. In future, other senior consultants can be brought onboard.
Lastly, if you don’t want to be on the hook for work that you’re not directly doing yourself, you can refer your overflow business elsewhere and charge a referral commission.
Charge by value, not by effort
Stop being a “tech journalist”. Take a step forward and take on a role that provides the next level of value, using whatever language is appropriate in your specific niche, e.g. “tech content consultant”, “experienced content manager” or “editorial director”.
Try and get away from providing a “metered” service, no matter how it’s packaged. If you now handle content, editing, publishing, story ideas, content marketing strategy and overall brand presentation through content – you’re no longer on the meter. You’re their “director of content” if you like.
Pricing becomes about the value that you provide to your client, rather than the effort that you needed to put in to the work. It’s a big win on both sides.
Getting out of that per-hour mentality was difficult for me, but when I did it, the results were beyond my expectations. I wrote about my experience in doing that here, but as it’s a wordy article, I’ll repost one of the relevant examples:
About 9 months ago I won a fixed price contract where we agreed roughly $9,000 for a project, to be delivered fully tested in 7 weeks time. The price was fair, as that was what it was worth to the client, and he was more than happy to agree and move forward.
The total project took 41 hours – that was broken up into about 35 hours of actual development time, and 6 hours of client interaction, calls, demonstrations and documentation. Milestones were released every week or two. That’s an hourly rate of $220 for the time spent.
If I’d approached the client originally and quoted $220 per hour, he would have shut down, before we’d even got on to discussing the project in more detail.
Perhaps in future, a client with similar requirements will approach me, and I can reuse 30% of the knowledge, experience and framework that I used to deliver the first project but still charge a similar amount. In that case, my hourly rate just shot up to $285.
Now we’re talking about the value that my work provides to a client rather than my hourly rate – a totally different conversation. If a project is worth $50,000 to my client, then my charge of $9,000 is a no brainer. It might take me a month to build or it might take me a couple of days – who cares, and who’s talking about hourly rates any more?
Let’s talk about your own specifics i.e. increasing readership and reach by 2% per month. That has a very specific value to the client.
If an average sale is $900, their conversion rate is 0.8% and their reach is 10,000 per month, their revenue is $900 x 0.008 * 10,000 = $72k per month. If your work results in 2% increased reach per month, then their revenue increases in the first month to $73.5k, and after 12 months, their revenue has increased to $91.5k.
Your work has resulted in a significantly increased overall revenue for the year. Think that charging $6k/month for your services would be a problem? Absolutely not. Take on 3 clients like that and you’re on $215k per year.
Is 2% increased reach a challenge? I don’t know.. I don’t know your industry. I bet that increasing conversions through better copy would be easier though. Increase their conversion rate from 0.8% to 1%, do nothing to increase their reach or reader base, and still net them $18k/month extra.
Great copy by itself is worthless – the value is in the business benefits it provides. Let your first call with a new lead be about their business, revenue, reach and conversions rather than what copy they want. Talk directly to those benefits, align yourself with the company’s revenue goals, and per word charging for content seems like a distant memory.
Questions? Did I forget to address anything? Drop me a line in the comments box below.