Pricing Your Services – Is It Acceptable to Have Different Prices for Different Clients?
There are so many facets to pricing your services. As a freelancer and small business owner, you’ll probably find yourself asking a whole range of pricing questions. On top of the common doubts over whether you’re charging too much or too little, you might be wondering how professional and ethical your prices are as well.
The other day, I was asked about whether or not it’s acceptable to have different prices for different clients. Is it OK to be charging one customer a certain rate for a specific service and another client a different rate for that same service?
The short answer is yes! But in this blog post, I wanted to break this question down into its various considerations to show you exactly why there’s nothing wrong with having a range of prices for the same service. On the contrary, if you don’t have different prices for different clients, it probably means that you’re missing out on an opportunity for growth.
Reasons for differences when pricing your services
There are lots of perfectly valid reasons for charging customers differently, but here are some of the main ones…
1) The scope of the work
You might be providing the same service, but the scope of the work itself might be completely different.
It’s important to take into account what will be required of you to complete the project to the standard expected by the customer. For example, will the work you’re being asked to do require a lot of research or is it a fairly straightforward task?
Let’s take copywriting as a service. Depending on the client, you might be expected to write blog posts that involve interviews with experts, in-depth knowledge of the subject matter and keyword research. Or the client might want you to create a post about a generic topic without diving too deeply into it. It’s only natural that you would have different rates for these two clients based on the amount of time you’re likely to spend doing the work.
In the same way, if the subject matter is different, there’s absolutely no harm in charging more for working on a topic you don’t enjoy as much. This can help dissuade clients from proceeding with you if you’re just not really feeling a specific project. But if they do want to work with you, it’ll also enable you to make sure that the job is worth your while.
Another thing to think about is turnaround time. If the client requires an urgent turnaround, you should definitely be charging more than you would for a longer deadline. This is something I discuss in my blog post about reaching the negotiation phase, which looks at the possibility of giving potential customers more than one option when sending them a quote.
2) Who the customer is
The unique characteristics of the customer are also more than enough reason to charge them a different price. Perhaps you’ve noticed that work for a specific customer always seems to be urgent. Or maybe they expect you to hop on frequent calls with them to discuss their projects. All these things should equate to higher rates.
To give you a really simple example of why who the customer is matters, if you worked for an agency and a direct client, you would charge the direct client more because you would spend more time overall working on their projects. You would be involved in more communication before the project begins, then you'd follow up afterwards to make sure they're satisfied. Working for an agency typically means accepting the job, doing the work, and submitting it, so the time you have to put into it is usually less.
But besides this, regardless of the type of customer, the point at which a client joins you on your journey will naturally have an impact on the rate you charge them. As you acquire more experience as a freelancer and small business owner, you should be increasing your prices on a consistent basis over time. This means that there will be moments when your earlier clients will probably be paying you a lower rate, while you might be onboarding new clients at a higher rate. Although you should try to bridge the gap by increasing your prices with your long-term clients too, it’s only normal that they will benefit from lower rates at times.
3) Whether or not the client negotiates
You’ll find that there are some clients who don’t even try to negotiate. They’re happy with your rate, they can afford it, and they’re fine with it as it is.
There are other clients, however, who will attempt to pay a lower price. Sometimes this is cultural. In certain countries, it’s almost expected that clients will ask for a discount from their suppliers, so suppliers already factor this into their initial quote.
Either way, if you enter into negotiations with customers, depending on how they go for each party and the agreement you come to, different clients will naturally end up paying different prices.
How to price your services to account for these differences
Now that we’ve established that it’s perfectly normal to charge different clients different prices, the question is: How should you price your services to make sure you’re not losing out when it comes to your lower-paying clients?
In Charge with Confidence, the method I teach for setting your prices gives you a range to quote between, from your minimum rate to your aspirational rate. I always advise my mentees to start by quoting higher than their minimum to allow room for negotiation if needed. As well as making sure that the negotiation process doesn’t leave you out of pocket, this also gives you the freedom to think about what your client’s budget might be.
Personally, I find that this is a really important part of receiving a positive response to your quote from a customer. If you’re able to put yourself in the client’s shoes and think about what their budget might be, your quote will stand a better chance of being accepted. For example, a large multinational company is likely to have more money to spend than a private individual. The important thing is to pitch your quote higher or lower within your acceptable range.
I hope I’ve managed to convince you that there’s nothing wrong with having different prices for different customers. In fact, if you’re managing your business in the right way and increasing your prices as you gain more experience, these differences are only natural.
If you’d like help to set your minimum and aspirational rates so that you have a range to quote between, you might be interested in Charge with Confidence. During the programme, I’ll provide you with all the support you need to feel confident when quoting and to make sure you’re not losing out as a result of the differences in the prices you’re charging your customers.