How To Set Your Day Rate
In today's episode, I’m going to be answering a listeners question. The question comes from Charles and it is, how do you set your rate card? So I'll be diving into all of my thoughts on that.
Read on for the full transcription or listen to the podcast episode here:
Now I have done other episodes about what you should be charging for your work, so you can go back and listen to those but it's always good to cover this ground because I know a lot of people whether they're just starting out, or they've been in the industry for a while, people still get quite confused over what to charge and feel a bit icky about picking a number. So let me just tell you straight how I picked my rate back when I first started freelancing in the VR industry. I just picked a number and I started charging it. Now, the context that I had at the time, was that I had already had a career in television, so I already knew what the kind of going rates were in that industry. I then transitioned over into freelancing in the advertising and commercial kind of corporate sector with the creative agencies, so I kind of knew the going rates for a freelancer who was a self shooting DOP, or an editor, or a freelance producer, I already knew what the kind of rates were. I also had experience working in house at production companies as a contractor, so I knew what production companies were charging. So I knew for me in England, in the UK, the kind of work that I was going to be doing, although it was going to be totally different because it was now going to be 360 and VR, rather than just traditional film and photos. I don't know why I said photos. I've literally never worked as a photographer but you get the point. Well, that was a different industry, I knew vaguely what people were charging for their creative services so in the UK, anywhere between kind of £350 to £800 pounds, or euros or dollars was kind of average. I knew that people that were operating from their own production companies were charging on the higher end, so the last production company that I worked in house with as a contractor was charging around £650 a day. So I knew coming out of that experience, that I didn't want to go into the freelance world, before I set up my own company charging less than £600 because the way I saw it was like well, I'm doing the exact same work, it's just that I'm not under this umbrella of a production company. I've always found that a bit strange, I've always thought it was a bit weird that people would kind of charge less when they're operating under their own name versus charging operating under a production company name, I've always found that really bizarre. Now, of course, when you're working for a production company that has employees and overheads, and offices, etc all of a sudden, you start to be able to kind of justify, I guess that price in your own head. But that's exactly the point, it's just justifying it to yourself. And so my next point with rate cards, you just kind of have to pick a number and you just kind of have to pick something that feels good for you. I was very used to charging in that range of £500 to £600 before I went out on my own, like going direct to customers, because I'd already worked in the creative industries. I'd already worked my way up, I already had a network, I already had a little kind of, I guess, a portfolio. nNot in this industry (the 360 VR) but I had a bit of portfolio behind me, I had some credits behind me that would probably have justified being a bit more expensive than the average freelancer but the truth is, it was just because I didn't want to work for less and that's the thing. I know people who are as experienced as me and as you know have done as much portfolio work as me that could earn a really nice day rate, but they choose to keep their day rates low, more on the kind of £300 to £400 range, because they prefer to be busy. I've got a friend who would literally rather work every single day of the week, and charge less so that he can be really busy, rather than charging a much higher ticket price and having to spend more of his time chasing bigger clients, because that's the thing, as soon as you start charging more, of course, you're going to have to go after slightly bigger companies, because ultimately, what comes with that price point is more risk, more responsibility. As soon as you start charging more for your services, there is an expectation there, that you are going to be the best.
You know, nowadays, when I charge for work, which is you know more than what I was charging when I first started out, and there comes a huge amount of responsibility, where people expect me to deliver to a very, very high standard. When I work on projects that are five to six figures, there is an expectation there that those projects will deliver a return on those investments. So I have to be on the top of my game to not only deliver my skill set, but also make sure that my clients are implementing the project properly, so that they can actually get a return on their investment. I’m not just rocking up and doing my job. That's the difference between someone that charges less and more. When you're charging more, you're expected to be more proactive, you have to be a leader, a strategist, you have to be able to speak and communicate the language of your customers and clients, you have to almost be an expert in their business as well as your own because it's now no longer about how well you understand the mechanics of the camera. It's now about, how well do you know the implementation of your final product?
If you're selling a virtual tour, if you're charging on the lower end, then yeah, maybe you're the expectation is that you're just going to go and take some gorgeous photos, because you are really highly skilled in that and deliver this final project. But actually, if you're charging a higher amount, then maybe you're expected to deliver the virtual tour that comes with… you know, virtual tours are not my speciality so sorry, if I butcher the language here, but maybe you're expected to deliver it already kind of coded and ready to be embedded on a website. Maybe you deliver it in a slightly different format, so that your client can literally use that URL straight away, maybe you're expected to deliver in three different formats so that they can use it on their website, they can take some of the photos and use it on Facebook too. Maybe you deliver with them a kind of follow up support guide about how to implement it, maybe you check in with them a month after to make sure that they're implementing it and they're tracking the results of it so that you understand how well it's performing for them. All of these extra things that start to justify your higher ticket price, because ultimately, when you're charging more, you need to make sure that your clients are being rewarded for that. If you're charging £5,000 for a virtual tour that even six months ago, you would have been charging £500 for, well that company is going to be a lot bigger, because they're gonna have to have a lot more cash to be able to spend five grand on a virtual tour. But then also, they would probably have had a strategy to roll that out, and they need to be making sure that they're at least making that money back or at least making £5,000 back on that investment. Do you see what I mean? So as soon as you start charging more, just be aware that the risk, the responsibility, the expectation of you, goes way, way up. If you start charging a lot of money and not delivering to that kind of standard? Well, then that's when you get into tricky territory, and potentially your reputations on the line, that’s where you have to kind of weigh things up in your own head, do you want to charge less and just have less responsibility, less risk? Just be able to show up, do what you love, deliver the final product and then walk away and then on to the next one? Or do you like the challenge? Do you like that kind of pressure? I mean, me personally, I now work with such a select few clients that when I'm doing a project, I am stressed out of my mind, the pressure is in tense, it's insane the amount of pressure I'm under, but that's because I'm working on such a high level that actually I now do maybe two/three projects a year and then I can just chill. I'm never just chilling, just FYI but you get my point.
So pick your poison. Do you want to work a little more, charge less for your work and have a few more projects on the go with less risk? Or do you want to work on bigger, more high profile, but less projects? Knowing that when you are working, it's going to be pretty intense? Now, that's just my experience, of course, everyone's going to have their own opinion and their own experience with working at different kind of levels. But in my opinion, that's the difference.
The other thing is just knowing that rate cards, although they're good for you, they're good for you to kind of set in your mind how much you're charging, really, you should be charging a project fee to the client. It's much easier to say - okay, this whole package is going to cost you £3,000 rather than, this whole project is going to take 10 days and that’s 10 days of £300. So that's gonna cost you, £3000. As soon as you start putting a time limit on it and your client then it's very weird, it’s a psychological kind of thing. Maybe I could do a whole episode on this, the psychologically of your client. Sometimes working with time, they can expect more, or they can try and squeeze more into that timeframe because if you say it's going to take about 10 days, and that's why you're charging three grand, but you deliver it in five, some of them are going to go - hang on a second, does this mean this is only going to cost me £1500? So you don't want to get into that habit of letting clients think that there is a correlation between things taking longer and quality because in my mind, those two things are the opposite. I think, you know, sometimes when you pay premium, you expect to get it done faster, because that person is such an expert, so well versed in their craft, so skilled that they can deliver very quickly. Does that make sense?
I hope so anyway, I hope that these thoughts were kind of useful on the subject of rate cards. Again, have a look at some of the other episodes that I've done on the subject of charging for your work. The truth is, just get out there and do it, just get out there, pick a number, you know, see how you go with that and you can always increase, you can always decrease, you might not be able to do that with the same client but when you're just getting started, or when you're just kind of working out what fits right for your lifestyle and your business, it's all trial and error. So don't overthink it, don't let this stop you from getting out there and putting in the work and just getting started. Pick a rate somewhere.
If you're in England, if you're just getting started somewhere in the realm of kind of £200/350 a day. If you're more experienced, then don't be afraid to skirt up more towards the high numbers, and again this is so individual so I don't even really want to kind of give this advice but you know, push more towards the kind of £400/600 range. And again, that's for you personally to work out roughly what you're going to charge but you should always try if possible to be charging a project fee rather than a day rate.
Okay, stopping there because I could literally talk about this subject forever.
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