Freelance Pricing Philosophy II: Flat Rates Aren't Equal Rates

In the previous post, I discussed my decision that an hour of my time costs the same, no matter how that hour is used. I'll charge you just as much to write a speech for your CEO as I will to edit your documentation or to observe a meeting or seminar.

But there are some variations on this theme. Just because I charge a flat rate doesn't mean that everyone sees the same pricing schedule. In particular:

1. Different clients get different flat rates, depending on whether a "nuisance factor" enters the calculation;
2. In some cases, I'll have a higher rate for obvious "overtime" situations.

I'll discuss the second item above in my next post, but for now, let's look at how I set the flat rates for different clients.

Naturally, at some level, my time is worth a certain amount (to me, and to my clients), and that's my baseline.

But some clients are going to take their toll, no matter how you estimate your project fees. These are clients:

• whom you have to call or e-mail four or five times to get a simple question answered;
  
• who are always late with their reviews of drafts and proposals, but expect you to keep things moving along on the original timelines;
  
• who keep thinking of little changes to the project, but don't want you to think of them as changes;
  
• who don't get along with their colleagues, and drop a lot of corporate political baggage in your lap when you land in the middle of their "team";
  
• who don't have time to discuss the key issues with you at the begininng of the project, and then want to take it in an entirely different direction late in the game.

When my antennae twitch, in the early negotiations, indicating this kind of relationship is on the horizon, my rates go up. I call it, "the nuisance factor", a surcharge on my base rate to deal with all the little nicks and dings I'm going to acquire during the project. It pays for stress, for nickel-and-dime requests for special help in a million ways that are hard to track but that add up to a lot of lost time, and a lot of wear and tear.

(Of course, if I'm wrong, the project comes in under budget and the client is happy. But I'm usually not wrong about this.)

One client that I've worked with for over 20 years knows about my scheme and calls this, "The Julie Fee". At one time, this client and a woman named Julie ran similar training operations, for different but related corporate departments, and had offices at opposite ends of the hall. My longtime client was great to work with, and this Julie was just a pain, everything was a struggle.

I'd often schedule meetings with each of them on the same day, since I'd be at headquarters and it was just more efficient. I'd meet with my preferred client contact first, and then, as I walked down the hall to Julie's office, my rate went up!

In contract to the "nuisance factor", my dream clients --

• the ones who give me the information I need,
  
• who listen to my suggestions early in the process,
  
• who respond to calls and e-mails, who read my memos and comment on them, who understand what constitutes a material change to a project
  

-- these lovely people get a break. At the very least, we tend to form long-term relationships, and as my rates go up over the years, I'll let them lag behind a little. Working with them is efficient, and pleasant, and that's worth something to me.

So, within each client, they're seeing a flat rate. But not everyone is seeing the same flat rate.

And, by the way, I'd rather make a little less money off a dream client, than a little more money off a nuisance client, any day.