What freelancers do wrong when negotiating budgets

I bet you often hear this phrase from a client: “Unfortunately, your quote is way above our budget.”

As a freelance video editor, I hear this response way too often, but after working with hundreds of clients, I have developed my own technique for negotiating budgets and rates.

Here are my six tips on negotiating a budget with a freelance client.

Tip 1

Always show a breakdown

No matter how big or small your budget quote is, never send only a total figure to the client. Always explain to them how you formed this quote. If your client is an individual or a business unrelated to your professional industry, remember that they often can be clueless about market prices. Your quote can be even lower than your competition offers but still seem very high for the client.

Send them a breakdown of the quote.

Even if it’s not very detailed, it will help the client understand how you came up with it.

Tip 2

Don’t quote a budget over a call

This tip may sound strange, but hear me out. My first introduction with a client happens over a call usually. And towards the end of the conversation, I hear the same question over and over again: “Can you please let us know how much it will cost approximately?”

Never do that!

Firstly, even if you have done similar projects in the past and can immediately answer that question, don’t do that because maybe there is an expense you didn’t think of. It will be much harder to quote a higher price later if you have already given them a number, even if it was just a rough estimate.

Secondly, you don’t know the client yet. If they are a better negotiator than you, they can start bargaining immediately and catch you off guard. I don’t know about you, but I’m not a great negotiator, so I prefer to be cautious.

Whenever you hear this question over an introduction call, tell them you will do the necessary calculations and provide a quote breakdown in a follow-up email.

Tip 3

Don’t bargain

There are many videos and articles out there about persuading the client who thinks your price is too high. It usually involves explaining to them why working with you is an excellent investment for their business and blah blah blah.

I must disappoint you; these techniques work only when you are bargaining around 5-10% of your budget quote. If the client budget is much smaller than what you quoted, all these wolf-of-wall-street-slumdog-millionaire techniques are useless.

If your quote is 5000 dollars, but the client has only 2000 dollars to spend, good luck trying those sales pitches.

Here is a much more helpful technique for you; don’t negotiate the budget; negotiate the scope of work instead.

If the client has 2000 dollars instead of 5, explain to them what they can get for those 2000 dollars.

Tip 4

Stick to your quote

Once you have provided a budget quote, stick to it. Don't give in if the client tries to knock off some amount. Not because you are greedy but because it will look unprofessional. If you have provided a budget quote and a detailed breakdown, agreeing to do the same work for less will mean that you have initially quoted too high. The client will think you were trying your luck and wanted to rip them off.

I’m not saying you can’t offer a discount if you want to, but don’t do it just because the client was bargaining. If you want to reduce your initial quote, see the previous tip - negotiate the scope of work, not the budget.

Tip 5

Don’t compete with price

The most common argument clients use when negotiating a budget is competition. They often say that your competitors are willing to do the same work for much less.

Never fall for this argument.

First, why are you even talking if someone is offering a better price? What’s the point of negotiating costs with you if someone else is offering the same service for a better price right now? It means the client likes your work more, so you are a better fit for their project. So, naturally, your work costs more, too.

Besides, competing with price is never a good idea because it’s a fight you will always lose.

Every time you try to win over competitors by offering a smaller fee, there will always be someone who will offer even less. Don’t offer a better price than your competitors; offer a better service.

Tip 6

Don’t believe in promises

When challenging your budget quote, new clients will often say that they have many projects in the pipeline just waiting for you if you can make a discount for them on this one. Hit the like button if you have heard this promise at least once.

Here is my observation; as a freelancer, I have worked with hundreds of clients, and those promising tens of future projects never returned. It’s usually the opposite - all my returning clients never promised me anything initially; they came back with new projects because they were happy with the service.

So, my usual response to this promise is that I’ll happily give them a “returning client” discount on their second project, but not the first one. If they genuinely have many projects coming up, they’ll happily agree. But they never do.

Discussing budgets and pricing your services can be tricky, especially if you only started your freelance career. If you want some expert help to become a freelancer, make sure to book a consultation with me.