How to Negotiate Pricing as a Freelance Web Developer?

There are generally two categories of freelance development activities:

  1. Affordable
  2. ROI-driven

Freelancers often try to mix between both models and often fall back into the first category instead. Unless you demonstrate professional capacity which could contribute to the business, you’ll likely be compared by price instead of value.

I’ve discussed the value-based pricing in detail at Grow Your Business With Your Customers – WP Elevation and in various answers here on Quora. The gist of it is providing actionable business insights and a strategy that would support the business needs of your customer.

Clients are often not fully aware of the requirements of their application. They have a problem in mind and suppose that a web application will solve it. However, there are different ways to approach the problem – some being more effective than others.

With value-based pricing in mind, figure out what the application is worth to your client. Every project aims for one of two things (or both at a time):

  1. Increasing revenue (through additional sales or higher conversion rates), or
  2. Automating processes (saving time that could be invested in something else).

New business applications fall into the first category. Same goes for marketing websites and eCommerce platforms which could sell more than they do now – with the right techniques retaining customers longer and providing the exact information prospects are looking for.

The second type are CRM systems, ERPs, hiring tools, marketing automation platforms and anything else that would save people from manually clicking, browsing around, sifting through spreadsheets or browsing Google every time they need to perform a simple operation.

For value-based pricing, as long as you can ask for the expected revenue upfront or estimate the impact on your work, you can invest more into providing a better solution which would have a better impact on the business processes.

If you want to stick to simple projects and compete by price instead:

  • Make sure you automate as much of your work as possible.
  • Focus on a specific market and build reusable components which could easily be adapted and integrated into new software.
  • Prepare contract and proposal templates, sign up for some stock photo websites and do anything you can in order to save time per project and compile all requirements early on with the least amount of friction.
  • Sign some partnerships or reseller deals for hosting accounts, plugin shops, etc. These would pay for some of the components you provide as a part of your complete solution.

The price-based approach is generally riskier since most of those activities can be automated in a way. This is why there are so many site builders and 3rd party hosted tools available for most problems. ROI-driven deals require expertise which is harder to replace by a robot.

Both strategies can be decoupled into an actionable plan. The rest depends on hustling and attracting prospects in order to create an ongoing sales funnel for your consulting business.