Latest / Freelance Careers with Fexingo: Independent Work, Consulting, and Self-Employment / How a Freelance Consultant Raised Rates by Offering a Pay-What-It's-Worth Pilot
Transcript
- Lucas: So there's a pricing move I've been wanting to dig into — it feels almost counterintuitive, but a consultant I was reading about used it to raise her rates by thirty percent in one year. Luna: Okay, you have my attention. What's the move? Lucas: She offered a pay what it's-worth pilot. Instead of quoting a fixed fee for a short engagement, she told the prospect: try me for three weeks, and at the end, you decide what it was worth to you. She gave them full control of the price. Luna: That sounds terrifying. What if they pay you nothing? Lucas: That's the obvious risk, and she acknowledged it. But she structured it carefully. The pilot had a very specific scope — a process audit of their client onboarding, with clear deliverables. And she set a minimum floor for herself, just not a public one. Luna: So she had a number in her head that she wouldn't go below, but she didn't tell them. Lucas: Exactly. And the client ended up paying her more than she would have quoted. She had been planning to ask for four thousand dollars for that pilot, but they paid six thousand. That's the pay what it's-worth effect — when people feel trusted, they often overvalue the work. Luna: There's a psychology to it. It's like when a restaurant lets you name your price for a meal, and people often pay more than the menu price because they want to be fair. Lucas: Yes, and there's research on that. In pay what you want experiments, the average payment is typically above the seller's minimum, especially when there's a personal connection and the buyer feels they're supporting a local business. This consultant had already built rapport with the prospect over two calls, so it wasn't a cold transaction. Luna: But how did she even get the client to agree to that structure? Most clients want a number up front so they can budget. Lucas: That's the key. She pitched it as a way to de-risk the engagement for them. She said, 'You don't know me yet, and I don't want you to worry about overpaying for something that might not deliver. So let's do a small pilot, and you decide what it was worth.' That's a really strong trust-building move. Luna: So it's not just about the pilot itself — it's about the signal it sends. You're basically saying, 'I'm so confident you'll see value that I'm letting you set the price.' Lucas: Right. And that confidence is attractive. She landed that client, and they ended up signing a six-month retainer at a rate that was thirty percent higher than her previous average. The pilot paid for itself many times over. Luna: I love that. But I'm also thinking about the flip side. What if she had gotten a cheap client who paid her the minimum? Would she have been stuck with a low-paying client? Lucas: She had a clause in the pilot agreement that after the pilot, they could negotiate the retainer, but the pilot payment itself didn't set a precedent. She also retained the right to decline the full engagement if the pilot didn't go well. So she wasn't locked in. Luna: That's a smart safeguard. So the pilot is kind of a filter — it attracts clients who appreciate value, and it weeds out the ones who just want the cheapest option. Lucas: Exactly. And that's a broader lesson for freelancers: the clients who are drawn to a pay what it's-worth offer are the ones who already understand that good work has a cost. The ones who haggle over every dollar are probably not the ones you want to work with anyway. Luna: Speaking of clients who understand value — I've been thinking about how this connects to something you mentioned a few episodes ago about firing a client. It's like you're filtering for the right kind of client from the start. Lucas: Yeah, this is a way to avoid that problem before it starts. Instead of firing a bad client later, you're attracting better clients from the beginning. And that's the kind of thing that can change your whole business trajectory. Luna: So what would you say to a freelancer who wants to try this but is nervous about the risk? Lucas: Start small. You don't have to offer it to everyone. Pick one specific type of project where you're really confident in your value — maybe a short audit, a workshop, or a one-page strategy doc. Offer it to a prospective client you've already built rapport with. And set a minimum in your head, so you know your bottom line. Luna: And why do you think it works so well? Is it just the trust, or is there something else going on? Lucas: I think it's also about value perception. When a client sets the price based on what they experienced, they're making an active judgment about your worth — and that anchors their perception for the future. It's not just a fee you're charging; it's a valuation they're endorsing. Luna: That's a powerful psychological shift. They're not just paying you — they're telling you and themselves that you're worth it. Lucas: And that makes it easier to raise your rates later, because they've already mentally placed you in a higher value bracket. This consultant went from around a hundred and twenty dollars an hour to over one hundred and fifty, within a year, mainly because of that one pilot and the retainer that followed. Luna: That's a real jump. And it's not just about the money — it's about the kind of work you get to do. When you're valued more, clients trust you with more interesting problems. Lucas: Exactly. And that's the kind of thing that makes a career feel sustainable, not just profitable. Luna: You know, this reminds me of something we've talked about before — a couple of dollars a month is genuinely what keeps these episodes going. If you've gotten something out of our conversations about pricing and client trust, buy me a coffee dot com slash fexingo helps keep us independent and ad-free. Lucas: Yeah, it really does make a difference. Even a small amount adds up and lets us keep digging into these real-world examples. Luna: And we're back to the pilot model. So what are the biggest mistakes you see freelancers make when they try something like this? Lucas: The biggest mistake is offering a pay what it's-worth pilot without a clear scope or deliverable. If it's open-ended, clients won't know what value to assign. You have to define what success looks like in advance. Luna: So it's not just 'help me with my business' — it's 'here's a specific problem we'll solve in three weeks'. Lucas: Right. And the second mistake is doing it with a client who hasn't already shown they respect your expertise. If they're only interested because it's cheap, they'll likely take advantage. You want a client who is already leaning toward working with you. Luna: So the pilot is more about reinforcing an existing relationship than it is about winning a skeptical one. Lucas: Exactly. And the third mistake is not using the pilot as a springboard. You have to have a next step ready — a retainer, a larger project, a referral. Otherwise you're just doing a one-off and you lose the momentum. Luna: So you're not just lowering your price temporarily; you're using it as a strategic entry point. Lucas: That's the whole game. The pilot is the hook, but the real value is in the relationship that follows. And that's what moves the needle on your income. Luna: I also wonder about the tax side. When you let a client set the price, how do you handle invoicing and records? Lucas: It's still a normal invoice — you just put the amount they decided on. You have to document it properly, but there's nothing special about it in terms of taxes. You report the income as usual. The tricky part is making sure you don't undervalue your work for tax purposes; you still need to charge a reasonable rate, and the pilot payment should reflect that. Luna: So you're not legally allowed to just accept whatever they give you if it's ridiculously low? Lucas: I mean, you can, but it's not smart. The IRS and other tax authorities look at whether you're charging an arm's length price. If your rates are way below market, it could raise red flags. So you need to set a floor that's still within a reasonable range. Luna: That's a practical note that a lot of people might not think about. Good to bring that up. Lucas: Yeah, it's one of those details that separates a smart experiment from a costly mistake. But overall, this pricing strategy is a powerful tool for consultants who want to build trust and raise their rates over time. Luna: So if someone is listening and thinking about trying this, what's the one thing they should take away? Lucas: Just start with one pilot, one specific deliverable, and one client who already likes you. Set your internal minimum, define the scope clearly, and see what happens. The worst case is you get paid what you thought you were worth — the best case is you get paid more and land a better client. Luna: That's a pretty good deal. I like that framing. Lucas: And remember, the goal isn't just to raise your rates for one project — it's to shift how clients perceive your value for the long term. This pilot approach does that in a way that feels fair to everyone.