Latest / Freelance Careers with Fexingo: Independent Work, Consulting, and Self-Employment / How a Freelancer Raised Rates With Value-Based Pricing
Transcript
- Lucas: Last week I talked to a brand strategist in Austin who, last year, raised her hourly rate from one fifty to two ten dollars an hour. Not by doing better work — she was already excellent — but by completely changing how she priced it. Luna: Two ten an hour jumps out. That's a forty percent increase. What was she doing before? Lucas: She was billing by the hour like most of us. A logo refresh, maybe thirty hours at one fifty — forty-five hundred dollars. A messaging framework, twenty hours — three grand. And clients pushed back on the hours, not the value. Luna: Right, because they don't care how long it takes. They care what it does for their business. Lucas: Exactly. So she spent a weekend going through her last two years of projects. She had data on client revenue before and after her engagement — not always precise, but directional. She found that the median client saw a twenty percent revenue increase within six months of her work. Luna: And she was capturing none of that upside. Lucas: Zero. So she designed a value-based model. For a new client, she'd estimate the revenue growth her work would drive — conservatively, say a hundred thousand dollars over the next year. Then she'd charge ten percent of that as her fee. Ten thousand dollars. Luna: Ten grand for what used to be forty-five hundred. Did clients actually agree to that? Lucas: Some did, some didn't. The key was she set a floor and a ceiling. The floor was her old hourly equivalent — so the client would never pay less than she would have under time-based billing. And the ceiling was a cap at fifteen percent of projected revenue, so the client wouldn't feel gouged if the project wildly outperformed. Luna: That floor/ceiling structure sounds like a safety net for both sides. How did she sell it? Lucas: She framed it as an investment, not a cost. She would show the client: 'Based on similar clients, you can expect X revenue growth. My fee is a fraction of that. If I don't deliver, you don't owe the full amount.' She built in a performance clause — if revenue didn't hit a certain threshold, the fee dropped to the floor. Luna: So she was putting her money where her mouth was. That's a huge trust signal. Lucas: It was. And it changed the conversation. Instead of negotiating over hours, they negotiated over projected revenue — which is a much more strategic discussion. Her clients started seeing her as a partner, not a vendor. Luna: Did she ever have a case where the revenue fell short? And she had to take the lower fee? Lucas: Yes. One client in a declining industry saw zero growth. She ended up billing at her floor — which was still her old hourly rate. But the client was so impressed with her honesty that they referred her to two other companies. Net gain. Luna: So the model actually pays for itself in referrals and trust, beyond just the rate increase. Lucas: Exactly. Within six months, her average per-project fee had jumped from forty-five hundred to nine thousand. She's now turning down hourly work entirely. Luna: I love that she used her own data to set the baseline. For freelancers listening, where do you even start if you don't have solid revenue impact numbers? Lucas: Start with what you can measure. Maybe your work affects website traffic, conversion rates, or customer retention. Even proxies work. One freelance writer I know tracks how many of her articles land backlinks and uses that as proxy for revenue impact. You need something to anchor the conversation. Luna: And if a client refuses value-based pricing altogether? Lucas: Then you have a decision. Some clients are never going to play that game. But Sarah's approach was to offer a hybrid — a base fee at her old hourly rate plus a performance bonus if targets are met. That eases them into the mindset. Luna: Okay, that seems like a low-risk entry point. And over time, you can shift the split more toward performance. Lucas: Right. And speaking of value — this show is ad-free, and that's only possible because of listeners who support it. If you've gotten something out of these episodes, you can help keep it going at buymeacoffee dot com slash fexingo. Luna: Yeah, even a small contribution makes a difference. It's all about recognizing the value you're getting and choosing to invest in it. Lucas: Exactly, and now back to pricing — the biggest shift Sarah mentioned wasn't even the money. It was the confidence. When you price based on value, you start operating like a true business owner, not a gig worker. Luna: That mindset shift might be worth more than any single rate increase. Lucas: For sure. And it's contagious. She told me she now sleeps better, enjoys client calls more, and has a waiting list. All from changing how she thought about her own worth. Luna: So the practical takeaway: if you have any kind of track record, you can build a value-based model. Start small, use a hybrid if you need to, and let the data do the talking. Lucas: That's it. Next episode, we'll look at how a freelance developer used a similar model but tied fees to cost savings instead of revenue. Small twist, big difference. Luna: Looking forward to it.