Latest / Freelance Careers with Fexingo: Independent Work, Consulting, and Self-Employment / How Freelancers Can Use a Client Risk Assessment to Raise Rates
Transcript
- Lucas: So there's this freelance IT consultant named Sarah — Sarah Miller — who was doing these complex systems integration projects for mid-sized companies. She was good, she was busy, but she was getting paid the same rate she'd set three years earlier. Luna: That painful plateau. I know it well. Lucas: Right. And what she did differently was she built a client risk assessment. Not a formal contract addendum, but a one-page document she'd walk through with a prospective client before even discussing price. Luna: A risk assessment — like, she's evaluating the client? Or the project? Lucas: Both, really. She created a three-part framework. First, project complexity — how many systems need to talk to each other, how many legacy tools are involved. Second, timeline pressure — is the client trying to compress a six-month timeline into three months. Third, dependency on her unique expertise — is there a specific skill she has that no one else on the market has. Luna: And she used that to justify a higher rate? Like, higher risk equals higher price? Lucas: Exactly. But here's the key: she didn't present it as a penalty. She presented it as a shared tool to preempt problems. She'd say, 'Let's map out where the risks are, and then I'll price accordingly so we both know what we're signing up for.' Luna: That's smart. It frames it as transparency, not greed. Lucas: And it worked. She raised her rate by 30 percent on her next three projects. One client actually thanked her — said the assessment helped them rethink their own timeline. Luna: So how did she build the assessment? Was it a big spreadsheet? Lucas: No, surprisingly simple. She used a five-point scale for each of the three factors — complexity, timeline, expertise dependency. Then she added them up. A score of 10 or below meant her standard rate. 11 to 13 meant a 15 percent premium. 14 and above, 30 percent. Luna: That's really clean. But I wonder — did she ever get pushback? Like a client saying, 'Why am I paying extra for your expertise?' Lucas: She did, actually. One client pushed back on the expertise dependency factor. Said, 'We hired you because you're the expert — isn't that already priced in?' And Sarah's response was, 'My standard rate covers my general expertise. But if you need a specific skill that I've invested years developing and that's scarce in the market, that's additional value I'm bringing exclusively to your project.' Luna: And they bought it? Lucas: They did. She reframed it from a cost to an investment. She also offered to adjust the assessment if they could reduce the risk — like extending the timeline or reducing scope. That gave them a sense of control. Luna: That's the part I like most — it's collaborative. You're not just slapping a surcharge on; you're giving them levers to pull. Lucas: Exactly. And that's where the conversation shifts from 'why is this so expensive' to 'how can we make this project work for both of us.' Luna: Speaking of making things work — I know we don't do ads on this show, but if you're finding value in these episodes, a couple of dollars a month at buy me a coffee dot com slash fexingo genuinely keeps the lights on. No perks, no pressure — just helps us keep doing this. Lucas: Yeah, it really does. And we're grateful to everyone who's chipped in. It's why we can stay independent and focused on practical, real-world advice. Luna: All right, back to Sarah. What happened with the client who originally pushed back? Lucas: They ended up agreeing to the 30 percent premium, but only after Sarah walked them through the assessment a second time. The clincher was when she showed them a comparison — a similar project she'd done without the risk assessment, which had gone over budget because of scope creep. She framed the premium as insurance against that. Luna: So she used her own past failures as evidence. That takes confidence. Lucas: It does. But it also makes the assessment more credible. If you can say, 'I've seen this go wrong before, and here's how we avoid it,' you're not just a vendor — you're a partner. Luna: I want to talk about a counterexample. I know a graphic designer who tried a similar risk assessment, but he priced the complexity factor too high. He was basically charging a premium for any project with more than three revision rounds. Clients felt nickel and dimed. Lucas: That's the danger. The assessment has to feel reasonable. If every single project scores high, clients will see it as a gimmick. Sarah's approach worked because her premiums were rare — maybe one in four projects triggered the highest tier. Luna: So calibration is key. How do you know if your scoring is right? Lucas: Sarah tested it. She ran the assessment on her past ten projects and compared the scores to how those projects actually went. Did the high-scoring ones really have more issues? In her case, yes — the correlation was strong. That gave her confidence to use it live. Luna: So before you ever present it to a client, you backtest it on your own history. Lucas: Exactly. And that's step one for anyone listening who wants to try this. Pull your last ten projects, score them honestly, and see if the scores match your experience. If they don't, adjust the factors or the weights. Luna: What about the presentation? Did Sarah have a formal document, or was it more conversational? Lucas: She used a simple PDF — one page, clean layout. But she never emailed it ahead of time. She'd bring it up on her screen during a video call and walk through it live. That way she could explain each factor and answer questions in the moment. Luna: That's smart. If you send it beforehand, clients might skim it and feel defensive. Doing it live makes it a dialogue. Lucas: Right. And she always started by saying, 'This is a tool I use to make sure we're aligned on what this project involves. It helps me give you a fair price, and it helps you understand what you're getting.' That framing set a collaborative tone. Luna: I think the biggest takeaway for me is that pricing isn't just about what you're worth — it's about how you communicate the value of managing risk. Lucas: Exactly. And Sarah's risk assessment gave her a structured way to have that conversation. She wasn't guessing or negotiating from gut feel. She had a system. Luna: So if someone wants to build their own risk assessment, where do they start? Lucas: Start by identifying the three biggest sources of risk in your typical projects. For Sarah, it was complexity, timeline, and expertise dependency. For a writer, it might be research depth, number of stakeholders, and turnaround time. Pick factors that genuinely affect your ability to deliver. Luna: And keep it to three. More than that and it gets unwieldy. Lucas: Yes. Three factors, a simple five-point scale, and a clear threshold for when a premium kicks in. Then backtest, refine, and start using it with new clients. Luna: One more thing — what about existing clients? Could you introduce a risk assessment mid-relationship? Lucas: Sarah never did. She only used it with new clients. With existing clients, she'd just raise rates based on inflation or market benchmarks. The risk assessment felt too transactional for a long-term relationship. Luna: That makes sense. You don't want to suddenly tell a trusted client that their project is 'high risk' when you've been doing similar work for years. Lucas: Exactly. So this is really a tool for new engagements, where you're setting the terms from the start. Luna: I think a lot of freelancers struggle with pricing because they're afraid of losing the client. A risk assessment gives you a logical, non-emotional reason to charge more. Lucas: And it shifts the conversation from 'how much do you cost' to 'what does this project need to succeed.' That's a much better place to negotiate from. Luna: All right, I'm going to try building my own this week. Complexity, timeline, and — for me — maybe number of decision-makers. Lucas: That's a great third factor. Too many cooks is a real risk. Let me know how it goes — I'd love to hear if it changes how clients respond.