What is one pricing strategy that has worked well for you as a freelancer or entrepreneur? How do you determine your rates and ensure fair compensation?

One pricing strategy that's been especially effective for me as an entrepreneur is leveraging the "anchoring effect," a behavioral economics principle highlighted by Dan Ariely in his book, Predictably Irrational. Ariely explains that people tend to rely heavily on the first piece of information they receive--the anchor--to make subsequent judgments. When presenting pricing proposals at Incentivize Creatives, I've learned to first introduce a premium-tier option that includes extensive, high-value deliverables and comprehensive support, which sets a high anchor point. Immediately afterward, I offer the mid-tier package--my actual target--that appears significantly more attractive and affordable by comparison. The anchoring approach subtly nudges clients toward this package, making it seem like an optimal balance of value and cost, thus increasing acceptance rates. To ensure fair compensation, I base my rates on a combination of market research, clearly defined project scope, and transparent discussions of value rather than hours. This approach ensures alignment between client expectations and project outcomes. My advice to fellow freelancers and entrepreneurs is to carefully structure your pricing tiers with clear anchors. Doing so not only simplifies your client's decision-making but also helps you secure projects at rates that reflect the true value of your work.

I did a lot of brainstorming when developing my pricing strategy. I started by thinking about the costs I would need to cover by going out on my own, such as paying for software, hiring a bookkeeper, paying taxes, health insurance, business insurance, and contributing to a 401k. I also had to consider the costs of taking time off for holidays and vacations. Then I determined how much I would need to make to maintain or exceed the salary I made in my full-time job, with those costs in mind. And that's how I set my minimum hourly rate. That gave me the lowest rate I would accept while still living comfortably. I don't take any jobs below this minimum rate, or I risk stress and burnout. But I also talked to other freelancers in my industry to get advice on what to charge, and that helped me set my starting point, which is higher than my minimum rate. I make adjustments depending on the complexity of the job or the size of client - for example, I'll pitch a lower rate for small businesses with basic needs or a higher rate for a large website with hundreds of thousands of pages and complicated technical issues.

I'm a big fan of monthly retainers. It's one of the easiest ways freelancers can set themselves up for financial predictability and stability. I determine my rates based on the project scope. I'll charge hourly if it's an article or eBook that requires extensive research and interviews with thought leaders. If it's a shorter, more straightforward blog, I'll most likely charge a flat fee. I always am mindful of my time, as well as the client's budget, when determining my rates.

As a freelancer, my most significant shift in pricing strategy was providing a quote for every new project that's higher than the current rate. Taking on a new client is always a big deal and it's a lot easier to incrementally increase your prices with every new win. This is how you find yourself on an upward trajectory, not stagnating at the bottom end.

Depending on the client, I like doing a mixture between anchoring estimates and contrast pricing. Contrast pricing means, to contrast their current cost to what you will cost, for example: What the customer currently does costs them 300k per year, that is 25k per Month. Me helping them to rebuild their strategy costs them, let's say, 5k per month for a few months. That is a 1 to 5 in costs. Basically a no brainer what they get when comparing to what they are currently spending. The phrasing is more in the realm of: This project will probably cost you between 20k and 40k, does that work for you? 40k being our high anchor. They will either have a budget limit and find a middle-ground, or agree, which will be a good price for you. If they start to aggressively lowball the offer, it becomes usually clear that we probably will not want to work with them in the first place.

In order to get my hourly rate, I use a pricing calculator. I enter in all my expenses, account for taxes and insurance, and make sure I add a profit percentage on top. This is my base wage. Once I have that figured out, I can come up with project rates. You'll get better at estimating hours the longer you do it. One pro-tip is to always overestimate by a little, because unexpecteds always pop up.

A three-tier approach is helpful when offering services. I think it's important to consider two main factors: the time you'll be spending to complete the work and the value of your time, but also researching competitors and understanding the market rate for the same services. Once informed of both, you'll be able to marry the information into an offering that feels fair and right to you.

One pricing strategy that's worked well for me is value-based pricing. Instead of charging by the hour, I price based on the outcome and impact I can deliver. For example, if I'm running advertising campaigns and can improve a client's conversion rate by 2-3x, that can lead to exponential revenue growth. In that case, pricing based on the time spent wouldn't reflect the true value created. It's important to show that in advance and also outline the opportunity cost of not optimizing the campaigns (what usually means wasting money to advertising platform and leaving money on the table)

Know your value, but also know your client's value. You can charge a finance company more than a school for the same work. That is not meant to mean take advantage of people, but understand, your cheap price for the school, is too cheap for the financial institution to take you seriously. Start at a price point that is reasonable for the market, again, Manhattan is a different rate from Alabama, so price well. Then, when you get to the client, if they don't argue about the price, either you are low or within range. This means the next client you need to up your billng rate by 10%(or more) and see what happens. Once you start hearing from multiple prospects, the rate is high, you have probably found a comfort zone. For them. You may need more money still. That is another story to be told.

One pricing strategy that has consistently worked for me as both a media entrepreneur and founder of www.reelmedia.agency is value-based pricing backed by performance metrics. It's not just about what a project costs--it's about what the result is worth to the client. How I Use This Strategy (And Why It Works) Instead of charging hourly or flat project fees out of the gate, I start by deeply understanding what success looks like for the client. Is it lead generation? Revenue growth? Brand positioning? For example, in one campaign with a financial client, our videos drove over $400M in assets under management. That kind of result is not priced the same as a pretty video with no strategy behind it. Once the value is clear, I tailor pricing accordingly. We might propose a fixed fee with performance-based bonuses (e.g., lead quality, conversion lift, ROAS), or tiered packages where clients can scale results by investing more. This allows clients to feel confident in their ROI--and gives us incentive to overdeliver. How I Determine Rates and Ensure Fair Compensation Here's the process I follow: Anchor to Results: I reverse-engineer pricing based on potential impact. If a campaign is expected to bring in $5M in new business, we won't price it at $5K. We'll match the fee to the level of strategic thinking, production value, and market reach required. Scope Clearly: Every project has a defined scope--deliverables, timelines, and success metrics. This prevents scope creep and builds trust. Present with Confidence: I position Reel Media Agency as a growth partner, not a vendor. We're here to elevate your brand and drive measurable results--not just make pretty content. Build in Upside: For long-term clients or pilots, I sometimes offer lower initial pricing with built-in performance triggers. If we help drive results, we scale together--and everyone wins. Why This Strategy Benefits Clients Too Clients want impact, not just output. Value-based pricing shifts the conversation away from hours and toward outcomes. That's empowering for both sides--it allows for more creativity, deeper collaboration, and the kind of results that make everyone look good in a boardroom. If you're a freelancer or entrepreneur, I'd say this: don't just charge for what you do. Charge for what your work does. --Jody B. Miller Founder, Reel Media Agency jb@reelmedia.agency

Quality work takes time, and is therefore more costly. But sometimes, price is more important than quality copy. So what I do is I quote the work as I see would be optimal: these hours, for these tasks for this level of work. If price is an issue, I give options to do less tasks in less hours. Especially now in the age of AI content it's essential to be transparent a put how you work.

I use what I like to call "confidence pricing." I price based on the confidence I have in the results I deliver. I think too many of us, especially women entrepreneurs, undersell ourselves out of fear. So I flipped the script--I looked at what my clients actually gain from working with me, especially those buying new construction or needing a strong negotiator in a tough market. That value includes access to exclusive listings, expert handling of builder contracts, and strong relationships with other realtors. I determine my rates by starting with time investment, then factoring in the level of risk, market demand, and the emotional labor of guiding people through huge transactions. I make sure compensation reflects that effort. And honestly? I check in with myself regularly: "Does this fee feel like I'm respecting my work?" If the answer's no, I adjust. Confidence in pricing leads to clients who respect what I bring.

We use a Tiered Commission Strategy at Salon Le Volume which creates a sustainable pricing model for salon success. Pricing with Purpose: How a Tiered Commission Model Creates Sustainability and Fair Pay in the Salon Industry In the beauty business, pricing is more than just numbers -- it's about building a structure that supports profitability, rewards performance, and honors the true value of our work at the salon. Implementing a tiered commission strategy has helped us do just that. This model allows stylists to earn more as they generate more revenue, creating a transparent pathway for growth and success. It also ensures that we maintain healthy margins by factoring in the true cost of doing business: * Leased space and utilities * Backbar and product usage per service * Administrative and marketing overhead We then align our pricing with competitive local market rates, ensuring our services remain accessible while our team receives fair, sustainable compensation. Why It Works: * Stylists are motivated to grow because their income grows with them * The business remains financially sound due to built-in cost analysis * Clients benefit from consistent, high-quality service rooted in value rather than volume Why It Matters: As more salon owners strive to create equitable workplaces, this model offers a path to both profitability and empowerment -- proving that ethical pricing and entrepreneurship can absolutely coexist. At Salon Le Volume, our tiered commission model isn't just a pay structure -- it's a philosophy. It reflects our commitment to fairness, transparency, and long-term sustainability for both our team and our business. By pricing with purpose, we're able to honor the true value of our craft, empower our stylists with real earning potential, and create a salon culture rooted in growth -- not burnout. This model proves that when we lead with intention, everyone wins!

One pricing strategy that transformed our agency's growth was implementing value-based pricing instead of hourly rates. When I founded Origin Web Studios, I noticed many clients were fixated on the number of hours rather than the actual impact our work created. We now price our website development and digital marketing services based on the measurable value clients will receive. For example, an e-commerce site that will generate $500K in annual revenue deserves a different investment than a simple brochure site for a new startup. This approach requires deep client conversations to understand their business goals, revenue targets, and competitive landscape. We create customized proposals showing expected ROI timeframes rather than itemized hour estimates. The results have been remarkable. Our average project value increased by 65% while client satisfaction improved because conversations shifted from "how much time will this take?" to "what results can we expect?" We're no longer competing with low-cost providers since we're selling outcomes, not hours. To ensure fair compensation, we track all projects against profitability targets and regularly analyze which types of clients and projects drive the best results for both parties. This data helps refine our pricing framework continuously. Value-based pricing isn't just about charging more--it's about aligning our success with our clients' success, which creates stronger, longer-lasting partnerships.

I consider what I'm worth on an hourly basis, and calculate that into a fixed rate for the client. This works because I don't get punished for efficiency, but they don't get punished for inefficiency. A fair rate is reached and I'm incentivized to complete the project quickly, timely, and quality. This way, if I miscalculated the effort, its on me, and it allows me to adjust my pricing strategy for the future and be more careful with developing a project scope.

I run an SEO agency, and early on, I wasted hours crafting perfect proposals--only to realize the lead wasn't ready to buy, didn't value SEO, or had a $100 budget and a $10k dream. So now, pricing comes last. First, we pre-qualify. Do they understand SEO? Do they have a healthy lead value? Can we realistically get them a positive ROI? Once that's clear, we walk them through our sales presentation: what we'll do, what we won't, timelines, even a money-back guarantee. Then we give two options--one is cashflow-friendly, the other is cheaper upfront. No yes or no. Just option A or B. Fair compensation isn't just about charging more. It's about picking the right client and building in enough margin (we aim for 50% profitability) before the sales call even happens. The surprising truth? The more selective you are, the easier it gets to charge what you're worth.

ne pricing strategy that's worked well for me is value-based pricing. Instead of charging by the hour, I price based on the outcome I'm delivering. If the work helps a client generate leads, save time, or increase conversions, the rate reflects that impact. To determine my rates, I start by understanding the client's goals and what success looks like. Then I look at the market rate, the scope, and the potential ROI for the client. That way, I'm not just covering my time, I'm aligning with the value I bring. It's helped me attract better clients, reduce scope creep, and feel more confident in the work I do.

One pricing strategy that's worked surprisingly well for us is using the decoy effect--intentionally designing one of our pricing tiers to make another one look like a far better deal. Free: 5 month essays Lite-type $7.99: 25 essays/month Pro - $14.99: 500 essays/month In this case, of course, the lite plan is the decoy. Yes, it does provide value, but as soon as someone positions it against Pro, the decision becomes evident: for just $7 more you get 20x the capacity. That contrast pushes most users toward Pro, even if they weren't intending to spend that much. --- Reasons why it works: People don't know what a 'fair price' is, but they recognize a good deal when they see one. And that's where the decoy acts in the middle-sentence anchoring of the value in regards to the decoy making the better price plan look as if they are really clear-thinking and effective. --- Advice for Others: If freelancing is building product, structure with three options: A free or basic one that builds trust A middle-tier that's just okay (your decoy) A top-tier that clearly offers way more value for slightly more money It's not about tricking anyone; it's about helping them make decisions. Done truthfully, the decoy effect can lead users to the plan that truly does benefit them more and keep your price model healthy.

Tracking my time completely changed how I price my services! Before, I was estimating based on guesses--how much a service might be worth or how long it might take. But once I started tracking my time, I had real numbers to back up my pricing. This helped ensure I was charging enough to cover taxes, business expenses, and still make a profit. Now, depending on the project, I either: * Estimate how many hours it will take and multiply that by a healthy hourly rate, or * Quote a flat project rate that reflects the true value of the service I'm providing.

Tiered-package pricing: Allow the prospect to select the package that aligns best with their needs and budget. This results in creating three distinct options for them. An excellent strategy for ensuring the prospect can easily conclude which option suits them best. Fair rates are based on estimating the dollar-generating value of the services provided and then charging a fraction of this figure.