“It’s not the crook we fear in modern business; rather, it’s the honest guy who doesn’t know what he is doing.” Owen Young
The lines have been drawn.The time to mince words is over. Every day, our community seems to get more polarized around the issue of low rates. Listen to the buzz. Look at the chatter. Do you think this bubble is about to burst?
Some people are past being polite. They’re frustrated and angry. I like that. If you’re pissed off at something, it means you give a damn and you want things to change.
Some of my voice-over friends are a bit more diplomatic. Recently, I asked a few Facebook buddies a loaded question:
“Is charging low rates a sign of fear and lack of confidence, or just a smart strategy to attract more business?”
Here are some of the responses:
“You left out “ignorance” – some don’t know what they’re worth …” Joe J. Thomas
“It’s not a smart strategy because sooner or later, you will be up to your eyeballs with a multitude of low-ball clients and you’ll be working 15 hours a days, just to make ends meet. If you have to do this to survive, I respect that but you’ll never reach the next level working like this.
For every low rate I have to turn down, it’s usually made up a few days later when I get a new client who gets it. I would rather work with five good paying clients a week as opposed to fifteen who have $50 for their budget.” Terry Daniel ”
I believe it’s mostly be the influx of part timers and hobbyists to VO that drive down rates. They simply don’t depend upon the income to pay their bills. Anyone who has to depend on this work to feed, house and clothe themselves (not to mention a family) could never survive charging such low rates. To them, it’s pocket money. And in some part of the country the cost of living is much lower than in others, so those fewer dollars go further.” Diane Havens
Not everyone agrees. Of course most colleagues would rather do a well-paid job than a low-budget project, but they say there’s no shame in accepting work in the first place. Peter Sandon:
“Many of us are low volume workers, for a variety of reasons, and do not see the need or value in becoming union members. denigrating comments like “bottom feeders” are not only irrelevant but wrong and rude.
For many of us a low paid job is better than no job at all, and there is the chance that someone will hear our voices and offer us a well paid job. Did the “top feeders” start up there? I doubt it, most worked their way up, leaving low paid jobs for new arrivals, and maybe they don’t like the competition coming up behind them, because they may just be better – perish the thought!”
Here’s what Phil Sayer had to say:
“Do low rates ruin it for the rest of us? No, they don’t. They really, really don’t. They mop up low-budget work that others don’t want. If they didn’t provide that service, the money would simply be spent elsewhere, such as print.”
If you’ve been following my blog for a while, or if you’ve read my last article on lowballing, you know where I stand. Today I’ll give you my take on some of the arguments that are being used to defend, excuse or justify low rates. Even though we’re talking about voice-over services, you’ll find the same type of reasoning when other freelance rates are discussed. Here we go!
1. There will always be a high end and a low end of the market. Accept it and move on.
That’s a given and it’s not addressing the real issue. We all know that there’s a market for KIA and Roll-Royce. The point is: how low is the KIA dealer willing to go to make a sale? Is he prepared to sell his cars at a loss, just to get his business going? How long can he keep that up before he goes bankrupt? It’s not a way to get loyal customers either. Next time, they’ll just buy from someone who’s willing to go even lower.
Bottom line: You need to cover your costs and then factor in a profit. But once you get clients hooked on cheap prices, they will never pay full price again.
2. You may lose money on every sale, but you’ll make it up in volume!
That’s like buying melons for a dollar each, and then selling 12 for 10 bucks. Does that make any sense? No matter how many KIA’s a dealer sells, if he sells them below cost, he’s not making any money. A small business owner once said: “Sales numbers feed egos, profits feed families.”
It’s not how much you sell, but how much you keep that matters. Business is a game of margins, not volume. Bargain airlines tried making money on volume. Guess what? They’re gone! To paraphrase Terry Daniel: would you rather do less for more, or more for less?
3. Purchase decisions are primarily based on price.
If that were the case, Mr. client, I will send you your order in two years, okay? I’ll also make sure that it will fall apart in two weeks, and you won’t be getting your money back. Don’t bother calling me, because I just closed our customer service department.
Most people do not buy on price alone. They will talk about price, but what they really mean is that you haven’t offered enough value to justify paying the price you’re asking.
There’s this cartoon with a picture of a brother and sister each with their own lemonade stand side by side. The brother’s lemonade stand reads “Lemonade 25 cents”. The sister’s lemonade stand reads “Lemonade 50 cents (clean water)”.
Do you want your service to be known for being the cheapest on the market, or for high quality? Competing on price is a losing battle.
Lawrence Steinmetz and William Brooks are the authors of “How to sell at margins higher than your competitors. Winning every sale at full price, rate or fee.” They say:
“If you want to earn a solid living in sales, you need to remember that you are going to face a consistent challenge to hang on to a higher price, because you will always find yourself competing with a fool who is going broke cutting prices.”
The key is adding value. If you don’t offer exceptional value, then your product or service becomes just another commodity. People buy commodities on price. If you’re just another web designer, voice-over artist or a car dealership, you’re in trouble. Value means offering more for a higher price.
4. Price does not influence the perception of a product.
If that were the case, why are people prepared to pay thousands of dollars for a Rolex, instead of buying a $50 Seiko? Most watchmakers agree that the Seiko is the better time piece.
Let’s talk about brain surgery. Why don’t people go to the cheapest surgeon in the area? Because low prices make people think he isn’t any good.
Price makes a statement. Cheap = cheap. What does your rate tell the world about what you think you’re worth?
5. Some clients just can’t afford paying higher rates. I can’t change that.
How do you know they can’t pay you a better rate? Buyers lie in order to get you to lower your price. It’s the oldest trick in the book. If they could get it from someone else at a better price, why are they still talking to you?
Stop making excuses for those who don’t respect you enough to pay you a decent fee. Unless you’ve seen their balance sheet, you don’t know what they can or cannot afford. Know your bottom line. Add value.
Don’t compromise so easily. Negotiate. Dare to say NO to a bad deal. Study the art of making the sale. It’s part of being a pro.
6. I don’t set the rates. The market does.
So, what you’re saying is that you don’t take responsibility for your prices? They are forced upon you at gunpoint? You’re just a helpless leaf in the wind?
Let me put it bluntly: The market doesn’t determine your price. Your client doesn’t set your fee. YOU do. It’s just very convenient to tell the world that you don’t have any influence over your rate. If you can’t control it, you can’t change it. You’re a victim of circumstance. End of story. Now go feel sorry for yourself.
Price-cutting is a self-inflicted wound. Should you decide that $10 for an 8 paragraph voice-over script is fair compensation, so be it. Contract law states that parties must agree to enter into a contract freely and must be of sound mind.
I’m not saying that you should ignore the competition or forget about the rate cards that are floating in cyberspace. It’s up to you if you want to look at Odesk, freelancer.com or the $100 voices.com minimum rate, and decide that that’s what “the market” is willing to pay. After all, all the client cares about is price, right? Or you could decide to look at union rates and make those the basis of your pricing structure.
Why not talk to an agent? If you’re any good, she might want to represent you. She’ll fight for a decent rate because if you do well, she will do well.
7. I’m not a sales person. I’m an artist. I don’t know how to negotiate.
No, you’re a wimp and you need a firm kick in the pants! Nobody is forcing you to be a full-time freelancer. But if you tell the world you are doing this to make a living, it automatically means that you’re the head of the sales department, whether you like it or not. Lawrence Steinmetz has this to add:
“The first thing you have to understand is that the selling price is a function of your ability to sell and nothing else.”
Any idiot can cave in at the first sign of buyer resistance and offer a price cut. That’s not selling. That’s being lazy and fearful. It’s a sign that you don’t believe in the value of your product or service. Clients always pick up on that and it will cost you dearly.
Being extraordinary talented in what you do, doesn’t guarantee instant success. Life might have dealt you a pretty good hand, but if you don’t know how to play the game, even the best cards are useless. We all know starving geniuses.
The way I see it, you have two choices. You either learn the rules and become good at playing the game, or you stay out of it. Remember: experience is the slowest teacher.
8. Low end rates do not affect high end rates.
If that were the case, why aren’t rates going up, instead of down? Why have so many auditions turned into a bidding war? Actor, writer and producer J.S. Gilbert:
“While it’s not being broadcast, I’m seeing people I know who have made six figure+ incomes at voice-over for years now, looking at incomes that are fractions of what they were a few years ago.”
I understand that we’ll never get back to the golden days of Don LaFontaine and his limo. Thanks to the internet, the rise in home studios and online job boards, clients no longer have to book union talent at union rates through an agent. Talk has become a lot cheaper.
As Gilbert points out in response to my previous post, a job that used to cost the client $1000, is now offered at $250. But why pay $250 if some fool is willing to do it for $25?
As I said before, once clients are taught they can get it for less, why should they pay a penny more? Give me one reason why this trend does not impact today’s prices, and has never done so in the past.
9. But I’m just getting started. I can’t possibly ask full price.
Some beginners admitted to me that they’ve offered their services for free, just to be able to build a portfolio. Mind you: they were not talking about doing stuff for charity.
I think a freebie only makes sense if you have something else to sell. That’s why a baker hands out samples, and that’s why my custom demos are free of charge. But if you’re giving 500 dollars worth of services away for free, you’re not only creating expectations, you’re in fact saying: this is what I think my work is worth. Meanwhile, you’re robbing a colleague of the chance to make five hundred bucks.
Jason Fried is the co-founder and President of software solution provider 37signals. He recommends you practice charging a reasonable rate from day one. But what he said next was a real eye-opener to me:
“It’s very safe to charge low rates, because you don’t have to prove anything. But as soon as you charge a customer a good price, it gives them the power to demand something from you, such as good quality and great service. Those are the types of pressures you want on you as a small business owner. You want to be forced to be good. Charging for something forces you to be good.”
10. I don’t need to make a full-time income. It’s only a hobby.
If it’s only a hobby, why are you advertising yourself as a voice-over professional? I play the piano, but I don’t market myself as a concert pianist.
If you enjoy reading to other people, go volunteer at your local children’s hospital or elder care facility. You will probably get more appreciation for doing this, than for anything you’ve ever done before.
Most talent I know are only freelancing part-time, because they’re still building what they hope will become a full-time business. A part-time teacher only gets paid less because she puts in fewer hours. Does a part-time cab driver fix the meter so he can drive you around at half-price? So, why should you offer your services at bottom dollar?
Oh… I see. Your partner has a steady job, and the money you make doing the occasional voice-over doesn’t have to pay the mortgage, right?
Guess what? In this economy there’s no such thing as a steady job anymore. What would happen if your partner gets laid off and you become the sole breadwinner? Can your beer money pay the bills? Do you really think you could raise your rates to make ends meet?
Price buyers are the first to look elsewhere. They don’t care about your personal situation. They care about cutting costs. But stop thinking about your own situation for a moment.
There are people who depend on doing this for a living right now, and they think your price dumping is nothing but unfair competition.I admit: you’re quite talented, and by charging these low rates, you are making it harder and harder for them to justify their fees.
I think it’s time for you to think about the bigger picture.
This is not about shameless greed or about becoming filthy rich and famous. This is about being able to provide for your family; being able to send your kids to college and save some money for a rainy day.
Your voice could help sell millions of dollars worth of product. It can introduce people to brilliant books that enrich their lives. Your voice can be the voice of a mentor, teaching valuable skills to e-learners across the globe. Your voice can inform, entertain, sell and assist. Surely, that must be worth something?
However… Those who can’t build value, have nothing left but to compete on price.
Paul Strikwerda ©2011
www.nethervoice.com
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Really?
According to my blogging buddy 
