Double Dutch

You’ve probably heard the story of the priest who preached the same sermon every Sunday.

After a few weeks, some of the parishioners got tired of it and demanded an explanation.

“Do you really want to know why I’m repeating myself at every service?” asked the priest. The crowd nodded.

“I will continue to tell you the same thing over and over again, until you take it to heart and do something with it.

If you don’t change your behavior, I don’t see any reason for me to change my sermon.”

Well, I may be the son of a minister, but as a blogger, I can certainly relate to this priest. When it comes to setting rates, I sometimes feel I’m talking to a sea of people with frighteningly short memories and no backbone.

Watch me as I go to my pulpit and address the crowd:

FELLOW FREELANCERS, do you know how much you’re worth?

Do you have a good sense of how much to charge when a client asks you for a quote? Do you have an idea of how much your full-time colleagues are charging… nationally and internationally?

If you don’t, you shouldn’t even think of responding to that online job offer. Don’t you dare come up with an estimate. You have no business being in business until you’ve figured out a basic fee structure.

Imagine going to a photographer to get your headshot taken. Of course you want to know ho much it is going to cost. “Well, let me get back to you on that,” is not the answer you expect to hear from a pro, is it?

How on earth are you going to determine your basic rate?

Let me get one thing out of the way first. It’s not the responsibility of your clients to offer you a good rate. It would be the decent thing to do, but it’s your job to negotiate a fair fee.

That fee is determined by how much you need to make in order to survive and by how much you want to make in order to thrive (today and 30 years from now).

In my experience, most freelancers aren’t capable of giving a clear answer to both questions. Can you? If not, you’re running your business based on guesswork and you’re setting yourself up to be taken advantage of.

Your rate should be high enough for clients to take you seriously, and reasonable enough to still attract business in your segment of the market.

As a beginner, here’s the worst thing you could do: trying to break into the business by working for stupendously low rates. If you don’t know what I mean by a low rate, it’s time you do your homework. Don’t you know that low rates flag you as an amateur?

If you want to be a pro, grow up and act like it!

It is self-evident that as a beginner you’re not yet in a position to command top-dollar, top-euro or whatever currency you prefer. But that doesn’t mean that you should sell yourself short and become a predatory pricer.

Predatory Pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market. It is a strategy for losers and I’ll tell you why.

• Bargain prices attract bargain shoppers. Low paying customers are usually high maintenance customers. Now, you can either believe me, or find it out the hard way. Your choice.

• Secondly, people tend to not value things that don’t cost them much, and they’re much more likely to be dissatisfied with it – regardless of the quality of the product.

• Third: you will attract clients that expect a gourmet meal at a fast food price (and at drive-through speed). As in mountain biking, it’s easier to go down than to go up. Once your price level is set, it is hard to justify a higher price.

• Fourth: predatory pricing is unfair competition. I work as a voice-over professional. A lot of people are complaining that there’s no money in voice-overs these days. I know I’m not the only game in town. Anyone with a mic and a computer can enter this business. While the cost of living is going up, rates are steadily going down.

Dumping your product or service will isolate you from your colleagues and it will negatively impact prevalent prices. Don’t blame the anonymous forces of demand and supply for a steady decline in rates. You are as much part of the problem as you are a part of the solution.

• Last but not least: show some self-respect! If you don’t value your own work, why should I? You have a unique talent. You have invested so much time and money in making it this far. Why would you want to put yourself up for sale in the bargain basement? Don’t you deserve better than that?

Now here’s a question for you:

Would you charge the same fee for the same type of work to a client in Europe and let’s say India?

If you don’t know the answer, that’s okay. Just stop reading and think about it for a moment. The internet has turned every business into a global business. Sooner or later, you’ll have to deal with this issue.

Have you ever heard of the Big Mac index, the Tall Latte index or the iPod index? Clever economists came up with these lists after a lot of hands-on research to illustrate the idea that identical goods have different prices in different markets.

Prices are based on a local standard of living, the price of raw materials, transportation, labor, taxes and frankly, on what companies feel they can get away with. That’s why pharmaceutical companies sell the same drugs at different prices in different countries.

Economically speaking, the product or service you provide is no different than a burger, a cup of coffee or an iPod, iPad or an eye-liner. That means that your client in India is likely to have a different budget than your client in Denmark.

Whether or not you want to work for that budget, is up to you.

You know what you’re worth.

If you’re okay with an Indian salary as a US-based freelancer, just tell me how you intend to make ends meet in the States. I don’t think your local gas station has started accepting rupees yet. But let’s make a deal. Once you’ve chosen to accept a low rate, stop contaminating social media with complaints that it’s so hard to earn a living.

By the way, I don’t blame a Chinese company for trying to hire talent at the lowest possible price. They’re probably working for a US-based firm that has outsourced certain activities because labor is cheap. After all, we all want our Black Friday bargains, so we’re driving that demand for cheap products and services.

I do blame North American or European clients that are trying to make us work for rates that would be only be acceptable in countries like India. I also blame online job boards that enable those clients to set these bargain basement rates. And lastly, I blame so-called colleagues who willingly devalue our business by accepting jobs at these rates.

So, how do you determine your fee in an international context?

Let’s recap. First you have to know what your bottom line is before you do anything else. In other words: how much would you minimally need to charge to turn a profit? You are running a for-profit business, aren’t you?

Once your bottom line is covered, find out how much this particular job would be worth in the country of the client. If you can live with that rate, that’s where you want your quote to be… minimally!

Don’t quote that German client 250 US dollars if the going rate in Germany is 250 Euro. Why should you leave any money on the table?

If you start working for less, don’t be surprised that this same client will post his next project for 180 Euro. After all: we teach people how to treat us, and this is how rates go down. Clients aren’t stupid.

And remember: just because a client needs you, doesn’t mean they can afford you, or that you can afford to work for them.

If you would charge $1000 for a project, and they’re willing to pay $800, it’s totally worthwhile to see if you can meet in the middle. But don’t spend any time trying to sell champagne to someone on a beer budget, no matter where they live.

These would-be customers don’t care that you’re using the latest equipment or that you recently completed a project for a prestigious brand.

They just want to know how low you’re willing to go.

Got it?

Thus endeth my sermon.

Go in peace, and may you lead a prolific and prosperous life!

(and don’t make me post the same story next week, okay?)

Paul Strikwerda ©2011
www.nethervoice.com

PS Be sweet. Please retweet.

Technorati Tags: big mac index, Double Dutch Blog, freelance rates, freelancer, Freelancing, Nethervoice, Paul Strikwerda, setting voice-over rates, voice-over, voiceover, voiceover rates

“I’m being offered $200 to record a 120-thousand word audio book. Do you think that’s a fair rate?”

“A client wants me to voice a movie trailer for $150. Should I do it?”

Not a day goes by without someone asking these types of questions on Facebook, LinkedIn and now on Google+ (the latest way to go around in circles).

Sometimes I stick my neck out and I respond to these questions; especially when I get sentimental and remember the early days of my career.

I was young and unafraid and incredibly ignorant. Back then there was no Internet. Picking brains became my specialty.

On other days I’m not so sappy, as I remember the kind words of my business coach:

“If you’re a Pro, you know what you’re worth. If you’re not, go do you your own homework! You won’t learn a thing if I hand you everything on a silver platter.”

He was right.

These days, getting info has never been easier. Search Google for voiceover rates. You’ll get about 1,370,000 results in 0.15 seconds. How’s that for starters?

MONEY TALKS
Bringing up rates usually spells trouble. Talent likes them to go up; clients love paying less. Where to begin?

The Freemarketeers will tell you to leave everything up to the unregulated forces of supply and demand. After all, it worked well for subprime mortgages, didn’t it? The Interventionists fear a free fall for all. They want rates to be regulated.

Unfortunately, it’s not that black-and-white. Voice-Over rates reflect many variables, and -unless you belong to a union or you have an agent- it can be tough to put a price on your pipes.

Enter a parade of Pay to Plays. You pay for the privilege of being offered the opportunity to audition and bid for projects (together with thousands of other privileged colleagues). Here’s the catch.

As a member, you often have to subject yourself to an agreed price range per project deemed reasonable by that site. Whether or not you choose to accept that range depends on your personal Price Floor.

A Price Floor is a point below which a product or service should not be sold, or else you’d incur a loss. I bet you anything that most people reading these words right now, have no clue what their price floor actually is.

Be honest. Do you?

A EUROPEAN PERSPECTIVE
If you’ve visited my blog before, you know that I have written about U.S.-based voice casting sites and their perceived influence on dwindling voice-over rates.

On January 8th, 2008, a new player entered the market: Bodalgo. Based in Germany, Bodalgo is the brain child of a man who once had a very boring job as the deputy editor of Penthouse: Armin Hierstetter.

Armin’s no dummy.

He studied the existing P2P’s carefully, as he set out to take the good and improve the bad to create something beautiful. Unlike similar sites, Bodalgo is available in German, Spanish, Italian and English (American and British).

Now, if you think that you can buy your way into Bodalgo, you are wrong. No matter the credit limit on your Visa Card, if you sound like crap, you can’t join the club.

Bodalgo caters to clients from all over the world, but because it’s based in Bavaria, it’s a gateway to the European voice-over market. This brings me back to rates. How does Bodalgo compare to its American counterparts?

I (PS) decided to check in with the boss: Armin Hierstetter (AH). Here’s a transcript of the interview:

PS I just saw a project posted on your site in the 100-250 USD range. It made me think: Is Bodalgo going in the direction of its American counterparts, or did I miss something? Has $100 always been the minimum?

AH In USD the minimum range starts at 100 dollars (the Euro has a 50 to 150 minimum range as – for example – a local radio spot in Germany is usually 50 to 55 Euro).

If jobs are posted that are budgeted too low (intentionally or not), Bodalgo contacts the voice-seeker suggesting what we believe is a fair rate. Sometimes the voice-seeker sees our point and is willing to raise the budget, sometimes not. If the voice-seeker does not agree on increasing the budget, the job simply does not get posted. Period.

Of course, we hear many times:

“What? You want me to pay 250 USD for a job that is done in five minutes? You must be insane, you [censored]“

Well, depending on my mood, I sometimes try to explain why voiceovers cost what they cost (knowing that with these types of folks it really does not help at all in most cases), or I simply press the delete button and go on with whatever I am doing.

PS Bodalgo’s been in business for a few years now. What’s your overall take on how voice-over rates are established and where they are going?

AH There are many factors when it comes to rates. Here are few of them (this is by no means meant to be a complete list):

Your voice:

1. Experience
2. Skills
3. Uniqueness (most important if you ask me)

Your studio:

1. Equipment
2. Recording skills

Other factors:

1. Currencies
2. Inflation

I see a link between equipment becoming more powerful yet more affordable, and declining voice-over rates. Let me share three trends with you:

1. The costs for your own studio are coming down, so you can make this beneficial for your clients as well;

2. Because many talents build their own studios, there is much more competition which also leads to lower prices. That’s how the market works.

PS Sorry to interrupt, but clients are saving money due to the increase in home studios. No longer do they need to pay for studio time, an audio engineer/editor and a director.

It is my impression that these savings are simply pocketed and not passed on to the voice talent. In the end, we end up doing more for less. Shouldn’t this give us some leverage to raise our rates?

AH I fully understand that voice-seekers already save a lot of money because they’re used to getting the finished audio from the talent without paying for a studio.

I want to be honest with you. I really think that’s one of the biggest mistakes talents have made for a very long time: They did not charge properly for the studio work, only for the rate as a talent. It will be VERY difficult to change this to an approach where talent charges their normal rate plus editing costs;

3. More and more people of the type “My friends all tell me I should host a radio show,” buy a Shure SM58 microphone and think that their laptop recording is god’s gift to the audio world. Untrained amateurs seem to flood the market.

What’s worse, there are many voice-seekers out there that listen to crap demos thinking they are actually good, because they don’t have a proper recording at hand to compare.

But one thing is for sure: Bodalgo will never start to accept amateurs. Yes, there are a few talents with Bodalgo that have just slipped through the net that might not have passed if I had been pickier the day I activated their accounts. Still, the level of Bodalgo’s talent is much, much, much higher than with any other Pay2Play site that we’ve come across.

PS What’s your advice on how to best play the game? Everybody loves to win an audition, but not at any rate. Do you expect voice-over rates to go up any time soon?

AH If you ask me, the reasons why rates should go up are purely to be seen in costs of living. If those prices would be stable, I’d say it’s fair to assume that our rates would stay stable as well.

With financial markets facing the issues they face at the moment, including all the effects like higher inflation, increased costs for energy, food, rent etcetera, I think that we’ll see rates rising over the next years to cover the rising living expenses.

PS Inflation correction keeps rates at the same level. Talent won’t be making more just because the number on a check is higher. If we wish to increase the amount of money coming in, we need to compensate for the rise in the cost of living, and add e.g. 10% to whatever we’re charging.

AH Well, U.S.-based talent benefits from the weak dollar when paid in Euros by Euro-Zone clients. The opposite is true for Euro-Zone-Talent paid in USD. U.S. clients will not accept higher USD prices just because of exchange rates. It’s really just bad luck for us Euro-Talents. And – if you ask me – the U.S.-Dollar will become much weaker over the next months and years (but that’s a different topic).

So, to cut a long story short: Yes, I see higher rates over the next years. But this is only because everything else will go up in price as well.

PS So, how can we best prepare for the tough years that are ahead of us?

AH 1. If you have not done so already, invest in your own studio.

2. Buy the good stuff (like Neumann or Brauner for mics, for example) as it will serve you well many, many years. Personally, I would no longer waste money on analog equipment. I would solely buy digital stuff (like the TLM 103 D from Neumann).

PS Quality equipment is essential, but owning a state of the art camera does not make one a top-notch photographer.

AH I do appreciate that a cool mic does not make a great voice talent, but this is not where I am coming from at all. I am just a firm believer that successful talent simply needs both: A well-trained voice and great equipment to deliver high-quality audio. There are too many Samsung USB mics out there in my opinion.

I know, of course, that those top shelf brands are pricey. But when you look at what you (and your client) get for the money – it turns out to be an excellent investment.

3. LEARN HOW TO RECORD PROPERLY!!! It’s really, really, really (I mean it) horrible to hear how bad, bad, bad many of the auditions are recorded (hiss, bad miking, bad levelling, bad everything). Use proper headphones to proof-listen your recordings and be super critical about the work you deliver. [Armin insisted this should be printed in bold]

PS Can Bodalgo keep both voice-seekers and voice talent equally happy, or is that impossible?

AH That’s easy: Our main goal is to attract more and more voice-seekers that post sanely budgeted jobs. We want to provide them with the easiest solution available to find high-quality talent without paying any commission. That way, both sides will win.

PS Herzlichen Dank, Armin.

You can reach Armin at armin@bodalgo.com. He is planning to do regular screen casts/vlogs in German and in English, and pass on his take on topics relevant to voice talent.

Paul Strikwerda © 2011
www.nethervoice.com

Technorati Tags: Armin Hierstetter, Bodalgo, Brauner microphones, Double Dutch Blog, Dutch voice talent, Euro-zone, inflation correction, minimum voiceover rates, Nethervoice, Neumann, Neumann TLM 103D, Paul Strikwerda, Pay-to-Play, price floor, Shure, Shure SM 58, subprime mortgage, TLM 103 D, voice casting, voice casting site, voice-over, voice-over audition, voice-over rates, voiceover, voiceover rates

This is the first part of a story, delicately dedicated to those freelancers that have taken up the competitive sport of “lowballing.”

SNOW EVERYWHERE… and Max was in the thick of it. His client was expecting him within the hour, and he was all dressed up but couldn’t go anywhere.

This was the account he had been grooming for months, and today was D-Day: Deal or No Deal. Snow or no snow. He had to get out of that airport.

“This is the worst snow storm we’ve seen in decades,” said the dispatcher. No cab driver is going to go anywhere today. I’m afraid you’re on your own. Max headed out anyway. Perhaps he could hitch a ride with one of the other passengers that was being picked up by brave friends or family members.

As the snow was coming down, visibility was at a minimum. All flights were canceled until further notice. Just as Max was about to head back inside, a black SUV came out if nowhere and stopped at the pick-up spot. The driver rolled the window down:

“Need a ride?”

“How did you know?” said Max, as he hopped in. “I have to get to my presentation. Are you here to pick somebody up?”

“No one in particular,” said the driver. “But I’d be happy to take you.”

“Well, that’s awfully nice of you,” said Max. “Thank God for Good Samaritans.”

“Dream on,” said the driver. “It’s going to be one hundred dollars. Cash only.”

“You must be joking,” replied Max. “They said a cab would cost me no more than ten.”

“Well, why don’t you get a cab then?” asked the driver. “I’ll go and rescue some other grey suit in a hurry.”

“I’ll offer you 50,” tried Max.”

“Listen,” said the driver. “You look like a smart businessman. You and I, we don’t run charities. We’re both entrepreneurs. We see an opportunity. We jump on it. We take risks. Today I am risking my life and my car just so you can get to your meeting. That must be worth something, don’t you think?

“How about 60?”

“You don’t get it, do you?” said the driver. “My economics teacher taught me: ‘When something is scarce, it becomes more valuable.’ You have a major problem. I am offering you a solution. No one else will. If you want to stay, you’ve got to pay.”

“70?”

“Think of it this way,” sighed the driver. “This meeting you want me to take you to, must be important, right? Otherwise, why bother? Is there a lot of money at stake?”

“You got that right,” answered Max impatiently. “I’ve got one shot to seal the deal.”

“Well,” said the driver, “It’s none of my business, but what’s 100 bucks compared to the money you’ll bring in after that contract is signed?”

“Alright,” said Max as he took out the cash. “I get it. Now, drive!”

While the SUV was battling the elements, Max looked at his chauffeur and said: “I gotta give it to you, man. You know what you’re worth and you’re not afraid to ask for it.

Some ten years ago, when Max started his freelance business, he had had such a hard time putting a price on the service he was providing. To help him focus, his startup coach had asked him a couple of simple questions:

1. Do you consider yourself to be a pro?
2. Do you want to run a for-profit business?
3. Do you want that business to grow?
4. What are the costs of running that business?
5. What’s your break-even point?
6. How much do you want to make?

In the past, Max had always treated his services as a hobby. That’s exactly what it was. There was no plan. No purpose. Just a passion. He spent hours and hours helping people and never worried about what to charge. That is, until he lost his day job, his benefits and his security. Perhaps this was an opportunity to turn his hobby into a real business. That’s when things got serious and complicated.

“Here’s the good news,” smiled his coach. “You’ve got clients, don’t you? I mean, you’ve been helping friends all along. If you want to turn your hobby into a genuine profession, why not start close to home. You obviously offer something people want. You already have a market… Go for it!”

“Here’s the problem,” said Max. “I never really charged my friends anything. Most of them gave me pizza and a six pack. I can already hear them say:

Why would we ever pay you if we can get you for free?”

“Good point,” admitted the coach, and he went on: “My brother is a computer geek and he’s crazy about technology. But if he would do every single friend “a favor,” he’d be fixing broken laptops all day and night and not make any money. Free pizza does not pay the mortgage. Besides, I don’t think he’d make the guys happy who repair computers for a living.

Now, I’m not saying that it’s not okay to help out a friend in need, but as soon as people found out that my brother knew how to fix a computer, everybody wanted to be ‘friends’ with him. He had to draw a clear line between real friends and those who were well below the rank of Facebook buddies. That’s what you have to do too, Max. No more giveaways. From now on, you run a business; not a charity.

One of your jobs as an entrepreneur is to manage your client’s expectations. Let me give you an example. If you take on a project you know you can easily do in two days, tell your client you can get it done in three. Guess who’s going to look good when you hand it in, 48 hours later?

That way you not only create the expectation that you can beat a deadline. You’re also showing your client that she’s a top priority and that you really know your stuff. Meanwhile, you’ve allowed yourself an extra day should anything unexpected come up. Does that make sense?

Pricing is one of the most important tools for managing your client’s expectations, as well as your bottom line. Your price point sends a clear signal to your market:

This is what I am worth.

Like it or not, there is a clear link between perceived quality and price. Otherwise, every wine connoisseur would drink Beaujolais out of a box and Pottery Barn would be out of business.

Remember this: Your fee structure will help you attract the kind of customers you want to be working for, and the type of jobs you are shooting for. At the same time it will weed out the folks that cannot or will not afford you; the ones that are most likely to give you a hard time anyway.

Here’s the deal, though: Your fee must be backed up by experience and expertise on one hand, and by a realistic sense of your value in the market place on the other.

Simply put: Be an expert and do your homework. Don’t just pull a rate out of a hat. That’s lazy and crazy. Find out what the competition is charging. Then ask yourself: “Do I want to charge more, less or the same?”

“I can’t imagine it’s that simple,” said Max.

“It’s not,” answered his coach. “Smart pricing decisions require at least three elements:

1. Facts about your own cost of doing busines
2. The client’s evaluation processes
3. Competitive activity

I know you really care about your work, Max. To you, it’s much more than a way to pay the bills. You’re an artist and somehow, some artists (and clients) believe that there’s a clash between creativity and cash. Doing what you love should be enough of a reward.

I don’t think Andy Warhol or Keith Haring would agree with that. Being creative and being commercial can go hand in hand, and since you’re in business to make money, let me give you a simple formula:

Profit = sales volume x price – cost

Have you ever heard of Hermann Simon? He’s a German economics professor and one of the leading experts on pricing. Together with Robert Dolan, he wrote a book called “Power pricing: how managing price transforms the bottom line.” He calls volume, price and cost “profit drivers.”

Simon says something very interesting:

“The customer’s willingness to pay is not determined by the costs of a product but by its performance and resulting value to this customer.”

In other words: when people get a haircut, they conveniently forget that they’re also paying for the rent the salon’s forking over every single month, or for the training the staff receives so they can make every teenage boy look like Justin Bieber.

Clients don’t care about your costs. You should.

That’s why you have to figure out the answer to this question: How low can you afford to go? What is your Price Floor?

A Price Floor is a point below which a product or service should not be sold. In the long term, the price must obviously cover the full costs of a product. Otherwise the seller cannot make a profit and will not survive. Volume never makes up for selling below cost. Ask Dilbert.

Every year, tens of thousands of self-employed people file for bankruptcy because they made one big mistake: they followed a dream and forgot to run the numbers. They are what I like to call ‘under-estimators’. Literally.

Knowingly or unknowingly, they started selling below cost in an effort to drive out the competition or even out of ignorance. Some started giving their work away for free, hoping to get exposure and attract business. Last time I checked, my local baker was handing out free samples but never entire cakes. And between you and me: he doesn’t strike me as a marketing genius.

“Speaking of prices… a friend of mine just bought a brand name watch at a price that was too good to be true,” said Max. “It turned out to be a fake.”

“Were you surprised?” asked the coach.

“Not at all,” said Max. “You get what you pay for.”

“That’s right. In part, price is about perception. That’s probably why your friend wanted to buy that Rolex rip-off in the first place.

Professor Simon puts it this way:

“Price is the economic sacrifice a customer makes to acquire a product or a service. The customer always compares this sacrifice with his perception of the product’s value. (…)

“In essence, a customer buys a product or a service only, if its perceived value -measured in money terms- is greater than the price. If selecting from several alternatives, the customer prefers the one offering the highest net value, i.e. the greatest differential of perceived value over price.”

Go to any tattoo parlor and see for yourself how much pain people are willing to suffer in exchange for the pleasure derived from a name, permanently painted in the perforations of their delicate flesh. Years later, they spend a fortune burning out their ex-hubbie’s initials with a laser beam… turning the man in question into an ex-boyfriend, once removed… But I digress. We were talking about perceived value, weren’t we?

“You’ve mentioned volume, price and cost,” said Max. “How exactly does the market factor into this? Isn’t a certain price ultimately the result of the interaction between supply and demand? That’s not something I have any influence over, do I?”

“Great point,” smiled his coach. “First off…

*          *          *         *         *

THE BLACK SUV slowly made its way through the winter weather.

“Care for some hot cocoa?” asked the driver as he pointed at a thermos.

“Yes please!”said Max.

“And help yourself to a muffin too,” said the driver. “This might take a while.”

“Well, you certainly know how to treat your customers,” remarked Max.

The driver smiled. “Always exceed your client’s expectations. That’s my philosophy.”

“Will you pick me up when I am done?” asked Max.

“Of course,” said the driver.

“I love return business!”

To be continued….

Paul Strikwerda © 2011
www.nethervoice.com

PS Be sweet. Please retweet!

Technorati Tags: Andy Warhol, Dilbert, Double Duthc blog, Dutch voiceover, freelance pricing, freelance rates, Hermann Simon, Justin Bieber, Keith Haring, lowballing, Nethervoice, Paul Strikwerda, perceived value, Pottery Barn, Power Pricing, price floor, pricing, pricing freelance projects, Robert J. Dolan, selling below cost, setting freelance rates, underbidding, voiceover blog, voiceover rates, voiceover talent

If we blame the economy for all of our freelance failures, perhaps it’s only fair that we should credit the economy for all of our successes. After all: we’re hopelessly helpless. It’s the economy, stupid!

In 2000, Cleanthi Peters sued Universal Studios for $15,000. Cleanthi claimed to have suffered “extreme fear, mental anguish, and emotional distress” after visiting Universal Studios’ Halloween Horror Nights haunted house. She said it was too scary.

My European friend Philippe is eager to bring these type of examples up whenever he tells me that Americans live in a country of finger-pointers. I agree.

If we get lung cancer from smoking, we blame the tobacco industry. If we slip on a wet surface, it is the cleaning lady’s fault. If we burn our lips on a cup of fresh WaWa-Java, we sue the company that forgot to print a warning. Heaven forbid we should take some credit for our own actions. Why should we? Blaming someone else could bring in big bucks!

So, what’s next? Are we going to take Smith & Wesson to court for purposefully producing products perfectly designed to end the lives of our loved ones? If my lawyer would fall for that, I would fire that son of a gun on the spot!

A WORLD OF WHINERS
Complaining is convenient. Rants on Talk Radio draw millions of listeners. Campaigning politicians pack stump speeches with it. In the corporate, 9 to 5 hierarchical world of cubicles, board rooms and business lunches, it’s easy to find something or someone to blame when things go wrong. It’s the management, it’s the sales department, it’s the CEO…

But those of you, who are -voluntary or involuntary- making the switch to becoming a freelancer, are in for the shock of a lifetime: all of a sudden, YOU are in charge! You are the management, the sales department, the CEO, the customer helpline and all that jazz. Oops… There’s no one to blame anymore! Whose fault might that be?

No one’s going to make sure you get out of bed on time. There’s no punch clock keeping track of your hours. If you want to play on facebook all day long, be my guest. Tweet to the world what you had for breakfast, if you must. I’m not your boss. You are!

Being self-employed can be a blessing and a curse. You have no water cooler conversations anymore. No paid holidays or health insurance or end of the year bonuses. Freelance freedom comes at a hefty price and you can’t put it on a company credit card.

DAYDREAMS AND NIGHTMARES
In a past life, I used to teach people how to successfully set goals. Most of my students had set goals before and had failed miserably. Take weight loss. Some people professed to be 100% committed to losing those extra pounds, but when it came to impulse control, they had a hard time resisting the terrible temptations of the devious fast food industry.

It was interesting to see people unveil their mental make-up by looking at the way they tried to rationalize and justify their lack of a backbone. It would only take me a few seconds to figure out whether they were taking responsibility, or they were playing the lame blame game. I saw too many people chicken out, and point their greasy fingers at KFC. Apparently, the bucket stops there and we’re all under orders from Colonel Saunders to take his wings and fly.

Taking responsibility for the direction of our own life is not as easy as it sounds. Some folks are better off in the army, taking orders from above. Others depend on the church to tell them what to do (again, taking orders from above). Any Thanksgiving Turkey can tell you that sticking your neck out is risky business. Who knows whether or not you’re making the right choices?

That’s why in the land of the free, many choose to hide behind the mainstream, and go with the flow of the silent, mediocre and often immoral majority… and moan and groan about the terrible deck of cards life has dealt them.

Are you still following me?

HEARING VOICES
In my own line of work it’s no different. I’m a freelance voice-over professional, and colleagues are complaining left and right about the lack of work and low rates. Talk has become cheaper, and some say this is because more and more people think they can make a fortune by blabbering into cheap Chinese microphones. As a result, we’re dealing with an oversaturated buyer’s market.

What people are really saying is this: if we can’t blame our superiors anymore, and we’re not willing to look at our own role, let’s blame the anonymous forces of supply and demand. It’s the stupid economy that’s bringing us down! It’s the invisible hand of market forces, leading to the survival of the cheapest, and there’s nothing we can do about it.

I call this mindset “leaf in the wind-thinking”. Psychologists would probably call it a victim mentality. It’s the most disempowering attitude on the planet. Why would we attempt to change something that we perceive to be beyond our control? It is what it is, isn’t it? Don’t fight it. Accept it. Well, if that were true, American women would still have no right to vote and the descendants of Rosa Parks would still be giving up their seats on the bus.

INTERDEPENDENT
I happen to believe that “the market” is not some anonymous force that operates outside of our sphere of influence. In one way or another, all of us are part of the intricate interplay between supply and demand. As such, WE are the market, and we’re as much part of the problem as we are part of the solution. We either let things happen, or make them happen. Unfortunately, we sometimes make things happen that are not exactly positive.

If you’ve been reading this blog for a while, you know that I have an issue with colleagues who practice blind bidding and predatory pricing. Attempting to crush the competition by underbidding is a losing strategy used by cheap and now bankrupt airlines. Plugging in a number when bidding on an online job without asking any questions, is as dumb as it is destructive.

Some colleagues have urged me to stop advocating for reasonable rates. Their argument goes as follows: it’s a free market and if people wish to sell themselves short, that’s their prerogative. We’re all independent contractors, meaning: every man and woman for him- or herself! The low end of the market does not influence the high end.

Pardon my French, but that’s just a load of smelly stuff. No one lives on an island. We are not independent contractors. We are interdependent contractors.

FOOD ON THE TABLE
“But,” said one of my voice-over buddies, “I just want to put food on the table. I would rather be a cheaper priced working voice-over than an out of work greedy VO!”

This is what I wrote to him:

All of us deserve to make a decent living that allows us to pay our bills, stay in our home, feed our family, take care of their health and education, invest in our business and give back to our community. I assume that most freelancers are running a for-profit business. That doesn’t make us Ebenezer Scrooge.

While negotiating a fee I always like to think in terms of added value instead of the cost of my services. Each and every day, we -the voice over professionals- help sell millions of dollars worth of product and we educate and entertain millions of people. We voice online learning modules; we read to people during long road rips; we greet them as they dial a phone number and we narrate their favorite shows on television.

Big corporations recognize the power of a persuasive voice and that’s why they hire celebrities to be the spokesperson for their brand. As far as I know, very few people have stood up and complained about the paychecks these actors are getting, on top of their movie star salary. I’m sure they’re worth every penny.

But even if we’re not a Jeff Bridges or a Robert Downey Jr., I think we deserve some credit… in the bank and otherwise.

In this time of economic crisis, experts keep on telling us that people need to start spending again, in order to drag this economy out of a slump. If we wish to do our part as loyal, contributing citizens, we should start making more money, so we can pump that cash back into our neighborhoods, our businesses and into our nation.

We should stop using the economic situation as an excuse to underprice our profession and undercut our colleagues. Let’s work together to raise professional standards and raise rates… and help rebuild a sustainable economy in which all of us can thrive.

HALLOWEEN HORROR
Cleanthi Peters never got anywhere with her Haunted House lawsuit. It was driven by fear and you know what they say about that. It’s nothing but False Evidence Appearing Real.

So… do you still feel like a leaf in the wind, or will you use the winds like the captain of a catamaran? I’m not claiming that we can always control the conditions at sea. Things might get pretty rough. But cyclists know that adverse winds create strong muscles.

And one last thought:

The most difficult tests are usually reserved for the best students!

Paul Strikwerda © 2010

PS Be sweet: Trick or re-Tweet!

PPS More thoughts on the economy? Read how I beat the recession.

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Is there a hidden link between price and perception? Do we get what we are paying for? Are we more satisfied when we’ve paid top dollar?

On January 14th, 2008, a team a of scientists from the California Institute of Technology and Stanford University, published a paper called:

“Marketing actions can modulate neural representations of experienced pleasantness.”

It was the result of research I would have loved to be part of. The hypothesis was that the price of a wine affects the way a person experiences it in their pleasure circuits in the brain. It should answer the age-old question: does an expensive bottle of Bordeaux taste better because of the price tag?

The theory was put to the test using functional MRI scans of people while they tasted wine samples they thought were from different wines at different prices, when in reality they were the same. What a mean thing to do!

Lead author Antonio Rangel, associate professor of economics at the Division of the Humanities and Social Sciences at Caltech, said he was “shocked” when he saw the results.

What determines the price of wine? Here are a few factors:

• Profit the wine maker & distributor & seller wish to make
• Resources used
• Expenses such as production cost, labor, transportation, promotion, overhead, taxes
• Skill level of the wine maker
• Uniqueness and positioning of the product
• Market demand and market value
• Experience: the older the wine, the more expensive

SHAKESPEARE
Since this is a blog about the art of voice-overs and not about vinification, here’s my question: “Shall I compare thee to a Chardonnay?” Well… that’s a rather risky idea and I’ll tell you why: a nice bottle of Chardonnay is probably richer and more expensive!

Let me give you a taste from the bottom of the barrel:

Craigslist: “You have an awesome British accent that Americans go crazy for. I want to have an awesome British accent as the voice of the message on my voice mail. It’s really simple and shouldn’t take more than 10 minutes (at most!). Compensation: $20.”

Virtual Vocations: “Voice talent – 60 second recording. You need to be British or sound British. You need to be able to record this at your home with your computer. P.S. I’ll happily pay you for this. I was thinking $5 to $15 by PayPal, since it’s pretty simple.”

Odesk: “Voice over is for a 20 page presentation naration. If your bilingual that will be the best if you able to do only on just mark it in your letter and make you price in concideration. $50 fixed”

LOW AND BEHOLD
Mind you: I did not make these examples up. They come straight from the source.

Is it just me, or is there a serious disconnect between what you and I need to earn to make a decent living, and what these voice-seekers are prepared to pay? Of course you can always argue that these examples are extreme. But are they, really? Here’s my challenge:

Sign up for Odesk; go on Craigslist, VirtualVocations and similar sites, and report back to me in a few weeks. And please, don’t limit your search to voice-over jobs. Ask your friends in IT, copy writing, translation and graphic design to join you in your quest for fair compensation. You might be as surprised as Antonio Rangel. We’re not talking about incidents. We are dealing with a serious trend.

But if you want another example, here it is: the project I mentioned in my last blog, the 304-page book by a former Goldman Sachs partner. The client was offering between $500 and $750 for a recording that would take at least ten hours, if not more.

Not one single reader of this blog got back to me and said: “Wow, that’s a phenomenal payday!” Nevertheless, how likely do you think it is that this producer found his narrator for even less? Four letters sum it all up: V E R Y.

GAME TIME
Did the rules of  the game change, and nobody bothered to tell us? Go back a few years. How did we put a price on our services in the past?

Remember the days we actually had direct contact with the voice-seeker? A personal connection has always been a pivotal part of any business relationship. It’s the grease that makes things go smoothly. Doesn’t it all begin with building trust? How do you do that, if your client is purposely hiding his identity? It’s impossible to do your own background check to find out if this company is even legit.

These days, you can’t even be sure your demo is nothing but a time-wasting test balloon for a campaign you’ll never be part of.  

But let’s continue our flashback. With the rapport going, we could start talking about the requirements of the job. We could ask simple questions such as:

“What sort of a read do you need? Who’s the audience? What kind of person is the narrator?”

It was an opportunity to go beyond the vague descriptions we’ve gotten accustomed to. Descriptions such as: “Male voice. North-American. Middle-aged. Non-Union.” How much help are those?

In the old scenario, we wouldn’t have to second-guess the word count, what market our commercial would play in and details about a possible buy-out… things that anyone needs to know before putting in a serious and realistic bid.

And finally, with all the blanks filled in, we could talk money. We could educate the voice-seeker about the going rates; the value we’re adding and why we’re worth it. We could discuss a reasonable time-frame for the project and counter objections about our fee, and do the back-and-forth that’s part and parcel of the sales process.

It was give-and-take. Negotiate. Communicate. And now? Now, you and I just type a few numbers into the “Your Fee” box and send our hopes and dreams into cyberspace. Someone once said:

“Change is inevitable. Progress isn’t.”

NOT ALONE
Social Media Consultant and freelance writer Deb Ng believes that independent contractors have dropped the ball when it comes to setting rates. Deb writes:

“Did you know many freelance writers won’t give a rate quote to a client and would rather the client set the rate? There are many reasons for this:

• The freelance writer doesn’t know what to charge

• The freelance writer is afraid of bidding too low

• The freelance writer is afraid of bidding too high

• The freelance writer is unsure of the “going rate”

• The freelancer lacks the confidence to request what he deserves”

and she continues:

“Do you know why so many web masters pay $1, $3 or $5 for an article? It’s because they can. They believe it to be a going rate. Since so many freelancers accept the client’s terms and price, the client is able to dictate the payment. If less writers accepted these rates, employers would be forced to pay more money. If you want to break out of the low paying rut, you have no choice but to set higher standards.

By letting someone else set your rate, you’re doing yourself a great disservice. Writers should have an idea of what to charge before embarking on a freelance career. If you enter into it with the mindset that you have to take what is offered, you’ll never be paid what your worth. Remember, you’re freelancing because you want to take charge of your career and your life. How can you do this without knowing how much to charge?”

IN VINO VERITAS
Antonio Rangel and his team discovered that people who were given two identical red wines to drink, said they got much more pleasure from the one they were told had cost more. Brain scans confirmed that their pleasure centers were activated far more by the higher-priced wine.  

One of my favorite BBC programs is “Dragon’s Den”, where “cash-hungry entrepreneurs pitch for investment from some of Britain’s top business brains.”

A young business woman made an excellent presentation and the multi-millionaire investors we visibly impressed with the product and her poise. However, she walked away empty-handed.

Her mistake? She had low balled the amount of money needed. Peter Jones, one of the investors, summed it up like this:

“What a shame. If you had asked for more, I would have taken you seriously.”

Paul Strikwerda © 2009
www.nethervoice.com

PS Do you know how much you’d need to make to break even? Read the next installment for the Double Dutch recommended freelance rate calculator.

Technorati Tags: Antonio Rangel, bidding, determining voiceover rates, does expensive wine taste better, Double Dutch, Dragon's Den, freelance pricing, negotiation, Nethervoice, Paul Strikwerda, Peter Jones, pricing, rates, sales, voice-over, voice-overs, voiceover, voiceover rates

“Attention Voice-Mart shoppers… in aisle 7 you’ll find a fresh selection of promising audio book narrators, ready to read your epic 300-page novel for only $499.99. But hurry! Only today, they’ll throw in free editing. That’s right, a $199.99 value could be yours, absolutely FREE.”

The shrill sound of my phone woke me up out of a bad dream. So much for power naps! Ever since I had helped my friend Fernanda with her website, she regularly calls me because she wants to pick my brain about ‘the business’. Her enthusiasm is contagious, and sometimes I feel almost guilty to be the one who has to add the rain of realism to her parade.

The thing is, Fernanda is incredibly talented. I could listen to her voice for hours, and as it turns out, I’m not the only one. Not only is she blessed with amazing vocal chords; Fernanda has the uncanny ability to take you on a journey to a place where time and space no longer exist.

Her unique talent is only matched by her naiveté about the less artistic aspects of our work; minor details such as contracts, rates, self-promotion… you know, the boring stuff. In other words: she’s the ideal candidate to be taken for a ride. The other day it almost happened again.  

A GENEROUS OFFER
The phone rang. “Paul, I found this amazing project on-line. Can I read it to you?” Fernanda asked.

“By all means”, I replied. “Shoot.”

“Well, it’s for an audio book, she continued, “and they’re offering between 500-750 dollars.”

“Wow” I said. “Why so much? How many pages does this book have? Thirty?”

“Oh, I don’t know” said Fernanda. “Are you going to be a party pooper again?”

“It depends.” I said. “Any other information about this masterpiece? Is there a script for a custom demo? Do you know the word count? Are you sure these are not the memoirs of some perverted, monstrous mind?”

She gave me the web page with the job posting, and I glanced over the details… that were not there. The voice-seeker did offer a link to a page on Amazon.com, and lo and behold, we found the book. It was called “Ahead of the Curve: A Commonsense Guide to Forecasting Business and Market Cycles”, by Joseph H. Ellis*. Even the summary looked promising:

“Economic events are not as random and unpredictable as they seem. This book will help readers recognize and react to signs of change that their rivals don’t see—and win a sizable competitive advantage.”

“Alright. This doesn’t sound like the autobiography of a madman to me. That’s a definite plus”, I said. “Let’s find out who this Mr. Ellis really is.” Harvard Business Publishing gave us the answer:

“Joseph H. Ellis was a partner at Goldman Sachs and was ranked for 18 consecutive years by Institutional Investor magazine as Wall Street’s No.1 retail industry analyst.”

As soon as I read these words, my mind drifted off to a recent newspaper article that had somehow stuck with me:

“Goldman posted the richest quarterly profit in its 140-year history and, to the envy of its rivals, announced it had earmarked $11.4 billion so far this year to compensate its workers. At that rate, Goldman workers could, on average, earn roughly $770,000 each this year — or nearly what they did at the height of the boom.”

How many audio books would I have to narrate, in order to make what the ‘average’ Goldman worker would earn this year alone?

COUNTING PAGES
Back to the book. The Harvard web page also gave us another vital missing piece of information: we were talking about a 304-page hardback.

“Now, how long would it take you to read this book?” I asked Fernanda. “Two hours… a day… a week?”

She admitted that she didn’t really have a clue. That was my signal to go into my Sherlock Holmes mode.

“So far we have established that this guide is over 300 pages long. We don’t know anything about the actual word count, though. That will depend on the font, the font-size, the spaces and the margins. It’s amazing what some academics manage to fit on a page by using a 10-point font.

On the other hand, I’ve seen 400-page volumes packed with graphs and other illustrations, printed in a 12-point font, double-spaced and wide margins. In other words: the pages were filled with fluff.”

Fernanda sounded discouraged. “What do you suggest I do? Go to the bookstore and get this Guide? If I don’t put in a bid within the next five minutes, 4 dozen others will have jumped on this project and I might as well forget about it. And please stop with this patronizing Conan Doyle routine.”

“If I were you, this is what I would do.” I said. “Come up with an estimate, based on the assumption that the average manuscript is printed in 12 point Arial, double-spaced, margin-to-margin. According to the handy-dandy Edge Studio Words-to-Hours Converter, the typical reading time for such a page is one minute and forty seconds. Based on these parameters, how long would it approximately take you to read this book?

300 pages x 100 seconds = 30.000 seconds = 8.33 hours

The next question is: how much would you charge for a minimum of eight and a half hours of work? Here’s the easy answer: you are an independent contractor, are you not? Theoretically, that means that you can charge whatever you think you’re worth. If your name is Julia Roberts, you’ll probably get it. If you’re not, dream on.

Seriously, according to the same Edge studio rate card, audio books “usually pay ‘per completed hour (the length of the final product) rather than ‘per hour’ (the length of time you are in the studio).” This does not include the time you need to prepare yourself for the recording. I spent hours and hours reading and researching my last audio book. It was filled with foreign names; I had to practice unusual accents and I needed to get the script ready.

My scripts are usually packed with symbols and colors. Just as a singer would make notes on where to breathe and where to place accents, I do the same thing. Every character is highlighted in a different color, making it easy for me to change my voice and speech patterns. All of this takes time. Lots of time that you’re usually not getting paid for. 

UNION or NON-UNION?
If we were to take out  the table of contents, the footnotes and any other fluff, you’re probably looking at 8 completed hours on CD. New readers who happen to be AFTRA members, can charge $139.25 per hour, which would give you $1114. The AFTRA rate for experienced readers is $168.25 per completed hour, and that would leave you with a total of $1345 in your pocket.

If you don’t belong to AFTRA, the world you live in looks very different. Bear in mind, Edge Studio explicitly says that their numbers are “pure suggestions for less experienced, non-union talent. Rates reflect average and realistic rates being fairly charged within the industry, and do NOT include editing.” For audio books the rates are:

• Inexperienced narrator – $85 to $140 per completed hour
• Moderately Experienced – $90 to $175 per completed hour
• Very Experienced – $150 to $250 per completed hour

In other words: the very, very inexperienced reader could realistically charge $680 for 8 completed hours (8 x $85). Her colleague on the other end of the spectrum could charge $2000. But we’re not done yet. There are other sources we can use to determine your bid for this Wallstreet saga.

The voices.com FAQ reference rate page has an overview per project category. The indicated range for audio books is 500 – 10000 (even though they’re headquartered in Canada, I think this is in USD).

Voices.com even has a second list of “Average prices, rates and costs”. Based on this overview, the site suggests $300 for a one hour audio book recording session, plus $100 for each additional hour. Let’s say that you’d minimally need a 10-hour recording session to produce an 8-hour audio book. That would mean that this project would bring in $1200 (the client pays an extra 10% SurePay escrow fee).

To make things a bit more complicated, voices.com offers a third list of rates. The suggested rates for audio books in this overview are:

• 1 hr recording session: USD$125 (10 studio hrs. x $125 = $1350)
• Per finished hour of audio: USD$500 (8 finished hrs. x $500 = $4000)
• Per page rate: USD$125 (300 pages x $125 = $37.500)

If you’re still with me, let’s throw one more number into the mix, straight from the voice123 reference rate page. Voice123 clarifies:

“These rates have been calculated by surveying and averaging Voice123 non-union voice over talents with two or more years of experience as voice-overs. Prices in this document are averages for suggested minimums (base rates).”

The average rate per hour of work (regardless of the length of the audio delivered) for a project taking up to 10 hours is $164. So, if we once again assume that 8 hours of completed audio takes at least 10 hours of studio time; using the voice123 minimum rate, a talent could charge $1640 for this project.

GUESSWORK?
I’d be the first one to agree  that these numbers are based on a few assumptions, because the voice-seeker left out vital information when posting the job (either by accident or on purpose). However, the rates I used are in the public domain. “Fernanda, remind me, what book were we talking about again?”

“A 304-page guide, written by former Goldman Sachs partner and Wall Street’s No.1 retail industry analyst that “will help readers recognize and react to signs of change that their rivals don’t see—and win a sizeable competitive advantage.”

“And how much was the budget again?”

“Between 500 and 750 dollars.”

“How many responses did the voice-seeker receive so far?”

“Only 105.”

WINNER or LOSER
“How much do you think the client will end up paying for a narrator? Fernanda asked. “And is there a minimum rate per project?”

“Unless you happen to run into the person who put in the winning bid, you’ll never know,” I said. “But I would be very surprised if all 105 hopefuls would bid the $750 maximum. Can you even call it a winning bid, or is it more realistic to speak of a losing bid? Anyway, voices.com has a minimum project posting requirement for any job posted publicly, and this amount is $100. Voice123 doesn’t have a rate floor.

But let’s not turn this into another Pay-to-Play issue. It gets kind of old, and besides, these guys are only part of a huge market. Take a good look at a majority of the projects posted on these sites. With all due respect for the hard work they put in, I don’t think we’re exactly talking about the high end of the business.  

When it comes to determining reasonable voice-over rates, we’ve only just begun to scratch the surface. If you really want to discuss what you should charge, there are two crucial questions you need to ask yourself first:

1. How much do I need to make?
2. How much do I want to make?

But let’s talk about that some other time. I think I need to get back to my power nap now.”

The comfortable couch was still there waiting for me. I rearranged a few pillows and curled up in a ball. As soon as I closed my eyes, a soothing voice whispered into my ear:

“Thank you for shopping at Voice-Mart. Please come again soon.”

When I woke up, I realized that I hadn’t told Fernanda how much she should quote. Thank goodness you’re still here! May I pick your brain for this one?

- What would you tell her?
- Given the specifics of this project, is a budget of $500-$750 reasonable?
- If yes, why? If no, what would be a number you could live with?
- Would you do it for less? Would you put in a higher bid?
- What do you factor in when bidding on a project like this?
- Do you ever use the rate cards quoted in this article; are these rates realistic, optimistic, outdated…?
- If there’s one thing you could change about this process, what would it be?
- What would need to happen for this change to be implemented?
- What’s preventing this from happening?

Paul Strikwerda © 2009 www.nethervoice.com

*the author of the book, Joseph H. Ellis, was not the voice-seeker who posted the project. However, this was a real project offered on a well-know voice casting site.

PS Is there a serious disconnect between what we need to earn to make a decent living, and what voice-seekers are prepared to pay? How did we lose our bargaining power? And is there a connection between price and pleasure?  That’s the topic of my next article!

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