Last Saturday I revealed that market leader voices dot com will be introducing a $5 minimum rate in response to “changes in the marketplace.” They say they’re exited to do this to accomodate non-broadcast clients with small projects, and to “drive more work” to their members. (click here to read my reaction)
As usual, my story got a mixed response. Some of you were outraged. Others appear to be indifferent. Some don’t want to bite the hand that feeds them. But there’s always a group of people telling me that it’s a free market and I should mind my own bloody business.
Of course people are free to shoot themselves in the foot, but I know of no other profession where colleagues (and I use the word loosely) denigrate other colleagues simply because they’re advocating for decent rates.
Those who favor higher fees are regularly labeled as greedy, unrealistic, elitist, old school, or as misguided union members.
Since when did it become uncool to want to make more money, or at least earn a living wage?
Is it bad for business? Would it tarnish our reputation? What are people afraid of?
VOICE OVER FRAUD
Some voice overs who operate on the lower end of the scale have even come forward to proudly defend why they’re charging next to nothing. People like Rebecca Schwab, who confessed in a blog post that bloggers like me sometimes make her feel like “a voice over fraud.”
She goes on to describe her method of breaking into the voice over business: by selling her services at rock bottom prices. In another blog post Rebecca writes:
“Whether or not I was “undercutting” anyone was the last thing on my mind. It was simply a matter of economics.”
I’m not going to copy and paste her articles here, but I think Rebecca* needs to learn a thing or two about economics and collegiality.
The frightening thing is that she’s not alone. If you frequent certain Facebook voice over groups, you’ll notice that even some moderators have become very defensive when the subject of rates comes up. What’s even worse, you can’t argue with these people because they will kick you out of a group if you try to start a dialogue about money.
So, rather than get into a discussion with people who are unwilling to listen, let me 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.
Let’s start with something I hear almost every day:
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 Rolls-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. Once you get clients hooked on cheap fees, 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 ten melons for a dollar each, and then selling 12 for 10 bucks. Does that make any sense? No matter how many KIAs 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 money you get to keep that matters. Business is a game of margins, not volume. Bargain airlines tried making money on volume. Guess what? They’re gone! Would you rather do less for more, or more for less?
3. Purchase decisions are primarily based on price.
If that’s 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 car dealership, you’re in trouble.
Value means: offering more at 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 cannot 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.
Market trends are the result of millions of individual decisions. Decisions you and I make, each and every day. Change the decisions, and you change the trends.
Price-cutting is a self-inflicted wound. Should you decide that $5 for an eight 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 Fiverr, Upwork, or the $5 voices.com minimum rate, and decide that that’s what “the market” is willing to pay. After all, the only thing 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 a few agents? If you’re any good, they might want to represent you. They will fight for a decent rate because if you do well, they 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 extraordinarily 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 pointed out to me, 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. Often, I don’t know how much to charge.
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 was the co-founder and President of software solution provider Basecamp. 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.”
Not knowing how much to charge is not a valid excuse anymore. With so much info readily available online, people who use this argument are willfully ignorant. If you don’t know how much a job is worth, don’t audition for it. You’re obviously not ready to be a pro.
10. I don’t need to make a full-time income. It’s only a hobby.
If it’s only a hobby, then 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 talents I know are only freelancing part-time because they’re still building what they hope will become a full-time business. 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 must 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.
Asking for a reasonable rate 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?
Those who fail to build value, have nothing left but to compete on price.
*since the publication of this article, Rebecca’s blog posts are no longer available
PS The above article is an excerpt from my book “Making Money In Your PJs, Freelancing For Voice-Overs And Other Solopreneurs.” Click on one of the buttons below to get your copy.