Remember how we established you shouldn’t lower your prices for clients who promise you future work?
Working for ages with the same client at a significantly lower rate than your market rates only because they hired you early on in your freelance career, isn’t a viable option either.
Here’s a quick break-down how misplaced loyalty can hurt you in the long run.
- Forgone profits
The client to whom you are so loyal occupies a significant portion of your working hours. As a result, you decline higher paying offers simply because you don’t have the time to carry out the work, should you accept a new project.
No matter how interesting a project is, if you don’t get paid what you think is fair, you will start hating it. And at that moment, you will start doing your job because you have to, not because you like it or want to. It will turn into an undesirable or tedious task, which by the way is one of the most common reasons for procrastination among freelancers. If you develop the habit of procrastination because of this one project, your whole time management is doomed.
- Poor time management
You will find yourself constantly re-arranging your calendar to fit more paying work in it, to compensate the forgone profits you suffer from that one project under your market rates. Your working day will grow and you will soon realize you started working full day while your goal when becoming a freelancer was just the opposite – to make good money and have more time for hobbies and non-clients work. You may even try harder to fit everything in your calendar, not realizing how you cripple your own time management skills by putting yourself on an impossible schedule. When you need more time, no tactic can stretch your calendar. There are just 24 hours in the day, no matter how much work you have or want to do.
- Impaired work-life balance
When the demand of your freelance services starts growing, so do your freelance prices. As a result, you adjust your lifestyle – you buy more expensive things, travel more or just prefer to work less and have more time to spend on non-client work or hobbies. However, when you work so many hours below your market rates, you are left with the feeling that you work very hard all week and don’t get much in return. You are constantly pressured by the lack of time or by the desire to make more money when spending less time working. Naturally this feeling of being pressured creeps in all other areas of your life – your physical and emotional health, your relationship, and your personal projects.
- Feeling stuck and unhappy
When you no longer enjoy what you do and constantly feel pressured by lack of time or not enough money, you ultimately ask yourself – what am I doing? Is it worth it? How did I get here? Was this part of the deal when I became a freelancer? Will it always be this way?
You think this is what it is and you simply have to deal with it. And you can’t – because you are no longer satisfied with your freelance lifestyle. And you start questioning everything you do.
Sounds bad, right? There is an easy way out though.
You have to face the fact that it was all your decision – that you triggered this chain of events when you chose to work way below your market rates for this client. And what’s worse, you only did it because they gave you a chance back in the day when you were a newbie and they could afford hiring you. You thought staying loyal to them was the right thing to do. But was it?
They didn’t hire you because you needed a chance – they hired you because they liked you and they could afford your services. So is it fair to stay with them out of loyalty or should you put your best interest first?
Let me illustrate my point with a personal story.
How I once misplaced my loyalty and almost ruined a great relationship
This was one of my very first projects when I was starting on oDesk. I worked with the client for years. We periodically updated my pay rate for their contract but toward its end, I was getting twice lower rate than my minimum hourly rate at the time. (To put it in context, let me tell you I worked on their project at around $20/hour while all my new clients were paying me $40-$50 per hour, or even more if I took fixed price projects.)
It’s worth mentioning that my rates were growing rapidly because my services were in high demand. So I kept increasing my rates every other month to filter out potential clients on a tight budget. And this client was on a tight budget, but she was one of my favorites nevertheless.
At first the money was fine and I didn’t mind doing more for less (e.g. working at a discounted rate out of loyalty) because I really enjoyed the project and the client. Also, I had the freedom to experiment and learn new things “on the job”. I was developing my managerial skills, too and gathering insights on how starting freelancers work which was helping with my blog and book materials. I definitely had more pros than cons at that stage, despite the lower rate.
However, a day came when I was no longer satisfied. I was swamped with other clients’ work and personal projects. I was traveling a lot and spending more money than usual as a result. Working at that discounted rate started causing me grief because I didn’t have enough time to do everything I wanted. I needed to make more money to be able to spend more time working on my projects and traveling. I started losing my work-life balance.
At first I didn’t realize this was the problem. I just felt the consequences. I started not enjoying the work on this project. I started not sleeping well because I constantly had less time than needed to do all the tasks I had planned for the day. My personal projects were getting behind schedule because of that. Come end of the week, I always felt I was not getting enough money for all the hard work I was putting in across the board.
A bad feeling started settling in that I was not appreciated – which was not the case. This favorite client did appreciate me – she just couldn’t afford to pay my regular rates. It was all my choice to stay and work for less money. I just didn’t see it that way, yet.
I was close to hating that project when it hit me – I had to maximize my efficiency. Loyalty shouldn’t have been part of the equation at all!
This of course meant I had to let go that one client who was paying me way below my market rates. And so I did. Till day I follow that company, take interest into their work and progress, keep in touch with the client, from time to time they hire me to do something quick for them (at my regular rates) but the message I am trying to convey here is simple.
Be very careful where and how you place your loyalty to your clients.
As long as you think through your approach and willingly and knowingly give a discount (or throw in an extra service for the same price), it is OK. But do not do it out of misplaced loyalty to your client because when you start feeling unsatisfied, you risk ending up hating both the client and the work.
I couldnt disagree anywhere.. i might not have been able to explain this situation better.. U have a deeper understanding and knowledge base in this .. kudos to you for sharing this master piece..
Diana Marinova says
Thanks for reading and donating, Shyam – I am glad my insights resonate with you and I hope they’ll help you now and in the future to be better at whatever you do!
I understand the loyalty thing completely. But I have always said that the people that really like you will want to see you succeed! As you have pointed out in earlier posts, communication is key. Maybe the discounted rate should have come with the understanding that she wold become a lesser priority!
Diana Marinova says
I agree, Jacquie, but even if lesser priority is in place, it still could be a problem in the long run as you know all too well time is simply not enough sometimes. The line between loyalty and misplaced loyalty to freelance clients is very very thin. My hope is this post will raise awareness of the issue.
Thanks for stopping by, as usual 🙂
Jeannette Paladino says
Diana — you are spot on. If you can afford to drop the low-paying client then you should. It’s possible that a client doesn’t know he’s paying you below your normal rate. Have a conversation first and explain that you can’t afford to keep working at the lower rate. If he values your services you may find that he’s agreeable increasing your fee. Of course, that may make you feel resentful that he could have done that long ago. A very delicate situation, no doubt.
Diana Marinova says
Spot on comment, Jeannette – thank you. You raise a good point which may or may not be clear in the post – communication above all. Everything can and should be communicated clearly. Only then freelancers can keep their reputation in tact and continue building healthy relationships with former, current or future clients.
I haven’t really found any material about this subject but your article really explains everything well. I was once in a similar position with a client. I still, to this day, claim that she is one of the best clients I ever had, and that’s why it was so hard for me to actually quit the job. But what must be done must be done. Eventually you realize that these jobs just keep holding you back, materially and in terms of growing and gaining experience.
Diana Marinova says
Alexandra, I couldn’t have said this better – thanks for your brilliant comment! I am glad to hear this post is somewhat innovative for the available materials on the topic 😀 It is an important issue and we should raise awareness of it.
I am currently facing the same issue. I like the work and the client as well.
Your post has given me the confidence to move forward and let things go. Thanks a lot for addressing this issue.
Diana Marinova says
Hey Suchita, I’m glad this post found you just at the right time – and sorry for the delay of my reply, your comment was stuck in the spam folder :-/ Please come back and share how the letting go went – did you really let the client go or maybe you were able to renegotiate the terms of your cooperation?