Freelance pricing — in search of the “double thank you”

There’s only one thing that matters: are both sides happy with the exchange?

Pricing creative services is tricky. You’re always worried you’re not charging enough because you can’t help but compare yourself to others who can command higher rates. Nobody likes leaving money on the table. But you’re also worried if you charge too much you’ll lose customers, and nothing is scarier than work drying up.

Most of us are also concerned about being fair. It feels wrong to charge exorbitant rates even if your expertise can justify it. Or, you feel you’re being unfair to yourself by undervaluing your work. If either side of the transaction has financial regrets, then that equation needs to be adjusted if you want to run a sustainable creative business.

So what’s a fair price then? How do you know if you’ve gone too high or low?

You’ll never get a straight answer in dollar figures because pricing is far too personal. It’s contextual to your industry, skills, experience, location, speed, professionalism, and countless other factors. And you won’t even find an agreement on how to price your services. Some swear by hourly pricing, while others abhor it and only strive for value-based pricing or fixed-rate project fees.

But here’s one thing that we can all agree on — and it works no matter what method of pricing you choose. It’s a foolproof way of knowing if you’re charging a price that’s fair to both yourself and your client. It’s called the double thank-you test.

A gift vs. an exchange

There are two types of transactions in a capitalist market. Sometimes the receiver says “thank you”, and the other party says “you’re welcome” or “no problem”. This is what happens when a gift is given. The receiver has gotten something of value while trading very little or no value of their own. It’s a transition where — financially — there’s a clear winner. It’s one-directional by design.

In the other type of transaction the receiver says “thank you” and the seller replies “thank you” as well. Think of the last time you bought coffee, or groceries at your supermarket, or received a great massage therapy. When you go to…