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NEGOTIATION AND CLIENT WORK IN THE FREELANCE GIG ECONOMY
🕑 Added 2020-11-05 19:09:04 +0000 UTCThis article is available as both a Patreon text post and .pdf document format. We ask you kindly to not share Lux Cache content outside of the Patreon, our contributors rely on your donations.
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KNOWING YOUR WORTH
Putting an intrinsic value on creative work can feel like an abstract thing, especially if you lack the portfolio to prove that your work can be useful to clients. If a client comes to you, that’s easy. The client is targeting you for your strengths; in their eyes, your role is to solve a business problem and help their brand strategy going forward. If you’re dedicated to a project, you will be sitting down and spending quite a lot of time discussing these issues: offering multiple solutions, taking the time to understand their criteria and putting in the work to do the best job possible. This is a core part of your role as a freelance creator, and is why you are valuable to your client.
Just because a client calls, it isn’t your responsibility to make it work if they’re not offering a fair price. For a lot of people starting out, it's easy to fall into the trap of selling yourself short, just to get that first lump sum. The reality is that constantly accepting lowballs is not only going to drastically stagnate your position in that market, but will also mean you have less resources to put into making great work to get you more gigs. You didn’t have that lump sum before they called, in fact, the pressure of having to close every job that comes your way will put you in a more stressful and disadvantageous position. Personally, every client I’ve lost over price has been a client I’ve been happy to lose. Reverse the dynamic and position yourself in the expert/specialist role trying to build your career rather than a service provider.
KNOWING YOUR CLIENT
Is this project important to your client? If so, they should value and budget it as such. If not, is there any point to spending major time on minor things? Real business problems require real money to commission solutions for them. Having an understanding of the results your client is asking for is completely essential in creating a fair and transparent offer that benefits the both of you.
What's your budget for this project and how much business is this looking to make for you?
Here's another question to ask - say you are charging £5000 for a project, where does £5000 lie on their list of expenses -- on the high end or the low end? If we’re dealing with a global business launching a new campaign, there's a good chance that £5000 is next to nothing on the scale of the marketing transactions they're operating with. On the other hand, if we’re talking about a small independent grassroots start up, this could be a hefty sum to lend over. If you’re asking plenty of questions, you’re in control in the conversation from an informational standpoint. You’re also building your trust with a client -- a factor which is extremely useful when you want straight answers for the concerns you have.
Acknowledge the risk for your client and know the deadline. It’s obvious that clients would be reluctant to overspend. If you truly value your work to be of use to them, an idea to put forward is to ask for a percentage of the newly attributed business that you will be offering if their results are met. This eliminates the risk for them. That said, 9 times out of 10 they will rather offer the lump sum because it means they only risk you overperforming, rather than underperforming.
THE DANGERS OF SPEC WORK
Unfortunately, ‘spec work’ is still a common practice in the creative field, and many young artists fall victim to it in their desire to find new work. The exact definition reads as:
any kind of creative work, either partial or completed, submitted by designers to prospective clients before designers secure both their work and equitable fees. Under these conditions, designers will often be asked to submit work in the guise of a contest or an entry exam on existing jobs as a “test” of their skill. In addition, designers normally lose all rights to their creative work because they failed to protect themselves with a contract or agreement. The clients often use this freely-gained work as they see fit without fear of legal repercussion.
For music producers this includes remix contests, composer challenges or most kinds of “competition”-based submissions of music. You can find more out about the dangers of spec work at https://www.nospec.com/
THE ISSUE WITH PAY-PER-HOUR
Pay-per-hour is a model that doesn’t work well in the freelance creative field. Pay-per-hour can exploit a freelancer's efficiency; you shouldn’t be punished for your ability to work quickly, or likewise your need to take longer. This is not to be confused with media composition rates where you set a fee per hour/half an hour/minute of media. Media composition rate can sometimes be in this format, but should not be any reflection on the work it takes to generate the composition. Almost always, the client should be expected to pay you in lump sum for the interest of both parties.
FINDING A MENTOR
Having a mentor with experience in these kinds of situations is extremely useful in knowing exactly how much you should be getting. Reaching out to a mutual in a similar field to you and asking for advice will usually be welcomed. Artists hate seeing younger artists get exploited and scammed in this industry. If there’s contracts involved, definitely try and get in touch with a lawyer who handles musicians, or ask someone in your network who deals with a lawyer. These lawyers' fees can be paid for by the client more often than not, as long as you negotiate that into your deal. Having a professional look over your contracts is always worth it if you’re looking to protect yourself and your work.
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NAVIGATING PRICE AND GENERAL NEGOTIATION
In the analysis of price negotiation, I’m going to use a real-life email thread that I helped a friend with recently - with names and organisations censored for legal reasons. The scenario was a luxury company looking for a bespoke track to use in a web commercial.
THE ANCHOR - PUTTING THE NUMBER DOWN FIRST
Regarding the commission fee I would be looking for around £5000 for this project, which would include the bespoke production cost, audio engineering costs (mixing & mastering) and exclusive rights for the final track. Let me know if that falls in line with your budget.
It’s a common misconception that the first offer will always be the losing one. Setting the price initially, also known as “anchoring”, acts as a heuristic mental shortcut -- priming the thought process around the first piece of information put on the table. Anchoring high and realistically allows you to set the tone for the remainder of the negotiation. Ultimately the anchor acts as a shortcut to solve the problem and make the judgement calls quickly and efficiently. Be honest about your package and what you can do for your client. If there’s limitations to what they’re asking, let them know and try and find a solution together.
Client:
I appreciate that your knowledge and time are valuable however it's a little over our budget. I reviewed our costs for this campaign and the max we could spend in the music is £1500. Do you have any flexibility in the fees? Is there anything we can simplify to make it fit our budget?
While this lowball may seem disrespectful from your first anchor, they know your truth worth from that anchor. They know the exact amount of money they can budget to have this task done efficiently and quickly, that will stay present in their mind
I hear your concerns RE: budget. Taking into account the effort I've put in so far I'm not sure £1500 will work for me. I appreciate you value my work and feel it to be an important part of your brand.
It’s super important to be totally transparent and to address any buyer resistance before proceeding with the negotiation. If you’ve anchored correctly, it’s completely appropriate for a client to have hesitations before spending money with you. Both parties are trying to arrive at a number where the deal goes forward and they can get approved.
I want to dedicate as much time to this as possible to meet your deadlines and commission fee is part of that puzzle when I'm writing for multiple clients.
The time you have allocated to work is your supply, and any changes to your supply is going to directly correlate to your value. Clients want to be at the top of your priority, and they understand that with multiple clients at play they will fall a long way down that list with a lowball budget.
To put in context, to license a released song for commercial use in this kind of job could be anywhere from £3000 - £15,000. It would be really hard for me to justify the value of this project for any less than £5000 to close the job and provide the level of service you deserve.
As often is the case with corporate clients, the project manager may be inexperienced in the areas they’re hiring for. There’s a gentle way of explaining what the industry standard is in your field, with cautious language to not patronise (however tempting it may be).
If this still doesn't work out I'd be happy to try and put you in touch with someone in my network, but cannot promise they'd reach your deadlines.
Even if a client has lowballed you beyond belief and disrespected your value entirely, it’s still important to maintain good relationships with those who can't afford to pay you. Referring your client to someone who can genuinely help them for the criteria they have is called the law of reciprocity. Repeat clients can be a huge portion of your client base in the creative sector and essential to getting that first taste of a steady income.
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Written by Kai Whiston
Edited by Seth Jordan
Kai Whiston is a music producer and founder of Lux Cache.
You can follow him on Twitter and Instagram @kaiwhiston
