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5 Signs That You’re Underselling Yourself

By Julie Neidlinger on March 26, 2013 in News.

Underselling Yourself

Freelancers struggle with pricing.

They might be new and uninformed about their market. They might be desperate for income. The temptation is to price low in order to get the maximum amount of work. They think they can’t say no to any job, and undersell in order to get as many jobs as possible.

Wrong move.

First, understand one thing: shoddy work doesn’t work. If you’re not providing an excellent service or skill set, your financial situation will reflect it. By “underselling” we mean high quality work without equally high and valued pay, not low-quality work for high-quality pay.

1. Tying Price To Self-Worth

What people pay you is in exchange for goods or a service, not a reflection of your worth or value as a human.

It’s not a reflection of your confidence level in the given moment. Women are particularly notorious for basing pricing structures on factors that are outside of the goods/service realm. A 2006 study (A Behavioral Study of Pricing Decisions: A Focus on Gender) found that one of the reasons women tended to earn less than men is because they tied pricing into feelings about clients and themselves.

Your feelings towards your client should not affect your pricing structure. Determine the rate you’re willing to exchange goods and services for, and stick with it. While there are some exceptions, straddling the fence between building loyal relationships and undercharging is a very difficult place to make a comfortable living. You’ll grow to resent customers (even ones you like) that grow used to getting something cheap. Train them from the start what you charge.

Remember, what you offer is not who you are. The value of each is separate.

2. Ignoring What The Market Is Doing

Trying to be the cheapest person for hire doesn’t do you any favors. Do you really want to start a price war with your competitors when it means you won’t even earn enough money to make a living?

Prices that are too low in respect to their high-quality work might only attract customers that want great things for cheap. While that doesn’t mean they are bad people or unimportant customers, it does mean they come with a different attitude than a client who says “You’re the expert. I’m happy to pay you what you ask.” What works in a retail world is not necessarily great for a freelancer.

For whatever reason, clients who pay the least often demand the most in return. Underselling the market attracts those who aren’t actually in your market. Stay competitive in your market, and don’t seek a lower bracket.

3. Undervaluing Your Experience

If you’ve been doing something for a decade, you’d better not be charging the same rate you started at.

That decade of experience? It’s valuable. It is made of time, mistakes, hardship, self-taught skills – and it’s worth something. All of that time you’ve spent learning and becoming an expert have carry-over value. That is, it isn’t too much to expect future customers who benefit from your experience to pay for it, even if it means you can actually work faster than you did early on. The better you get, and the less time it takes you, the more you charge. Your rate increases.

Your experience has value. Charge customers if they want to make use of it.

4. Too Many Free Lunches

Do you find yourself practically giving things away?

It’s fine to give back to your community. Donate to worthy causes, teach others how to do something, write useful tips on your blog. But if you find most of your time dedicated to work you aren’t seeing any financial return for, and instead are getting more requests for something for free, the balance is way off.

Is what your doing for free going to build your business later? Will it build loyalty?

You’ll know you’ve been giving away too much of value for free when your clients start demanding the premium service or product but always for next to nothing. That’s no surprise; you’ve trained them to expect things for free instead of teaching them that they need you and will pay for it.

Give enough away to keep them hungry. Keep the thing that makes you money behind a pay wall.

5. Extreme Frustration

Asking too little creates frustration in your life that manifests itself in strange ways.

Being tired, irritable, or unmotivated are common. You’ve hit your tipping point for work and you can’t even find a clear focus anymore. Feeling anger about your situation, towards your clients, and towards your work can often be traced back to the fact that you aren’t charging enough to live on and it is having a destructive effect on your life.

Time Frustration

When you undersell yourself, you willingly give up more time. Because your cost of living is at level X, you must work and earn enough to meet it. Underselling means you must work more, and work harder. Do you have to work an 55-hour work week just to make ends meet? Or could you work 40 hours and charge more?

Client Frustration

While it’s not unusual to be frustrated with clients once in a while, there are few things more angering than a needy client you know you didn’t charge enough. They still have the same demands as any client, but you’re getting paid much less for your time.

Do you find that even in the most frustrating of client situations, you feel a sense of relief at the amount of money they are paying you? Or do you instead feel cheated and have anger towards them for “trapping” you?

Make Some Changes Now

Are you underselling yourself? This is the perfect time to stop.

1. Research. Grab a pencil and paper, and start doing some research. Find out what market rates are. Call around if necessary. Look online. Increase your prices and alert your clients. You’ll know which ones were with you because they love your work (they’ll stay) or because you were cheap (they’ll put up a fuss and go).

2. Look Inward. Take stock in yourself. Look at your skills, knowledge, and experience honestly. If you can’t, find a trusted colleague that can do the evaluation from an outside perspective. Write it all down. See your value and worth in professional terms, and you’ll quickly see you have a legitimate right to charge more than you are.

3. Separate. Force yourself to separate your worth and identity from your work. Otherwise, every rejection of your work becomes personal, and makes it too easy to drop your price in order to get the client and regain your “self-worth.”

4. Practice No. Practice both saying no to jobs that don’t fit this new plan, and practice living with yourself after you’ve said no to a few projects. The first couple of times you’ll struggle, always calculating the money you turned down. Find a way to turn that extra time and focus towards something more productive.

When you set yourself up to work more with less income, you’re asking for exhaustion, disillusionment, and unhappiness. You’ll eventually give up on freelance work, or quit and find a “regular” job with a “livable” wage. Be sure that the dream you gave up was because you wanted to, and not because you didn’t charge enough. Underselling yourself poisons dreams and makes them monsters.

[Question "Have you been guilty of underselling yourself? Where did it lead to?"]

  • Glori Surban

    I needed this today! So glad I subscribed!

  • vinodh

    thanks . I want to know this . exactly.
    I am a full time programer who want to do freelancing

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  • Sankar

    excellent tips Julie. I am bookmarking your blog and I am going to read as many of your previous posts as possible. you are wonderful.

    • Julie R. Neidlinger

      Glad you enjoyed the post, Sankar!

  • Gombe

    I’ve totally been guilty of underselling myself and it really was destructive. I would hear of colleagues who were getting 4, 5 or even 10 times my pay for tinkering with Excel when I built a single chip internet connected thermometer that exported output to Matlab. I was like, where the hell am I going wrong? Anyway, I plucked up the courage and quit and I’m running my own venture capital funded start up now. Scariest and best decision of my life. I’m a much happier and less resentful person too. I always tell my freelancer friends these days – 1. Google what the top professionals in your field around your age are earning a year. 2. Divide it by (240 x 8) to get your hourly rate. Whenever someone asks you for a task, estimate the time it will take to do it and you have the rate at your fingertips so you won’t undersell yourself by mistake – it’s hard to back out of a commitment once it’s made. 3. Ask for 50% deposit up front based on the estimated length of the task. We are all taught that we should be humble and it is indeed a good trait but I have to tell you. Humility has failed me. It made me undersell myself because I thought asking for what I was worth was arrogance. It isn’t. Self-worth is not arrogance. It’s you’re right to charge for skills you’ve invested so much of your life acquiring. Charge and be happy!