Chapter 6.2. 8 + 4 elements to consider when pricing your services.
Two post in one week? I know… But I want to cover several topics during this month and I prefer to talk about them in separate bog posts. And I think that pricing is a very interesting and controversial topic to explore, isn’t it?
After having talked about why it is important to set up the correct pricing for our business, I want to tackle the issue of what element we should bear in mind when pricing our services.
I have come up with two lists, the first one include the elements that we should all bear in mind. The second one lists four elements that I would add to the first one. Let’s start!
8 elements that you should consider when pricing your services
- Your costs. Obviously, the living costs of a person living in the UK aren’t the same than the ones of a person living in Hungary. You have to take into account the rent, your bills, the software that you are using to translate, the equipment of your office, taxes, CPD course, etc. In order words, all the money that you are going to invest in your business.
- Your profits. We have already talked about how to craft a financial plan. We have to know how much money we want to make to elaborate an action plan and reach our objectives.
- Demand within your market. Knowledge is power. I can stress enough how important a market research is when pricing our services. We must know the economical situation of your country and the countries you are targeting your services at.
- Your business. Do you know how many hours a day you want to work? How many days a month? Do you know how many words a day or an hour you can translate? Our business strategies and the objectives set in our financial plan must be intertwined in order to know what we have to do to accomplish our objectives and set the pricing accordingly.
- Your industry. Once again, a translator that works between English and Spanish won’t probably charge the same than a translator that works between Spanish and Maltese. Simply because of the scarcity factor that I will talk about in the second list. And once again, market research is the key. Learn how much your competitors are charging. The more you know, the more likely will be to set the correct pricing.
- Expertise. The more expert you get on a specific field, the more you are likely to charge for your services. Why? Because, as you specialise in a field, you will have less competition and your services will be different from the rest. And then again, scarcity plays a key role in this case.
- Experience. And I would take this one with a pinch of salt. I don’t agree with translators that are new in the market and place their rates far below the standards of the industry, just because they have just started. But, experience can be a factor when considering increasing your rates at some point during your careers.
- Your clients. Once you have a solid client portfolio, you realise that you are taking more risks working for certain clients. You should adapt your prices to the requirements that your clients ask for.
This second list includes 4 elements more that I personally use. I am not saying that you should use them as well, and maybe some of you may even disagree with me, but they work for me. So why don’t you give them a try and let me know your thoughts?
+ 4 elements that I consider when pricing my services
- Differentiation. In general, if you want to succeed within the translation industry, the most important advice that someone could tell you is to be different from the rest. Easier said than done, right? I will talk about being different later on. So ask yourself: “How different my services are from the ones offered by my competitors?” And this leads us to…
- Scarcity. Offering a service that no one out there can offer or isn’t offering yet. Think about it, you would have no competitors. All clients in need of this service would rely on you. And you should charge accordingly for this service. Also, easier said than done, eh?
- Do NOT hide your prices. Be honest, your clients will appreciate it. And be proud of your rates. If a client asks you to translate his website, you can tell him that you normally charge £X, but that you are charging £X+50 because you are also performing a key word research that will boost the copy of his website in every Google search if he is ok with that. They all probably will.
- The power of dynamic prices. Services aren’t products, they aren’t something established. And I don’t think that prices must be something fixed. They can vary and adapt to the needs of your clients. If you are a literary translator, maybe you will be ask for the translation of a book, and maybe you can also add a subcharge for working also on the layout of the book. Every client has his own needs, and we have to gather as much data as possible from them to charge accordingly.
Do you agree with this? Would you add any other element to any of the lists? I want to read your thoughts!
By the way, the very last topic of this series that I will cover, I will do it through my Newsletter. Subscribe here!
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Andreas Rodemann
Dear David,
yes, there is one more element that I would like to add to your list: Know your competitors, know who they are, where they are based and what their abilities are. This will most likely also have an effect on your pricing.