Making a living as a freelance instructional designer can be challenging, especially when it comes to negotiating new projects.
Depending on the health of your sales pipeline, you may be tempted to just say Yes! to any opportunity that comes your way. But it’s important to negotiate each project so that both you and your client are happy with the agreement.
I’ve negotiated several e-learning projects and learned a few things along the way. Here are my three tips for managing e-learning contracts that will set you up to thrill your clients and earn the compensation you deserve.
Tip 1: Know What Makes You Valuable
E-Learning designers bring a lot of unique skills to the table. Starting from scratch, we magically create courses that educate and excite learners. It’s unfortunate that many of us don’t realize the value we bring to our clients. As a result, we tend to sell our services short when negotiating projects.
This is bad news for several reasons. Chronic low-balling can lead to burnout over time, cause your client to regard your work as less valuable than your competitors, and even send the message that you’re desperate.
It’s your job to communicate your value clearly. Start thinking about the qualities you bring to the table. What value do you communicate to your potential clients? What is unique about you, your company, and your products and services?
If you don’t know, take some time to figure it out before you negotiate your next gig. Your answers will come in handy later.
Tip 2: Make Good Estimates
Once you’re clear on why you’re an awesome e-learning developer, you’ll want to put a dollar value on your services.
Estimating a project rate can be a challenge if you’re just starting out. There are several factors you’ll need to consider before you can come up with an accurate number:
When I understand the course requirements, I like to break down my e-learning projects into the following categories and tasks:
I use information from past projects to estimate the average time it takes to complete each task. (Pro tip: Always track your time on projects!)
By using a spreadsheet, I can quickly make adjustments as needed. For example, if the client provides a storyboard or has completed a front-end analysis for the project, I remove those calculations from my quote.
You can download a copy of this spreadsheet to use in your next project.
Tip 3: Share the Workload with Your Client
Once you know your costs, you’re ready to write and deliver your quote. It would be great if, at the end of every project pitch, our clients said, “That sounds great! Where do I send the check?” But the reality is sometimes you hear, “That’s a little more than we were thinking.”
Pricing is a sensitive topic for many e-learning designers, but if you know the value you bring to the relationship, it doesn’t have to be.
Everyone wants a deal, but it’s never a good tactic to enter into a price war. There will always be someone who is willing to charge less than you. Instead of lowering your prices, see if your client is willing to take on some of the responsibilities of the project.
Since you have an estimate of what each task costs, you’re in a position to helpfully say, “Would you be willing to do task X or task Y? That would decrease the project cost to X amount.” By delegating some of the project tasks to the client, you’re able to provide a “discount” without devaluing your work.
When using this strategy, make sure you have a well-written, crystal-clear statement of work that states your expectations. You may choose to charge a fee if your clients don’t shoulder their share of the work. I usually charge an hourly rate when I’m required to step in and help a client with something they offered to do originally.
If delegating doesn’t work, here are a few things you might consider in order to lower the overall quote without reducing your rates:
Using these strategies, you’ll be able to negotiate a contract that keeps your rates in place without losing the client.
If you spend the time up front identifying the value you bring to the business relationship and understanding your client’s needs, you’ll be able to settle on a project fee that meets everyone’s expectations. It’s a win-win: happy client, happy freelancer!