Ask Freddy: As A Marketer, How Should I Set My Hourly Rate?

Q: Dear Freddy:

I recently graduated with a master’s degree in communication, and am hoping to find a full-time job in marketing. In the meantime, I’m interviewing for a part-time, independent contractor gig with a small agency. This could include more responsibilities than average, such as project lead for new clients. The agency’s most recent email asked me for my hourly requirements. I did some research and found a huge range of hourly rates for marketing contractors. How should I respond?

Sincerely,
M in the Midwest

A: Dear M:

Let’s do the math — and save the calculations to show the agency. When negotiating a rate, it helps to reveal where you got the numbers.

Now, before we jump in, note all the variables that could affect what an employer will pay:

• region
• industry
• company size (both the agency and their clients)
• quantity and quality of other job applicants
• the other applicants’ level of self-esteem
• plus something called a recession

So whatever figure your calculations produce should serve as just a starting point for negotiations.

Now, let’s begin with a point of reference: what employers pay for full-time marketers fresh out of your grad school. You can learn that from your school’s career services office. Let’s say it’s about $60,000/year. Break that into an hourly rate, assuming a standard 40-hour week, 50 weeks per year:

$60K ÷ by 2000 hours = $30/hour

That’s your base price. Now aim higher, since independent contractors don’t enjoy benefits or job security (freelancing life is feast-or-famine). For a lightly experienced professional, go for $40-$50/hour. That said, the recession has made this an employer’s market, so start your range at $30.

Now, time to negotiate.

Tell the agency that your rate is $30-$50/hour depending on how many guaranteed hours they will contract from you.

• If they want you to work without guarantees, and simply bill them for the hours you put in, charge them your top rate of $50/hour.
• Conversely, if they guarantee, say, 20 hours per week for three months, offer $40/hour. Don’t drop to the bottom of your range, since you still need negotiating room.
• You can offer more of a discount based on how much they will pay you up front. Always try to get as much up front as possible. As many a contractor will tell you, payment can be late or even non-existent, particularly if your client is a startup.

If you come to a sticking point because they see you as an unproven recent grad, offer to work at your lower rate for a trial period only. During that trial period, show them your value — professionals who deliver more value than they cost deserve higher compensation. If they like your work, at the end of that trail period, your rate goes to your highest level.

Critical Note: It’s All About Making An Impression

The negotiation is the first test of your marketing skills: you’re setting the tone of your relationship, while establishing your value in their eyes. That means you shouldn’t simply accede to whatever they offer — show them you understand strategy.

• If you play hardball, they might not want you on their team… unless your job is to negotiate with their clients, in which case they’ll love you.
• If you roll over and underprice yourself, they won’t respect your work. It’s human nature: we perceive expensive products and services as higher quality than inexpensive ones. In addition, underpricing yourself shows you lack confidence, and good agencies prefer confident team members. Don’t forget, your ultimate goal is that coveted full-time job, so demonstrate the attributes they admire.

Now, what if the other party won’t negotiate — or even respond to your rates?

Sadly, ghosting has become far too common in modern business. Yet, while it’s frustrating to lose a job opportunity — particularly in this economy — it’s soul-crushing to serve unprofessional clients and execs. Any cruel and unusual behavior during the courtship signals an unholy matrimony ahead. So unless you’re facing a dire financial situation, breathe a sigh of relief that you learned their true nature before giving them valuable days of your life. The last thing you need in 2020 America is more stress.

It might seem hard to believe these days, but other opportunities will come around. While you wait for them, do what you can to boost your value before your next negotiation:

• Create a blog, podcast, or self-published book about marketing (as a graduate student, you know more than best-selling writers like Seth Godin do). The book might even make money.
• Run a pro bono campaign for your favorite charity, cause, or small business.

As a marketer, you need to show all those agencies and other prospective employers how you promote your most valuable brand: yourself.

Good luck!
Freddy

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Featured image by Morgan Housel on Unsplash