An American Editor

March 30, 2015

Business of Editing: Does Market Perception Matter?

In recent discussions about pricing of services it was suggested that perception of worth was an important factor in the battle to obtain higher fees. It was suggested that by setting pricing too low, potential clients would balk at hiring the freelancer because of the perception that the freelancer cannot be very good, which perception is based solely on the low price. The advice then being that it is better to turn down low-priced work than to give the market opportunity to misperceive the worth of your services and your skill level. (See “The Real Problem with Low Freelance Rates” by Jake Poinier for the original argument.)

At first blush, the argument appears to have value, but after thinking about it for a while, I think the argument of market perception is a very minor matter.

We need to begin at the very beginning: How does a freelancer know what is too low a price to charge? No discussion regarding pricing can have any merit if this riddle is not solved first. We have had this discussion before, and the resolution begins with knowing your required effective hourly rate (rEHR). (For that discussion, see the multipart series “Business of Editing: What to Charge.”) In the absence of knowing your rEHR, it is not possible to know whether the price you are contemplating charging a client is too low.

The second prong of the answer lies in knowing what price is the general price for the services required in your market. Each market has its own pricing scheme. Editing reports that are going to be submitted to a government agency is likely to be more expensive for the client than the editing of the novel that will be self-published. And working for a packager will carry a different market price than working directly with researchers seeking to polish an article for journal publication.

The third prong is delineation of the services. Too often we use a general term, such as copyediting, and assume that everyone understands the term to mean exactly the same thing. Of course, the reality is much different and you cannot compare my copyediting with your copyediting unless we have come to a mutual agreement as to what copyediting entails. We have to compare apples with apples, and even then, we need to compare cooking apples with cooking apples rather than cooking apples with eating apples.

A fourth prong is also fundamental to the answer: Under what conditions are you working? By this I mean are you in a position to turn down low-paying work and hold out, perhaps for months, until something comes along that meets the definition of “not too low paying”? In other words, are you the sole source of income in your household? If not, does the other person in the household earn enough that you can sit idly by waiting?

This fourth prong is the most often overlooked prong when discussions about pricing occur. It is easy if you have a lot of money in the bank or a spouse who has a secure job and earns enough to pay all the bills; it is not so easy if your income is the primary (or lone) income in the household. Yet when the argument about market perception is made, it is rarely disclosed why the argument’s author believes he can take the high road.

These prongs (and others not mentioned) are key to understanding why it is easy to make the market perception argument but not so easy to abide by it. Yet there is an even more fundamental flaw with the market perception argument, which relates to how many of your clients actually view the market that way. That is almost an unanswerable. In the absence of actually getting a prospective client to tell you why you are not getting a particular project and telling you honestly, measuring market perception’s effect on your business is nigh impossible.

My experience among my market is that I lose work because my prices are too high. In 31 years of editing, I have never had a prospective client tell me my prices were too low; only that they are too high. And when you peruse the various forums, you rarely see someone say that they didn’t hire an editor because the editor’s price was too low; invariably, the reason is that the price is too high. (When I do read a comment questioning pricing that is too low, with a little investigating I discover that commenter is a colleague, not a buyer of services.)

Is this to say that there aren’t clients who do not react negatively to low pricing? No, because I have no doubt there are such people. But the key is that they are not in my market and that is the market with which I need to be concerned.

There is another fundamental flaw with the market perception argument. The argument rails against low pricing but never identifies what is correct pricing or the maximal pricing. It is always couched in low pricing terms (which also is never really identified — is $25 an hour too low? How about $35? Or $50? Or $100? Or is $50 too high and $35 both correct and maximal?), which leads us back to where we began: How can pricing be judged if we do not know our rEHR?

And equally important: How can our pricing be judged if our EHR remains unknown?

I have made this argument numerous times yet still colleagues talk in terms of too low pricing. The key is not the pricing but what you can turn that price point into. If your rEHR is $20 and your EHR is $40 and your price point is $2 per manuscript page, is your price point too low? I think not.

One other point about the market perception argument. It is always couched in terms of how clients view you but is really based on how colleagues view you and the desires of colleagues. I think we would all agree that high-quality editing is a very valuable service. I know that we could come to an agreement as what is a fair rate that every editor should minimally charge. I also know that we can all agree that some colleagues charge too little for their editorial work. But when we make these agreements they are made base on our desire to be better compensated for the work we perform.

What we want is for everyone else to adhere to a standard we impose so that we can be part of a rising compensation tide. That is, the market perception argument is not based on what is good for you, but on what is good for me. And that is the ultimate flaw of the argument: the lack of agreement as to what is good for me.

Regardless of how you come down on the validity and worth of the market perception pricing argument, in the absence of knowing your rEHR and your EHR and understanding your market, it is not possible to determine where your pricing fits in the market perception scheme.

Does the market’s perception of your pricing affect your market’s view of your skills? Do you agree or disagree with the market perception argument. Do you know your rEHR and EHR?

Richard Adin, An American Editor

3 Comments »

  1. This is always such a tussle.

    I base my fees on a combination of what I know I need to earn over a given year *plus* what I think my skills are worth. I’m in the lucky position of not having to accept rates that I think are lower than I should be paid, and of either turning down or not even applying for projects that I think pay too little for my needs and ego.🙂 Knowing how much money I need or want to earn over a year helps me stay on track.

    I can’t say what I would do if I were suddenly to desperately need every penny I could get, to the point of accepting fees that are much lower than I aim to receive. I hope I would make a concerted effort to find new clients that pay as well as my current ones, if not better, but we probably all have had to take on lower-paying work at some point in our careers – sometimes the fast buck is more important than the big buck. The point is not to let that become one’s standard.

    I do accept the occasional project that pays less than my preferred rate if I can see a genuine benefit to doing so. Trying a new genre or type of editing is one possible reason for accepting a lower rate (initially); when I’m wearing my writing hat, covering a new topic might also be a rationale for accepting a somewhat lower rate than usual. Casting a project in terms of time rather than words is another – if a quick-and-dirty, essentially effortless writing assignment comes out at $100/hour, I might accept it even if the per-word rate is lower than what I usually receive.

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    Comment by Ruth E. Thaler-Carter — March 30, 2015 @ 12:52 pm | Reply

  2. Market perception is a big player in my life, because I work across multiple channels: corporate business, trad publishing (conglomerate and indie), independent contractor, and subcontractor, handling fiction and nonfiction books, magazines, and assorted other. The rate range for these is broad, and I do not have control of rates much of the time (i.e., they are presented on a take-it-or-leave-it basis). So hitting my effective hourly rate on the button every time is a darn hard thing to do. I’m still early enough in my career that my greater concern is having work on the table all year, every year, and getting paid for it every time, in a timely fashion. Having gone from zero to consistency, I’m now in a position to focus more on nailing the numbers. It’s a two-edged sword: You have to get good rates in order to survive, but you have to survive and perform in order to get those rates.

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    Comment by Carolyn — March 30, 2015 @ 3:10 pm | Reply

  3. Very interesting. I think one issue is that no one actually objects to an editor’s rates being too low, per se; rather, prospective clients may view too-low prices as evidence that the editor is incompetent or otherwise not a professional. In your case, if you have clients telling you your prices are too high, but none saying they are too low, this may just be evidence that you are not pricing yourself at the low end of the market, such that no one perceives your specific rates as too low. In general, though, supposing other editors have a similar experience, which is probable, I’m inclined to think the explanation may be as follows: if a client perceives my rates as too high, he may be more comfortable informing me of that perception because, to his mind, it’s something I can change easily. I just need to reduce my rates. If many people tell me my rates are too high, I may lower them accordingly, and thus the prospective client will be able to hire me in the future, which benefits him, if he would have hired me but for my too-high rates. He may think it also benefits me, since I may make up the money lost by lowering my rates if as a result I can obtain more total business, and thus earn more per year, if not more per hour.

    On the other hand, if I am perceived as a qualified, professional editor who is charging less than the market will bear, the client gains nothing by suggesting I raise my rates–he will have to pay more to use my services in the future. Telling me I charge too little would be an act of altruism. But if my too-low prices create the impression in the client’s mind that I am not qualified or professional, the client is unlikely to say to me, “I am not hiring you because I perceive you to be incompetent,” both because it would be unkind and antisocial to do so, and because it serves little purpose to inform someone you won’t be working with that you think they’re a hack (unless the client enjoys being a meanie)–am I supposed to magically become more competent and professional as a result of his words?

    For myself, I do often see authors post in forums that “editors cost X and you can’t expect an editor who charges 1/2 X to do a good job”–but then I think you are right that this is a reflection of the market I serve, which is different than the one you serve. I mainly work with self-publishing fiction authors, and the self-publishing community is overrun with self-proclaimed editors who are neither competent nor professional but who do participate in a race to the bottom in terms of rates. Not charging rock-bottom rates is one important way to set oneself apart from such “editors,” and in this market, many prospective clients do react negatively to low prices.

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    Comment by Eliza Dee — March 31, 2015 @ 4:46 pm | Reply


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