Setting rates for voice over work has always been a headache. How much should you charge your clients for using your voice? How much should you charge your clients for your studio facility? How much should you charge your clients for your time spent converting the audio in the appropriate format? How much should you charge your clients as an overall project rate?
Still most talents and companies out there calculate their voice over rates manually and I hope these articles will help understanding the basic aspects that take part in the formation of voice over rates.
So what are the different aspects of the process you should have in mind when forming your voice over rates? Here they are:
Business potential evaluation
One of the major aspects of forming your voice over production rates is the business potential of the quote request. The business potential evaluation has the following major directions:
- Project potential.
- Customer potential
- Margin evaluation
- Volume-Deadline ratio
- Strategic partnership potential
- Entering a new territory
- Portfolio benefits
- Common business history
There are projects which are single and projects which are ongoing. We have ongoing projects that we have been working on for years, for example. Single projects are a headache and should be charged more while ongoing long term projects need a different approach. Besides the fact that ongoing projects are not just an income but an income source, such projects are of high interest to your competition and you should be open to negotiation and compromises.
There are ongoing projects that start with small volumes which grow with the time. That’s why it’s very important to picture an ongoing project not as a static deal but as a dynamic situation that might often require re-negotiations and production cost revision.
When forming your pricing for single projects with a small working volume it is very important to show your customer that your pricing is flexible depending on volumes and engagement with you as a provider. This way, even though your customer has a small project for you today, they will feel welcome to come back to you tomorrow with a bigger project for a better price.
There are single projects with large working volumes. They are a good opportunity to show your customer that you can do a great job for a fair price based on the volumes provided.
Large customers require a custom attitude. It’s a fact that you cannot put a small company and let’s say Discovery Channel or Microsoft in the same group of quote requests and treat them the same way, give them the same prices for similar volumes etc.
Sometimes huge companies start with small projects. That happens because they are very advanced in the optimization of their expenses and they don’t move to the next step before they utilize and evaluate this one in any possible way. You need to know that, be patient in growing a business relationship and be open to compromises. Usually, that pays off big time.
Sometimes large volume projects with huge incomes come with great expenses and the margin is very low. In this situation you should either come up with a plan how to reduce costs in order to give a competitive rate or you should form a rate that consists a “buffer” in case that something goes wrong with your calculations. For ongoing long term projects, something always goes wrong. It’s just a matter of time. It’s very common for customers to ask for rates based on large volumes that they cannot really provide and your contract should be very detailed and clear about how the deal changes if any of its parameters change (volumes, payment terms, etc).
Volume-Deadline ratio evaluation:
The most risky situation when you form your voice over production rates is when you have a large volume that you should voice in a very short deadline. That doesn’t apply for the talents but for voice over studios and localization companies. Large volumes with very tight deadlines always end up in a very high production cost. When you are in this situation, you should always apply additional fee known as a “rush charge.” Otherwise, it is very possible that you will end up losing money.
Building a strategic partnership:
Sometimes the customer business potential far outreaches a certain project. Some customers are interested in local representation, or looking for exclusive providers for certain territories. Some might be interested to invest in you and your business. The very fact that you are in touch with a large company that needs your services is a gold mine if you know what to do.
When you are in such situation, you should change the gears and thing beyond the concrete reason that brought you and this company into negotiating. Large companies have multiple needs even though they might not consider that at this moment. But you should and you should suggest different ways to be of help. Sooner or later, they will remember.
Conquering new territories:
With the time, clients form business relationships with certain providers. It is not uncommon though sometimes providers that work with your competitors, request a quote from you.
There could be many reasons for that: you can provide something that your competitor can’t, or your competitor demands high pricing and they want to teach them a lesson, could be a new employee or manager at the provider’s office, with new vision and looking for new partners. Whatever the reason is, you need to grab that chance even if you have to make a compromise with your pricing or payment terms. That will pay off with the time.
Building your portfolio:
When you have a customer form an industry that you haven’t worked before, it’s very important to gain and be able to show experience for future similar projects. Many customers will refuse working with you if you have no experience and project history in a certain business area. So if there is a customer that can open this door for you, you should be open to a compromise in order to add this industry to your portfolio of voice over working experience.