Many speakers find it difficult to set their speaking fee.
Some are nervous about setting their rate too high, especially in the early years of speaking when maybe they still have to hustle speaking engagements, and their calendar is not yet brimming with events.
Sometimes they may think that if they have a low rate, they will get more bookings, or that organizers will have lower expectations or be easier to work with.
But the truth is that, more often than not, the opposite is true—when you set your rate low, you may attract a different (spoiler: less desirable) type of event organizer, and it will undercut your ability to scale your business.
Let us explain this in more detail.
Let’s imagine that you are an event organizer. You are in need of a speaker to talk about new trends in artificial intelligence, and there are two speakers on your shortlist.
You don’t know much about either one, but Nancy is twice as expensive as Thomas.
You’d probably start thinking:
“Ok, based on their speaking fees alone, Nancy is probably twice as good as Thomas. She probably has more experience and expertise to justify this higher rate. Thomas is probably ok, but maybe he is just starting out, and that’s why his rate is so much lower.”
You can use this same formula for just about anything;
If the iPhone X is nearly three times as expensive as the Huawei P20 Lite, we will expect that it is a much better smartphone.
If Annie's Naturals Organic Ketchup is $6 at Whole Foods, which is more than double the price of a bottle of Heinz from Walmart, it must be because they are using higher quality ingredients and processes.
If you have the choice between a web developer who tells you that he can build you a new speaker website for $200, and can have it done in three days, or one that says he is booked for the next month, and will charge you $2000—you can’t help but feel like there is going to be a big difference in quality.
We equate cost with value, and often for good reason.
So when you set your rate low, in hope of gaining more bookings, it can actually work against you—the event organizer might look at your low speaking fee, and then doubt that you will actually bring value to the event.
Low speaking fees will result in being hired for low budget events
There are always going to be organizations with low budgets—whether they are just starting out, or they are an NGO, or they are simply small scale, but it doesn’t always mean they are shoddy, cheap, or not worthwhile. They can be for a great cause, or they could just be on the cusp of growing into something great.
But there are also a lot of events that are simply cheap and low quality. They want to get as many attendees as they can paying for seats, while shelling out the least amount of money possible so that they can make a high return on their event.
And they will be swarming around looking for inexpensive speakers.
Often, they are not overly concerned with the quality of their event, will try and get as many volunteer and inexpensive speakers as they can to bolster their speaker list, and will prioritize cost-cutting over offering attendees a quality experience.
They will most likely end up asking you to do a lot of extras for free, promising exposure and large audiences while trying to extract as much value out of you as they possibly can at the lowest rate they can get away with.
The problem with setting a low rate is that you will end up attracting these types of event organizers.
And while these kinds of events might be alright for testing out new material, or getting more speaking practice under you belt—the truth is that they won’t help you build your business or reputation. They will end up sucking up a lot of your time with very little benefit for you.
Let’s say you are the the head organizer for Social Media Week LA, and one of your speakers just had to cancel—is their first thought going to be “I wonder who is the cheapest speaker I can find to replace them?”
Honestly, that is probably the last thing they will be thinking about.
They can’t afford to risk their reputation on hiring a cheap speaker, and won’t risk messing up their million dollar event on someone just because they have a low speaking fee. Sure, money is less of an issue for them, but they earned that reputation by putting quality before cost-cutting. They are credible because they didn’t hire low-budget speakers.
A lot of speakers tell us that they are finding it difficult to scale their speaking business.
They say things like “I am working regularly, and going to and from different events, but I can’t seem to make enough to make this viable, and I am too busy to do it all myself.”
They become exhausted and feel like throwing in the towel, and understandably so.
It’s difficult to try and do everything yourself, and while it might be tempting to think that if you just put more hours in, you will eventually get there, the truth is you run the risk of burning out before that ever happens.
If you are looking to scale your business, you are going to need to be adding to your bottom line.
Having some extra income will help you start paying for things like:
Extra help
Instead of trying to get your own speaking engagements, you could hire a lead generator. Instead of managing all your emails and calendar and travel plans, you could afford a virtual assistant to take some of that pressure off. You could hire a bookkeeper to help you manage your finances. You could hire a designer to make your slides look more professional.
A business coach
Hiring a business coach is a next-level strategy to help you scale your business.
What makes a business coach different from an online forum, networking group, or mentor is that they will look specifically at both who you are as a speaker, and how you are running your business. Even if it is just for a few hours every couple of months, that focus is going to be fixed on helping you grow your business.
High-quality promotional material
With a top-notch speaker reel, a professional and well-designed speaker website, and a bit of social media advertising, you can increase the odds of getting hired for quality events, increase your credibility, and access new audiences.
Some speakers see these as nice extras, but in 2019, having an online presence is a must.
If you don’t have these things, it could hurt your credibility and keep you from being able to land better events.
Multiple revenue streams
The trick to making money as a speaker is to create multiple revenue streams so that you are not 100% reliant on actual speaking engagements to earn your income.
But if you are working (for low fees) all the time, you won’t be able to set time aside to cultivate and create these streams.
Adding to your bottom line means you will be able to afford to take the time to write a book or develop a course, which will help you make more money, and grow your business in the long run.
But if you are getting paid a low fee, you aren’t going to be able to scale. You won’t be able to afford the things that it will take to build your speaking business.
Meanwhile, you will still be working hard, going to and from different events, traveling, and hustling more speaking engagements, but you won’t see much growth, because growth takes being able to scale, and you can’t scale if you are scrambling at the bottom.
We want to be clear here: the goal is not to rip off and fool event organizers with crazy rates and run away with their money.
This would be very bad for your credibility and could jeopardize your entire business.
You want to ask for an honest rate for the value you will deliver.
There is a pretty big divide between how much speakers get paid, and many speakers don’t know what they need, don’t know their worth, and don’t know how to ask for what they deserve.
And while it might seem simple to say “Just increase your fee,” we are guessing that a lot of speakers will probably need a little more help than this.
How much should you increase it to?
How much is too much?
If you increase it, how can you be sure that event organizers will actually pay you that?
Let’s sort through it.
Tip 1: Figure out what your baseline fee needs to be.
Your baseline is how much you will need per session for your business to succeed.
Start with how much money you would need to be comfortable in a year (an approximate salary) then reverse-engineer it.
Let’s say you made $70,000 doing 45 speaking engagements last year
This would make your average speaking rate around $1,550.
Here are just a few things to take into consideration:
Your tax rate (for example: 20%)
Benefits for you and your family (for example: 25%)
Speaker bureau or agency fees (for example: 20%)
Booking agent’s fee/assistant’s salary (for example: 10%)
There goes 75% of the fee. That leaves you with $388.
This would work out to a yearly income of $17,460.
Is this enough for you to live on, let alone market and scale your business?
If not, you are going to need to increase your speaking fee.
Work out a rate per session that has the additional costs built in, leaving you with an appropriate amount of funds.
Once you have this, use it as the minimum fee you will speak for.
(This formula originally appeared in our article “The ultimate guide to setting your speaking fees”)
Tip 2: Learn to negotiate your fee like a pro
Next, you are going to need to learn how to negotiate with event organizers to make sure that you don’t end up accepting less than you need.
We’d suggest jumping over to our article “A guide to negotiating your speaking fee”
Tip 3: Jump in and start charging more.
Lastly, you just have to do it.
Once you know what you need to be able to scale your business, and you’ve researched the events and roughly how much they can afford to pay you, you are going to have to bite the bullet and start putting out your new speaking fee.
You may feel a little nervous the first couple of times—but you are a speaker, you’ve got nerves of steel! (Ok, not all the time, we know...but a bit of extra encouragement never hurt.)
We are always striving to help you scale your speaking business, get more engagements, and become a more successful speaker. This article was intended to help you reach a bit further.
We would love to hear your success stories. If you read this and were encouraged to reevaluate your current fee, we’d love to hear about it! Contact us here.
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