Part 1 of a two-part series
Ever feel this way?
The estimate I give doesn’t reflect the work I do.
There’s nothing quite like getting paid $500 for $5000 worth of work to strip you of your confidence, make you resent the human race and drive you to do the unthinkable — looking for a JOB.
I’ve been there too, and so have some of my clients who have years of professional experience and top-notch expertise as business, marketing and creative consultants.
When you start a business, you just want clients. Most consultants and business owners are hungry for work and will take almost anything.
But then this thing happens.
You’re flooded with deliverables, projects, demanding clients. You’re working crazy hours and yet you’re still struggling to cover the nut.
You give. And give. And give. Away. Too. Much.
Giving is good of course. Accept when you give so much that you’re screwing yourself over in return.
This drives me crazy when it happens to me.
It drives me crazier when I see it happen to business owners who have mad skills, deliver excellent work and get valuable results for their clients.
Newsflash: Most of those clients you’re delighting are not going to volunteer more money. They know they’re getting a killer deal. They’d pay more for your services, but most (none maybe) won’t tell you that.
It’s up to you. It’s up to you to command what your worth. It’s up to you to set client expectations and spell out the boundaries.
You are the boss. So lay it down LIKE A BOSS.
This has been one of the trickiest lessons I’ve had to learn over the last few years.
We’re not only service providers, we are business owners.
So make, set, bend (sometimes) and enforce the rules.
Also, implement some or all of these strategies to prune away the crazy hours and penny pinchers.
Rethink your pricing model
If you have to work a mikillion hours to cover your bills then it’s time to take a close look at the ways you get paid for your work. There are myriad ways to charge for your services . . . and you don’t have to pick just one. You’ll hear all kinds of advice on this, but it’s up to you to figure out how to handle it. I mostly have package pricing, which has worked well for me most of the time, and has seriously hurt me others. Because of that, I now know when hourly pricing makes sense (though I still tend to stay away from it). There’s nothing inherently wrong or bad with hourly, flat fee, value pricing, commission, barter, monthly or retainer pricing. What can be bad or go wrong is how you apply these, how often and at what rate. You can make a living off of continually bartering. At the same token, you don’t have to take barter off the table. I recently made a $7500 investment in my business and struck a barter deal. I’ll give you $2000 in marketing consulting. This worked for both us because we both feel it’s a fair exchange.Bartering as a main pricing strategy will put you out of business fast. It’s really more a “bend the rules” option.
Give yourself a raise
When was the last time you gave yourself a raise? Three months ago? A year ago? Never? When I work with creative consultants, I see the doubt and fear wash across their face when I tell them to raise their rates. And I wrestle with that doubt and fear too everytime I raise my rates. They ask me Will people pay for this? And the answer is yes, the right person will pay for it. I only work with professionals. My clients are sometimes newer in their business but many of them have 15 or more years of career under their belt. They absolutely deliver value. The right people pay for excellent work. The answer is to find better clients, not stoop to everyday low prices (you ARE NOT Walmart). Yes, it can be a little scary because raising your rate is a split second decision that does take some time to fully implement and get results from. Yes, you will lose some clients. You will also need a smaller number of clients to make the same amount of money or more. You will not make less money by raising your rates, as long as you also get clear about who will pay your rates.
Stand for your value
So, this takes guts but you’ve got to be willing to say no and walk away. Over the summer I had a client who asked me to provide a lower rate for work that I did. At first I was anxious and then I got mad. I’d already done a different project where I went above and beyond and felt like this client had gotten way more than what she paid. That’s when it hit me. I hadn’t taken a stand and I had been yielding to her on several other things. Little things, but things that were counter to how I typically do business. Whether she was consciously doing it or not, she was taking advantage of my flexibility . . . and I had to put a stop to it. This is part of being a business owner. Setting expectations. Educating clients. Reminding them of your value. Drawing a line in the sand. Do this firmly and respectfully . . but do it! This is the email I sent back to my client:
I can understand requesting suppliers to reduce rates, and while I never like to say no, my rate will stay the same.
What we can do is adjust blog post length. This was a lengthy post at ### words. If we keep the posts around ### words then the price would be $$$.
I enjoy working with you and the ____ family so just let me know how you would like to proceed.
Be clear, direct and willing to walk away. My client agreed to adjust what she was getting rather the price and we’re still working together today.
Get paid to do proposals
OMG, can I just tell you about this brilliant idea that I wish was mine?! I originally heard about this from Perry Marshall and instantly began recommending this to all my clients (and applying it to my business). In my years as a marketer and PR director proposals were the lifeline of new business. And yet, it always seemed ridiculous to spend 60 hours to pull something together for a 5-25% chance of getting the work. I always felt like there had to be a better way.
There is. The process is called discovery (you can name it whatever you want though). Instead of running off to write a proposal after a 30- or 60- minute conversation with a prospect, explain to them that you you need to get under the hood of their business to better understand the problem and provide a solution that’s actually going to work for them. How can you truly know what their problem is from one conversation? Without discovery, proposals are a waste of your time and their time, so charge them for your efforts to really figure out what’s going on. Chances are they’ll want you to implement the solution but even if they hire someone else, you still get paid. Way better than spending 60 (or any) hours on free work right?
Stay tuned for three more changes you can make to get paid what you’re worth. In the meantime, which of these strategies will you use to command the fees that reflect the value of your work? Why?