Comments on: Cup of Joe: It’s All About The Benjamins

By: Leslie

Leslie — Tue, 16 Feb 2010 15:58:45 +0000

I found that I was getting loads of work, far too much work. I was working night, day and weekends trying to keep up with it all – my head felt ready to explode.

I cut the lowest paying client and have increased substantially the amounts I charge.

It is still in flux for me and can still feel like I am pushing the limits of my pricing too much – however not one new client has tried to haggle the price down…

I have a lot more time to do the jobs I get. This for me is good, as I was starting to feel like no-one was getting a good deal when I did not charge enough – my head was sore keeping up and the client jobs could have been better. It feels good to have time to do a good job.
.-= Leslie´s last blog ..Google Buzz for Business & Get Your Wallet Out =-.

By: Chuck Reynolds

Chuck Reynolds — Wed, 10 Feb 2010 07:17:59 +0000

Good post – I find a LOT of freelancers struggle with this… they’ll write-up a whole estimate in 30min and sit on the price for hours and hours. I did for a long time too – and once in a while I still will because I do want to help out the little guys at times and know market value isn’t exactly what they could pay but if they’re nice and can tell they’re easy to work with I’ll give them a break. Granted that’s bit me in the arse once or twice but usually my experience steers me good.

Confidence is a big part of this as well tho – you get a shaky kid handing a $20k estimate for a site it’s likely they won’t buy into it.
.-= Chuck Reynolds´s last blog ..People Don’t Buy What You Do – They Buy Why You Do It =-.

By: Anatomy of a Hands-on SEO Site Audit – Part 1 | Search Engine Journal

Anatomy of a Hands-on SEO Site Audit – Part 1 | Search Engine Journal — Tue, 09 Feb 2010 14:59:29 +0000

[...] These days, I get the rates I do because my audits and action plans are the lion’s share of what I do. Probably 80% of my work comes from agencies who hire me either exclusively for this work, or for this work followed by overseeing the team that does implement (either that agencies team or their end client’s team). It also helps that I wasn’t afraid to charge the rates I do. I no longer live in fear mentality when it comes to that topic. Instead, I operate based on value pricing. [...]

By: Joe Hall

Joe Hall — Sat, 06 Feb 2010 20:37:38 +0000

I think it depends on what business you are in. If your business is the type that requires a portfolio, then you might want to do some early work under market price, to grow your portfolio. But if you are selling a product directly to consumers, I don’t think going under market prices is smart. Either way, value based pricing is a smart strategy for long term growth.

By: Digitivity @ The Digital Life & Tools Blog

Digitivity @ The Digital Life & Tools Blog — Sat, 06 Feb 2010 20:22:42 +0000

Well, but this is assuming you already have a business going with a lot of customers.

If you’re just starting out (i.e., from employee to independent), you’ll have to charge less than the market for a while until you get established, right?
.-= Digitivity @ The Digital Life & Tools Blog´s last blog ..Dreamhost Problems Status RSS =-.

By: Joe Hall

Joe Hall — Sat, 06 Feb 2010 17:44:11 +0000

Thanks for the tip David. btw, I didn’t say billing in the post, i said pricing. Thanks again!

By: Joe Hall

Joe Hall — Sat, 06 Feb 2010 17:36:34 +0000

Yes, you are right. This strategy works best with trusted brands. However just because the internet is a price driven market don’t assume that your prospective clients are in touch with the pulse of the market enough to find a lower rate. Most of the folks that come to me for a quote are there through a referral which means they don’t know who to go to themselves, in which case they aren’t in a good position to find the market price.

By: Joe Hall

Joe Hall — Sat, 06 Feb 2010 17:31:59 +0000

Is this your polite reminder that I should be backlinking more? LOL

By: Andy Beal

Andy Beal — Sat, 06 Feb 2010 17:21:10 +0000

Thanks!

By: Jordan McCollum

Jordan McCollum — Sat, 06 Feb 2010 17:10:13 +0000

That’s awesome! I’m totally jacking my prices up, LOL.

Andy wrote an article on a similar principle a while ago—say no to clients when they ask for additional services for free:

http://www.marketingpilgrim.com/2007/01/increase-marketing-agency-reve nues-saying-no.html

By: David Winch

David Winch — Sat, 06 Feb 2010 16:48:59 +0000

Great stuff here Joe. All I’d add is that folk need to be a little bit careful with their words.

I’m not sure the correct price is the highest amount the market is willing to pay. I think it’s about both parties feeling they are getting a great value in return for the investment they put in. If this is a little less than the absolute maximum, so what. You spent less time getting the deal and you achieved a highly acceptable deal, as did the customer. Helping the customer understand the value that they will receive (not TELLING them btw) is vital to the process.

And the technique is value based PRICING, not value based billing! Billing is after the event, and that’s far too late. Pricing is before the deal is struck and that’s exactly right. You have to spend the time getting the customer to understand the full value, the total difference it will make, to no longer be suffering his problem. If that’s not possible, you have to recognise you’re competing in a commodity market, but even here you can choose to compete as a Ferrari or as a bicycle!

Hope this is helpful.

David

By: SFaith

SFaith — Sat, 06 Feb 2010 16:46:55 +0000

What you’ve said makes absolute sense. But it can be a frightening position to take for freelancers who mainly market their services via the net. They are competing in a global marketplace in which freelancers from low cost of living countries can easily undercut them.

I think it might be a good idea to work for less than you really want until you’ve proven yourself and built strong relationships with several clients.
.-= SFaith´s last blog ..Feb 4, Start An Ambulettes Business – Provide Non Emergency Medical Transportation =-.

By: Sean Odell

Sean Odell — Sat, 06 Feb 2010 16:05:48 +0000

The way that we bill our customers is very important especially when it comes to Internet businesses. Potential clients want to know how much they are paying up front for services. This can become a challenge for services that require an estimation of time to complete such as creating logos, web development, etc. The Internet is such a price driven marketplace that some business tend to charge such a low amount that they end up working for a very low wage.

By: Alan Bleiweiss

Alan Bleiweiss — Sat, 06 Feb 2010 15:02:35 +0000

OMG Joe! By using this mentality, I recently doubled my rates across the board. This then allowed me to either a) bring in twice as much annually, or b) work half as many hours on client projects and do more of what I love in other ways. I chose “b” for now. Which leaves me lots of time to always pick up additional income if and when I choose to.

And it also means I have only clients who truly appreciate and respect my services!

By: Joe Hall

Joe Hall — Sat, 06 Feb 2010 14:27:10 +0000

Your right Andy, you do have to be confident when quoting. I also have noticed that I am more likely to get them to agree on a quote of its layout is clean and professional. I would advise anyone just starting out to get some invoice software. It will not only help you organize your money flow, but it also will help you create awesome looking invoices and quotes that command the respect that you deserve.

By: Rob Mangiafico

Rob Mangiafico — Sat, 06 Feb 2010 13:28:28 +0000

Right on the “money” Joe! If you want clients to value your business, you have to make it valuable! Price yourself as a premium provider of your goods and services, and your image will be one of quality. Of course you have to deliver quality, but assuming you already do, you’ve just established your USP (unique selling position) and it’s profitable too!
.-= Rob Mangiafico´s last blog ..Getting the Most Out of the Oprah Effect – How LexiConn Helped Cosabella Increase Sales 2000% =-.

By: Andy Beal

Andy Beal — Sat, 06 Feb 2010 12:41:17 +0000

Great advice Joe, and exactly what I tell SEO firms that come to me for business coaching. When you get to 85% of capacity, you should start increasing your fees. You’ll be surprised at how often prospective clients are willing to pay based on value. And the extra fees help cover the cost of hiring new employees to increase capacity.

The key is to be confident when quoting your new price–clients can smell fear!

Although confidence is something I know you don’t lack.