We entrepreneurs and small businesses are strange and fearful creatures.
Our career choices make us feel vulnerable at times, afraid that nobody will pay for our offerings. On a bad night, even the most confident among us hears the lonesome howl of an empty sales funnel echoing in our ears as we try to sleep.
I’ve learned to drive that howl away by making sure that fresh clients come to me already primed to pay the rates I want. How? Well, there’s just one step to this technique:
State up front and in public the amount you’d like to be paid.
I’ve learned many insanely useful lessons from Firepole Marketing, but one piece of advice that really worked for me was, “Ask for more money.”
I took that idea and pushed it beyond my comfort zone. Not only did I double my rates despite having just lost my biggest contracts, I also published my new rates loud and clear on my business website and my online freelancer profiles, for the entire world to see.
The results were astonishing.
I now earn the same amount of money in half the time, and I spend less time in negotiations, too…
Why Missed Opportunities are Good for Business
I know a lot of freelancers and small businesses don’t like to discuss prices early in the relationship with a potential client or customer. If you talk cash too soon or price yourself too high, we’re told, your prospects will cut and run.
As Danny Iny says in the Naked Marketing Manifesto, we’re afraid of missing opportunities.
But think about it clearly: do you really want an opportunity to work for less than you’re worth? No, you want opportunities to do what you love and be paid what you ask.
Do you really want an opportunity to waste time haggling with someone who understands what you offer but doesn’t want to pay a fair price? Nope. You’ve got better things to do.
Be Proud of Your Price. It’s Fair, Isn’t It?
The other common objection to publishing your prices is that – shock! – everyone will see them. That could mean you miss out on opportunities to charge more to a richer customer for the same product or service.
You may hate me for saying this, but… why do you care? If you’re doing the work you want to do, and being paid the amount you ask, does it matter if you could have had more?
I often hear the old tip that you should find out how much someone can afford and then charge them exactly that amount (if not slightly more). That’s a tired tactic. People can see right through it, and they resent you for it.
Look at it this way: what would you do with the extra money? Is it truly worth doing? If it is, then your standard prices should take it into account. So recalculate your price, and advertise the new one. It’s that simple.
Make sure the amount you’re asking for your work is the amount you truly need to deliver great value. Then tell the world what you’re worth.
That may sound scary, but I’m pretty sure most business owners have had the occasional soft-focus dream of customers saying, “Name your price! I’m so happy I don’t even care how much it costs.” Am I right?
So, go ahead. Name your price. Then all you have to do is bring the happy.
The Awesome Benefits of Your Price Tag
Making your prices public reduces time spent handling pricing enquiries, and avoids the frustration of dealing with enquirers who want to buy, as it were, designer goods at knockoff prices. (Unless you sell designer goods at knockoff prices, in which case I’ll bet you still have to handle hagglers.)
From the customer’s point of view, seeing the price –or even a pricing guideline– eliminates the fear of an unknown variable, so people don’t run away without even daring to ask about cost.
From your business’ point of view, well-chosen pricing will support superb work, constant improvement and fair rewards for everyone involved.
From everyone’s point of view, your prices are fair because if they weren’t, you’d be ashamed to publicise them so boldly.
A neat trick of human nature lets us believe that anything done openly and confidently must be acceptable.
The opposite is also true: the more you weasel around your price, the less reputable you seem.
How to Clear the Fear and Cut Through Negotiations
Ever heard the joke, “if you have to ask the price, you can’t afford it”?
Your customer starts from a perspective of fear about your pricing. A blank price tag gives your clients the wiggins.
- They’re afraid that your price will be blood, or their firstborn child. Or end in a 7.
- They’re afraid that you’ll up the price when you see how much they want what you sell.
- They’re afraid that if they contact you, you’ll pressure them into paying more than they can afford.
The sooner your customers know the cost, the sooner they can relax enough to decide it’s worth paying.
They can check the price, inspect the goods, and estimate the return on investment, before you even know they exist. By the time you hear from them, they’ve already decided the price is acceptable.
Here’s How I Doubled My Rates and Halved My Unbillable Hours in 6 Weeks
At the end of May 2012, I’d just wrapped up freelance contracts with my 2 biggest long-term clients. In the slight lull that followed, I was the one who got the fear. My first instinct was to drop my rates to ensure I snagged some new clients, fast.
But I also wanted time to work on my mission at Be A Freelance Blogger, helping people use their everyday knowledge and ideas to make money by blogging for hire. That meant I needed to work fewer hours without losing income. So I went against my gut and upped my rates by 50%.
I was surprised to find work right away at the new rate, but the surprise wasn’t over. On May 30th, I downloaded the Naked Marketing Manifesto and that sparked a business boost that’s still burning hot.
I loved Danny’s take on the facts of life for small business marketing, so I watched the (free) “Get More Cash” video series. I took the part about asking for more money very seriously, since I’d just done exactly that and it had worked like a revenue boosting bombshell.
I reasoned that asking for even higher rates would give me the financial freedom to focus on delivering powerful results. In other words, I wanted to stop thinking about paying the bills and start focusing my full attention on the work.
So I took Danny’s advice and asked for more money again. I upped my prices by another 33%, bringing my hourly minimum rate to double what it had been just 6 weeks earlier. This time, I also published a price list on my website.
Again, I got work right away at the new rate. I got people calling me up, having already seen my rates online, wanting to hire me. I stopped getting emails from people with zero budget hoping I could work a “free trial”, and I cut the time I spent giving quotes in half.
Name Your Price and Command Respect
One more real-life example: two weeks ago, I got a message from a client whose copy I wrote in 2009 at a price of £60 (roughly $95) per 1000 words. They wanted to work with me again, but my new rates meant they could only afford one hour of my time each week instead of several hours.
They still booked that single hour per week, and paid in advance to be sure it was reserved for them. Why? Because they see that as the cost of hiring a professional dedicated to over-delivery and mutual awesomeness.
Clear and concrete pricing knocks the socks off “Oh, it costs… well, what’s your budget?” for a pricing model.
It puts your prospects at ease. It makes your negotiations simpler. It saves you time and stress. It shows respect for your customer’s needs, and that makes them more inclined to respect you in return.
It also shows that you’ve put some thought into calculating the fair price for what you have to offer, not what you have to gain. Your customers appreciate that.
5 Things to Do Right Now to Get Paid A Fair Price
- Figure out the right amount to charge. Put some thought into this, but don’t procrastinate!
- If you don’t have a pricing page on your website, put one up.
- Publish your new prices, or minimum price guidelines if you prefer.
- Charge new customers the rates published on your website.
- Let your existing clients know that your prices are going up, with a generous lock-in period at the old price.
Don’t let fear stop you taking these 5 steps. None of them will knock the world off its axis, but each gets you one step closer to the wage you deserve. You can get paid what you’re worth, and you’ll get a big confidence boost the moment you realise this. Do these 5 things today – today! – and be fearless!
Let me know how your price changes are going in the comments section. I’ll be around to cheer you on!