A Pricing Challenge for Those Earning Less Than $70,000 Per Year

The last posts on pricing were quite telling. Some of you have a clear idea of the most lucrative way to price (e.g. based on value), and some of you seem to be stuck in a quagmire of low hourly rates.

For those of you in the latter category, would you like to get out of that quagmire?

The next time you are talking to a prospect about work, try this approach:

1. Ask lots of good questions about the business benefits your solution will provide (e.g. “What are your business goals with this project?” “Assuming your web presence is a success, how much more do you expect to generate in revenue?” “How will it feel to have a more professional web presence?” “What types of clients might you be missing now with the web presence you have?”).

2. Tell stories about the value of your solution, based on what other clients (or clients of other web designers) have experienced.

3. Then give a quote. Sometimes I even ask the prospect what they are willing to pay to get that value, and then tell him/her what I can do for them (and can’t) given their budget.

Or, if the above is too scary for you, and especially if you are charging less than $35 per hour, do this:

Next time you quote a project, TRY to ask for 50-100% more than your usual rates. See what happens. Worst case, you “anchor” the prospect at higher rates and get them wondering what you provide that is so great. You can always come down, and suddenly 25-50% of your usual rates won’t sound outrageous to them.

Try one of these approaches. They are piecemeal to a degree, and don’t cover everything you need to do to get high rates.

But try anyway. If you don’t, then you have no right to complain about “low pricing self esteem” or about being unable to price your services to get the rates you want.

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  • http://www.delyrical.com davidjmedlock

    Good points Andrew.

    I find that there a few key things to learn in pricing:

    1) Confidence. You provide extremely valuable services, experience, and skills. You’re good at what you do and you’re worth every dime you’re charging.

    2) Selling yourself. If you can sell yourself, you can sell anything. Don’t go in there with a product or a service, go in with yourself. Make small talk with the prospect, get to know them, let them get to know you. Talk about what they need. As you hear their needs and concerns, bring up services that you offer that can fill those needs and ease those concerns. By the end of the meeting, you’ve got them sold.

    Just my $0.02, but I do think that low hourly rates reflect a lack of confidence, either in ability as a web designer or more commonly, ability as a sales person…

  • http://www.creativearc.com creativearc

    I agree. They aren’t buy a Web Site. They aren’t buying an E-commerce solution.

    They’re buying YOU! Anyone can offer those services, however not everyone can do what YOU can do. If you have that in mind, it can be a lot easier to sell yourself.

    When many web designers start on their own, they feel that their skills are what is going to sell. You’re good, so people will buy – right? Wrong!

    I’ve had lucrative Web Contracts from large companies that have no clue how GOOD their Site is. If I delievered something that was, in my opinion, of lesser quality, it would still probably be ‘good enough’ for them.

    Instead, these companies want someone they can trust who can deliver VALUE. Like Brendon Sinclair says, a high price tag can be a bargain if you can communicate the value.

  • http://gislaved.net/ Gislaved.net

    This is what I needed to hear. Not what I wanted, but what I needed. Thank you!

  • http://www.manitcor.com Manitcor

    A lot of people I iminge have trouble becasue they get into the indie market thinking an interview is like a classic “Im going for X position” interview.

    This is hardly the case in our industry you really are selling yourself as previous posters have mentioned. Don’t allow yourself to get into the trap where they ask you a list of questions and you anwser them.

    They are looking for someone who can do the job so dont tell them how you can do it or what your skills are. Show them.

    I find it very effective to get the client to start talking about thier deployment. Try to get them to mention a few of thier technical challenges and do some light consulting right there on the spot. If they mention they are having trouble getting a solid brand on thier site, talk about the methodologies and technologies that are involved in making that work.

    If they have a large database and they need a reporting system don’t mention your expierence so much as explain to them some of the best ways to deploy such a system in thier kind of enviorment.

    If at the end of the interview youve asked more questions than they have and it went more like a conversation around the watercooler as opposed to a spanish inquisiton then you most likely landed the gig.

    Its key to know how technical or non-technical your intervier(s) is to because being too techincal to a business person can sacre them off becasue they will feel you cannot communicate effectivly while not being technical enough with a technical person will make it look like you are using a lot of jargon to cover holes in your skilset.

  • ben

    The advice to ascertain business goals up-front is instructive…

    The failure to articulate business goals (even simple, pro-forma ones) is almost always a red card. Why?

    1. They’re getting a site on impulse, and likely to experience buyer’s remorse down the line. When the other shoe drops the vendor gets the blame, no matter how reasonable their rates.

    2. Change requests will go out of control. Count on it.

    3. Most important, since the client doesn’t know what they want, they don’t know what they’re going to get – and therefore, there’s no way to prove that they got what they paid for. To anyone serious about building a list of steady accounts, that outcome is poison.

  • karunnt

    Small story:

    My uncle, a real estate agent told me about going to a mall with the intention on buying a pair of shoes. But on the drive home he realized he had bought four pairs.

    However he didn’t regret the purchase because the salesman had done such a good job selling him on the value of what he bought.

    The goal may be to build the perception of value in the client while still building a quality product.

  • Nikobass

    Just a question, who’s in link of what all of you said. I know that I’m good with what I do. But, how can I sell myself ? Do you some advices ?

  • huskerchen

    I agree that confidence is important. My mentor told me that is the most important “skill” because you sell yourself before you sell any of your products or services.

  • Dorsey

    This is in response to the idea that “you can always come down”. Be aware that changing your price is difficult to do while still maintaining credibility; something of prime importance to the customer. Once you set a price, stick with it. This is not to say that it cannot be changed, but only in response to the customer’s input. To raise the price, you have to increase the project scope; to lower the price, you have to cut back on what you deliver. This is up to the customer.

    Government bidders do this all the time. They go in with their “best” price, and then trim or add here and there to develop “best and final” price. While these are huge projects with possibly hundreds or thousands of people and millions of dollars, the principle is the same.

    Think of it from the customer perspective. If you quoted $X, then lowered it to $Y simply because I (the customer) resisted, why would I not continue to resist to keep you digging lower and lower? On the other hand, if your price is firm, but more than my budget, I’d be inclined to trim or exchange features to get the price in line.