Imagine for a moment that you’re driving down the highway and you’re low on fuel.
You pull off at the next exit and see two gas stations. To your surprise, the one on the right side of the street wants $4 a gallon, but on the left side of the street they’re only asking for $2.
Where are you going to fill up?
For most of us, the answer’s obvious: at the cheaper station. After all, gas is a commodity. Shell and Exxon both sell the same product, no matter how hard they try to differentiate themselves.
So why do we question why our clients balk when we try to command a higher price or reach beyond the invisible ceiling of “market rates”? If all we’re selling is words, why should they pay you twice as much as what I’m proposing?
Value-Based Pricing: Your Escape from Commodity Pricing
Once upon a time, I ran a decent-sized web agency. Like most, I charged around what I heard other people were charging.
After all, there’s an acceptable rate for what we do, right? Wrong.
As we grew, I started really looking into the psychology behind pricing. Why do I buy stuff? Why do my clients buy from me? And why do I win some proposals and lose others?
And as I started researching, I quickly realized that I wasn’t being paid for my work. No one was paying me to write code, create designs, or author words on their behalf — they paid me because they wanted to solve a business problem.
Let the Problem “Anchor” Your Price
Once I came to this realization and started peeling back the layers behind each project request, it was pretty easy to use a little Socratic questioning to uncover the “why”s behind a project.
No one was asking for a new site for their restaurant. They were asking for more walk-in customers.
Nor did the local ecommerce retailer want a “fresh redesign,” they wanted more profit so they could expand faster.
And by positioning the work we did toward that end, and treating our craft simply as the vehicle that got us there, we ended up changing everything. Our initial meetings focused more on them, and less on us. Our proposals focused on delivering a return on investment, and not a fancy project brief. And our work was always constrained by, “Will doing this help us get closer to the goal?”
When you’re talking with a prospective client, try to determine why they want more content added to their blog. What’s the real reason behind their project request? (Hint: it has nothing to do with words.)
Once the focus shifts away from you and your skills, and more toward the client and what tomorrow looks like for their business, concerns over price will largely be a thing of the past. You’ll be confident with what you charge, because you know what impact you’ll have on their business.
Win Training to Raise Your Rates
In today’s prize contest, everyone’s a winner: every commenter will get a special code to access my in-depth video training program. 🙂
All you need to do is leave a comment before the end of January 14th, 2014, and tell us what stops you raising your rates!