The typical freelancer spends his or her energy on the technical craft–writing coding, design UI, creating plugins, etc. Yet the most important skill for your success and livelihood is pricing. By learning to price well, you can be selective about your customers and the type of work you do. And, you can actually work less while making more money.
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Learning to Price
- What is the most important thing you can share about pricing?
- Serve your customers well by making sure that your price is worth the return on investment.
- Focus on serving the customer well and pricing will follow.
- Refer the customer to someone else if they will not receive a good ROI.
- When did you realize pricing was a skill you needed to learn?
- Become technically proficient at your job first and then focus on the business.
- Double Your Freelancing Rate was his inspiration to change his business model.
- Start reading to learn about pricing and business.
- His business doubled after he shut off the TV and started reading.
- How did you price when you first started your business?
- He blindly guessed using an hourly rate.
- The faster you get at your skill, the less you make billing by the hour.
- Many developers learn this and switch to flat-rate billing.
- When you become faster and more knowledgeable, you should be making more.
- What was the next step in pricing for your customers?
- Flat rate was his next step.
- Initially, he did not charge for scoping.
- He was guessing and sometimes made as little as $25/hour.
- Curtis now does weekly pricing.
- The business is not just his business; it is a partnership with is wife.
- Your spouse or partner should definitely be part of your business.
- Mastermind groups can help you with your business.
- How do you apply weekly pricing in your business?
- Context switching is a challenge for Curtis.
- He is able to maintain focus on a project and start where he left off the previous day.
- Experiment with pricing and find what works for you.
- Curtis considers the customer, what is needed, including adjusting up for dealing with bureaucracy.
The Value of Onboarding Customers
- How do you start the value conversation with a customer?
- If a customer has not evaluated what their membership site is worth, they start there.
- He asks about the current value they are receiving and how they want to increase it.
- Cart drop is another area. 50% abandonment is normal, but you can recoup up to 30%.
- When there is resistance to the questions, he will accept a range.
- If the customer will not answer the questions, it is a sign of an adversarial relationship.
- If he cannot verify with numbers that he can help, he is not willing to guess.
- Caveat: Sometimes you need to eat.
- How do you conduct the onboarding process with a customer?
- Every customer, with a very rare exception, gets the same email with the same 5 questions:
- Why do you need this feature?
- Has anyone internally been asking for the feature?
- How are we going to measure success?
- What is your budget? (Curtis is willing to work with ranges.)
- What is your timeframe?
- He may revise the first three questions based on the specific need.
- If they claim there is no budget, he will offer a price range until he hears it is too much. (Then you know the budget.)
- You have to like the customer.
- Financial stability helps you say “no” to customers you cannot serve well.
- Every customer, with a very rare exception, gets the same email with the same 5 questions:
- Do you take value into account when you are setting a price?
- He is just starting to take value into account.
- He is looking at intangible value as well as a technical standpoint.
- Reducing time spent in certain activities is a value gain as well.
- You can discover value that the customer has not even considered, which can increase the budget.
- Enter the relationship as a consultant and partner, not a coder.
- Why is it important for a freelancer to learn about pricing?
- Do not guess.
- Pricing feels hard.
- Be bold with your pricing.
- Guessing does not ensure that your customer is getting an ROI.
- The Price is Right by Chris Lema will help you price your business.
- Charging hourly is the biggest mistake a freelancer can make.
- For weekly billing, Curtis gets paid in advance for the work.
- By billing weekly, both the customer and Curtis can walk away if it is not working.
Customer Objections and Software Bugs
- How do you answer the question, “Have you ever done this before?”
- This question references his blog post No, I Haven't Built ‘Exactly' Your Solution Before.
- The answer is probably not.
- Curtis builds things that have not been built before.
- The customer must make a magic leap to see how the other things apply to them.
- No one is your business; no one has your exact needs.
- Every situation is truly unique.
- Part of a previous solution might be able applicable, but not often.
- Why is it your fault if the customer does not recognize value?
- Any good contractor will look for the reason it is his fault.
- If you have a bad customer, it is your fault.
- If you are an expert, act like it.
- Do not let the customer drive the ship.
- As a hobbyist photographer, he was able to advise a customer on how to improve a video presentation to create value.
- Because you serve your customer well, you get paid well.
- Do you send cards when you begin/end a project?
- Provide service so good that your customer will not go somewhere else.
- How do you explain “bugs happen” to a customer?
- In custom software development, there will be bugs.
- Buy off-the-shelf software if you do not want bugs.
- You should account for bugs in your budget.
- What is one of your best stories about creating value for a customer?
- On a Friday, they could not sell a $10K piece of software.
- By Tuesday, their online store was working and they made the ROI with the first sale.
About Curtis McHale
Curtis McHale has been a web developer in the WordPress space for six years. He specializes in e-commerce and membership sites. Often he is the “go-to guy” when nobody else can get it done. He pursued a counseling degree at Columbia Bible College, but later discovered his true calling was web development. He enjoys bike riding and made a 4-day bike ride from British Columbia to the Oregon coast for BeachPress.
- Curtis' Website: SFN Design
- Curtis' Blog: CurtisMcHale.ca
- Curtis on Twitter: @CurtisMcHale
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