A Word About Pricing
this chapter would not be complete without a word about pricing, pricing is a world with so many nuances, so many subtleties. While naturally we could not afford to cover all aspects of pricing in this course? What we can do is give you some benchmarks and tactics to use when setting your prices usually, and unless your reputation is well established, pricing will be a deciding factor in whether or not to hire your services, let's consider some of the vibrators that you need to take into account before quoting your clients. First of all, how much of your time will you need to dedicate in order to complete the job? It's one price if this job is so demanding that it prevents you from working on other clients and it's an entirely different story. If it's a job that you can squeeze in between your existing commitments. The second thing to consider is the urgency. If you're talking in january about a project that needs to be carried out in april, then of course you can plan your time and pr...
epare accordingly. But if it's Wednesday night and your client needs something done by the end of the week, you need to take the urgency into account and have it reflected in your price, you can charge more. If the walk requires you to sacrifice other things, maybe it requires you to push a date with a different customers. Perhaps it requires you to pull an all nighter or hire help, maybe it will require you to walk over the weekend, all of these things come at a cost. Now the 3rd element is the complexity is this project relying on your existing experience and expertise or does it send you off to a whole new journey of research and exploration? If so of course that needs to be taken into account as well. The 4th point is whether or not you can replicate or reuse the outputs from this job. It is especially critical when trying to build a business if I'm creating a massive piece of work for a customer but I can use it in some way later on. Maybe it's worth my while is essentially I'll be getting paid to produce work that later on. I can charge other clients for. But if that piece of work is so unique or bound by an NDA nondisclosure agreement and I cannot reuse it or replicate it with other clients. I would want to consider charging a different rate. Now there are a few other considerations that are a bit softer but also necessary to take into account. For example, will I be able to showcase my work as part of my portfolio? Will that customer be able to give you a reference? Are they willing to do so? If you meet seven success metrics. If so, this could be very, very beneficial. Being able to put that big logo on your website will help you acquire future customers. There's also a more direct approach. It is very effective but might not work well in agriculture and there is asking your client directly what is your budget for this job. Is there any flexibility around it. If you get a number you can now start negotiating the difference between what they can pay and what you want to be paid. And I also want to speak about to even softer, more abstract measurements of pricing strategies. This one relates to something much more internal. Do you have a number in mind that you'd like to see for this gig for this month? If so it's perfectly fine. It's even better because it gives you something to work towards and you can use that to offer a more robust service. Let's say you've decided you want to earn $1,000 for this specific project And then the customer calls you and says listen, what I can afford is $500. This is a 50% difference and it's a big one now. No one will blame you if you decide to forfeit the job. But what you can do in order to get into $1,000 is this you can consider pushing the payment date or changing the payment terms to allow for greater flexibility maybe by paying you out of next year's budget will allow them to give you a little bit of extra or you can tie a completely different approach. Something like this. Listen Mr client if you can meet me at $1000 here is what I'm willing to do for you. I'm willing to give you two more rounds of revisions. I am willing to give your team a free lecture. I am even willing to deliver the service quicker, maybe in half the time. So this is how we tackle it. If you have a number in mind, the last strategy will address is very subjective but also very powerful. It consists of your very own mental price range in which the lowest end is called resentment pricing and the higher standards called ludicrous pricing, resentment price is the price that if you agree to you will end up being resentful, angry and frustrated. This will make you regret taking the gig. This is the price that isn't really worth your time and effort and it will make you really hate your job. And this is not why we're starting a business. Unfortunately, you would probably find yourself walking into resentment prices for a few times before you understand it. This is what they are and learn how to avoid them. Now in the opposite end of the spectrum is the ludicrous price. The ludicrous price is the price for which you will take the job on the client terms with no questions asked, even if you really didn't want to. It's usually a farfetched number that could be sometimes deliberately used to push certain clients away so that's pricing and we try to give you some tools to set your prices and account for the most common components of pricing time, urgency, complexity and positioning. Now it's not everything, but it's enough to give you a range. And with that in mind, let's move on to the next lesson.