00:00independent Consulting manual Round
00:01Table discussion our topic today is
00:04pricing and money I'm your facilitator
00:06and in just a moment our esteemed
00:08panelists will be introducing themselves
00:09to you I think you're going to find
00:11today's topic extremely interesting
00:12because there's so much depth involved
00:14in pricing your services and dealing
00:16with the financial aspect of Consulting
00:18to paraphrase Yogi Berra Consulting is
00:2090 pricing and the other half is the
00:23delivery each of our panelists has a
00:25wealth of experience and hard-won
00:26lessons to share on this topic so pay
00:28attention to the next 45 minutes it's
00:30going to be solid gold I promise my name
00:32is Kai Davis I'm an Outreach consultant
00:34I help Consultants product creators
00:36coaches and authors grow their Audience
00:38by managing their most valuable
00:40relationships and helping them build new
00:42ones and again I'll be your facilitator
00:44for this panel discussion I'm now going
00:46to ask our panelists to introduce
00:48themselves uh Jonathan
00:50sure thanks Kai my name is Jonathan
00:52Stark from lovely Providence Rhode
00:54Island and I'm a mobile strategy
00:56consultant I help CEOs transition their
00:59business from the sort of Legacy desktop
01:00era to a more modern mobile architecture
01:07I am Julie elster of just tell Julie
01:10and uh just until Julie is a virtual
01:12accounts receivable service geared
01:15towards Freelancers so basically I'm
01:17helping to ensure that your invoices are
01:21excellent thank you uh
01:24my name is from Super spicy media and
01:27I'm a social media consultant that helps
01:29software companies and online product
01:30creators manage their social media and
01:32generate New Leads so they can invest
01:34their time in other aspects of their
01:37thank you and uh Jeremy
01:39hey I'm a software architect
01:41specializing in Ruby and Ember and I
01:44help Ecom and SAS applications make the
01:47transition from monolithic applications
01:49into a microservices architecture
01:53thank you all so much and so uh today is
01:56our today our topic is going to be
01:57pricing and money it's going to be a
01:59Roundtable format so I have a couple
02:00questions I prepared but uh we'll be
02:03going through them one at a time and
02:05just talking about them and seeing what
02:07comes up from them so the first question
02:09I have for the group is how do you price
02:12your services and uh uh
02:14Jeremy if you'd like to kick us off
02:17yeah sure most of my clients I work with
02:22basis where we've just agreed on a
02:24weekly rate uh and then every week we
02:27try to basically squeeze in as much work
02:29as we can fit into the time that I have
02:32allotted to them uh this was after years
02:35of doing hourly billing and tracking
02:38hours and doing a lot of back and forth
02:42you know what's included in this hour or
02:44that hour and I found that a weekly
02:47uh really eases a lot of that and makes
02:49my interactions with clients a lot
02:53excellent and uh Jonathan
02:55sure I used to do hourly billing years
02:58ago and I moved away from that in about
03:002006 uh to a value-based model so I
03:04would pray software development work
03:06based on the outcome through the
03:08business that I was helping and that was
03:11huge for me and I found that over time
03:14it actually started to it started to
03:17affect the kind of services I offered so
03:19I started moving away from
03:21sort of hands type you know hire me from
03:24my hands to code things up to up the
03:27value chain to more strategic Concepts
03:29you know like how to set up the
03:30architecture for the application or how
03:33to choose external teams and manage
03:37external teams to actually deliver the
03:39work and so my my business now is almost
03:42100 device so I still am an expert in
03:46software development and I do that on
03:48the side and for occasionally I'll do a
03:50non-profit promo things or just side
03:54but uh these days it's just you know
03:57people pay me by the months to pick my
04:00excellent and uh Julie how do you price
04:03uh it depends on the type of work I'm
04:07um if I'm doing like one and done AR
04:09collection work it's going to be
04:11commission based so I would take a
04:13percentage of what I'm able to collect
04:15on that invoice if I'm doing
04:18um month-to-months work for somebody I
04:21work on monthly retainer I found is the
04:24uh for me to price up my services but a
04:27lot of my clients I'd say the majority
04:29of my clients are hourly they bill
04:33excellent and uh what's up
04:36so I never did early billing um but I
04:40price currently my um my services based
04:42on my clients needs so I definitely I
04:44always create different packages uh from
04:47what I think my what I know my clients
04:49need uh and I build them by monthly
04:52retainer but I also have one productized
04:54Consulting offering which is super spicy
04:56sessions and that's one-time engagement
04:59thing and you know there's a one-time
05:01prepayment and that's it and it's fixed
05:03price fixed scope so I have kind of two
05:06different uh ways to tackle this
05:09excellent so across the group we can see
05:11that there's a wide range of different
05:13ways that we've chosen to build clients
05:15for our time for the outcomes we're able
05:17to help deliver for the value we're able
05:19to provide uh I think one thing to all
05:22connect on though is no matter which
05:24methodology we're following we all might
05:27run into the situation where a client
05:28objects to the price we put on our work
05:31our time a week uh across a group I'm
05:35curious how have you what strategies
05:37have you developed to help you deal with
05:39clients that object to the price that
05:43uh I can see that it starts way back
05:47before you even are talking to a client
05:49so if you position yourself as a high
05:52consultant and you offer a very high
05:55value uh service sort of a premium thing
05:58then you're automatically going to
06:00attract people who aren't going to be
06:02that price sensitive in the first place
06:03if you do end up getting someone who's
06:05price sensitive there are a bunch of
06:07things you can do to deal with that but
06:10it could be a red flag that they're not
06:11a good fit for you but one thing that
06:13you can do assuming that that's not the
06:15case and that maybe you you can at least
06:17how do you find out if they're a good
06:18fit or not is to have what I call a
06:20valued conversation with them
06:22uh the way it usually goes they'll get
06:24an email somebody say hey we're gonna do
06:25the go-to guide for like what we're
06:27responsible design on mobile or whatever
06:28and we'll set up a phone call and I'll
06:31talk to them and they'll initially start
06:33off by talking about something they want
06:35me to do like oh we want you to rebuild
06:38these three pages you know some very
06:40tactical specific labor that they want
06:44and in my mind that's kind of like a
06:46self-diagnosis they they know they have
06:49some kind of problem and they think that
06:51this doing this thing is going to solve
06:53that problem and as a professional I
06:55think it's my moral obligation to at
06:58least make sure that I agree that the
07:00prescription that they're giving to
07:01themselves is accurate so I'll say okay
07:04that's great you know they finished
07:05brain dumping what they want me to do or
07:07they think they want me to do and I'll
07:09say okay but you know why what's the
07:11outcome of this because it's going to
07:12cost a lot of money to hire me I want to
07:14make sure that you're going to get good
07:16Roi out of this so why is this just a
07:18vanity project for the CEO or is this
07:21actually going to move the needle in
07:23your business and they'll think well
07:25geez that's a good question
07:27um and they either know the goal and
07:30they can sort of articulate that and you
07:32can start talking about the underlying
07:34motivation why do this project now
07:38um how well to do it you know is this a
07:40prototype or is this the laying the
07:43groundwork for the next 10 years of
07:44their business why am I there a guy you
07:47know is there some cheaper option that
07:48they could use that would be just as
07:49good I'd try and talk about hiring me
07:52and by the end of that phone call you as
07:55the as the consultant you'll have a
07:58really good idea if there actually is
08:00any benefit to the customer so you know
08:03if you're asking them to give you you
08:06know ten thousand dollars fifty thousand
08:07dollars a hundred thousand dollars
08:09they're going to want that money back
08:11and then some you know so if you can't
08:14find any possible way for them to do
08:17that then it's probably a bad fit if you
08:19can find a way through this discussion
08:21then they'll kind of have talked
08:23themselves into the value of it and that
08:27the ultimate fee that I'm gonna put on
08:29the proposal I get in the quote here's
08:31the amount that it's going to cost it'll
08:33seem reasonable compared to the outcome
08:35that we've discussed so if we can at
08:37least come to a conceptual agreement
08:40about what the value of the outcome is
08:42then you know it's it sort of
08:46diffuses a lot of the price sensitivity
08:49and positions you as a as an expert so
08:51people aren't going to be your um
08:54competitors will be less likely to you
08:57know have any chance against you
08:59that's wonderful that's a great way of
09:01uh taking an objection and really
09:04defeating that objection uh uh Jeremy
09:07how about yourself when a client objects
09:09to your price what sort of strategies do
09:10you find yourself using
09:13um I often try to dig into exactly you
09:16know the details of the role that
09:17they're looking to for me to fill uh
09:20often if there's a price objection it
09:23turns out that you know they think
09:25they're looking for a senior
09:27developer type of a person and then when
09:31we dig in and start asking you know what
09:34are the problems that you're having and
09:35how much of you know how much ownership
09:37of this project are you looking for
09:40sometimes it turns out that yeah they
09:42really do need senior people and they
09:44just don't have a good idea of what
09:46Market rates look like
09:48um and sometimes we discover Oh no
09:51you're not looking for a senior person
09:52you're looking for a junior developer
09:54that you can parcel out tasks to
09:57that you know is like Jonathan said Just
10:00A Pair of Hands that's going to come in
10:01and do some stuff on the product or on
10:03the project and if that's the case you
10:06know you don't need senior people for
10:07that you need senior people when it's
10:10you know decisions about how are we
10:13going to architect this thing how are we
10:14going to deploy it how are we going to
10:16support it over the next few years
10:19um and you know if if they're not
10:21looking for people to make those kind of
10:22decisions then I'm you know not a good
10:25fit for that project and rightly so they
10:28probably don't want to pay my rates and
10:30so it's often a process of figuring out
10:34kind of like Jonathan said also have
10:36they self-diagnosed a problem and maybe
10:38diagnosed it incorrectly and so they
10:40think that they need things that they
10:42don't actually need and so sometimes
10:44it's just that process of trying to talk
10:48looking for more Junior Talent
10:50excellent so very heavy on the
10:52communication in both cases uh Julie so
10:56you have an interesting mixture of a
10:58commission-based service but you also
10:59provide monthly retainer-based Services
11:02how do you deal with objections on
11:04either side of that Spectrum
11:06so I really don't get too many people
11:08objecting to my rates but I see uh like
11:14my clients ends I do see a lot of that
11:17in dealing with unpaid invoices and I
11:20can tell you like going back to what
11:22Jonathan said as far as value I think a
11:25big part of what I'm seeing is people
11:27are charging these Bargain Basement
11:29rates just to try and attract
11:33clients and they're not getting the
11:35quality clients the people who are going
11:37to pay the rates that they are wanting
11:39so what ends up happening is they're
11:41attracting people who don't have any
11:43money like when you are charging Bargain
11:45Basement rates you're going to attract
11:48Bargain Basement Shoppers who are
11:51looking for a discount because they
11:52don't have any money so while I don't
11:55see that so much in my service I really
11:58don't get too many objections because I
12:00think by the time a lot of my clients
12:01come to me they're just they're looking
12:04to get their invoices paid so they need
12:06the help they're willing to pay me but I
12:09see the issues when talk when I'm
12:10talking to their clients about their
12:13invoices and I would say that's a
12:15majority of the invoices that I see that
12:17go unpaid or the issues that they are
12:20having when I'm talking there are
12:21conflicts about rates it's it really a
12:25lot of it boils down and they don't have
12:26the money these people and I see the
12:29invoices they are not charging the rates
12:30that they should be charging and so they
12:32are attracting these people who don't
12:34have the money to pay the invoices at
12:38so price in a sense on both ends can be
12:41a signal if you're pricing high as
12:42Jonathan pointed out you're going to
12:44attract people who are already budgeting
12:46for world-class world-class Talent
12:48high-end Talent if you're pricing low
12:50you're going to attract people who are
12:52saying I'm looking for a affordable
12:54option with all the costs and
12:56consequences that might imply yeah know
12:58your value know what you're worth I mean
13:01you shouldn't if you're bringing a
13:03certain level to the table you shouldn't
13:04be charging Bargain Basement prices
13:06you're going to be attracting the wrong
13:10and uh how how about yourself
13:14um I just want to say that I agree with
13:17everything that Jonathan said about
13:18positioning that it all starts with
13:20positioning but I've had actually I had
13:22an interesting maybe Insight uh that
13:25I've had multiple occurrences where
13:27prospects came to me saying uh you know
13:30just a price that they've made up uh
13:32because their friend said hey a social
13:35media manager only costs a hundred
13:37dollars a month and they came to me so
13:40when I told them what my price actually
13:42is they were shocked so what I can do
13:45then is just first of all just teach
13:47them about how this works what do you
13:50get for a hundred dollars per month and
13:52just show them the value that I'm going
13:55to create when I charge a little bit
13:57higher but usually you know when
14:00Prospect like prospects like that come
14:02to me you know they usually just go away
14:04I'm not willing to lower my prices just
14:06because of that but you know just I
14:08think that showing them and teaching
14:10them about this you know particular
14:12topic is just maybe a one step in
14:15another direction that we can all make
14:16just to teach our prospects that you
14:19know if you want just the cheapest
14:22Services you're gonna get cheaper
14:24Services which you know basically means
14:27that the results aren't going to be
14:29something that you would like
14:32I I think across the board what I'm what
14:34I hear from everybody is that there's
14:35definitely an aspect of communication
14:37involved here with the prospect to both
14:39educate them and both understand the
14:41problem that they're experiencing and uh
14:44touching on something that moisten just
14:45said I'm wondering how we individually
14:48work on quantifying the value grouping
14:51to the table for clients because as she
14:53just pointed out a client might show it
14:54up with an expectation of I'm going to
14:56be able to buy a pair of hands or buy
14:58the service for X dollars but how do you
15:02quantify the actual value that you're
15:04presenting code isn't just code social
15:07media Services aren't your social media
15:09Services there's more to it
15:11sure sometimes you can you can sometimes
15:14it's easy to quantify you know somebody
15:16comes to me and says hey you know our
15:18analytics are showing that we're getting
15:20like 90 percent uh abandoned shopping
15:26and you know we know how much they're
15:28doing per year in sales and if you just
15:30say well for every 10 that I can bring
15:33that down by updating the site and
15:35making it more mobile friendly they're
15:37going to make ten thousand twenty
15:38thousand dollars more per month uh so so
15:41it's pretty easy to quantify in a lot of
15:46um and you can focus your services on
15:48things that are going to deliver things
15:50that are easy to quantify like that so I
15:52could say that you know I could focus my
15:54business down and say that I optimize
15:56e-commerce shopping sites for mobile and
15:59from then on out I would have an easy
16:01time quantifying the goal I would just
16:03say I want to find the value of the
16:05outcome I would just say we're giving
16:08access to your analytics let me know
16:09what you're doing in sales let me know
16:10what the bounce rate is I'll take a look
16:12at your site and let you know if I think
16:13I can have an effect on it and you know
16:16here's here's what I would do here's
16:18what the next steps are so you can set
16:19yourself up to make it really easy to
16:21have a quantifiable outcome but to your
16:25point A lot of times it's really hard to
16:27quantify in fact impossible it's almost
16:31um other than a really bottom line
16:33service like that it's almost impossible
16:35for the developer in my case to quantify
16:38the value to the customer because values
16:42so really the only person that can give
16:45you a sense of the value when it's
16:47anything less than dollars you know
16:49something really specific like that
16:50something that they have to do so it's
16:54you know if it's something like
16:56we are working around the clock Morella
16:59is horrible we need to we need some
17:02Automated Business processes uh to
17:04correct that or we're doing something
17:07like our outreaches or our uh our CRM is
17:10terrible we're doing making all kinds of
17:13Errors we're emailing people that we you
17:15know sending Outreach emails to people
17:17who we're already working with it's just
17:20embarrassing so things like that are
17:22really hard to quantify to put a put a
17:24number against but the client will
17:28how much it's worth to them in the sense
17:31that if you give them a number
17:32they can react to that number as being
17:35either too high too low or just right
17:37and if you said to them how much would
17:39it be worth to you to solve this CRM
17:42problem that you have they probably
17:44wouldn't be able to go I I don't know I
17:46don't really know it would be hard for
17:48them to quantify but if you said
17:49if you know if you go through the cop
17:51talk with them and you move them past
17:53the task that they wanted you to do and
17:56you talk about this term that they're
17:58creating or all these problems and how
18:00much stress it's causing them and you
18:02get it the real root goal which is that
18:05they want to relieve this stress or they
18:07want to make their reputation better
18:09they want to treat their customers
18:12and you talk about that it's on their
18:14mind when you do put a number in front
18:17of them they'll react to it in a way
18:19that like I said it's either the
18:21president be high medium or low so if
18:24you did a good job and you got a good
18:25sense of this magnitude of the problem
18:28and let's say let's say the term one
18:31let's say it's a big customer and they
18:33have big customers and something like
18:36they're probably losing one customer a
18:38year One customer per year uh that they
18:41screwed up and if you imagine that those
18:45deals are worth 100 Grand a pop and
18:48their Enterprise deals and they're
18:49really hard to get real long sales cycle
18:51you know for sure that you'd be saving
18:54them if you save them one customer it'd
18:57be you know in the hundreds of thousands
18:58of dollars so then you can say and then
19:00you think about well all right here's
19:02here's what it's going to take me to do
19:04this it might take me a month to look at
19:05this so if I price myself at say
19:09ten thousand dollars or twenty thousand
19:11dollars for the month
19:13they're they're gonna be if they're
19:15thinking about the right thing which is
19:17the whole churn problem and maybe
19:18they're losing customers over this
19:19twenty thousand dollars is going to look
19:21like a joke compared to potentially
19:23losing a major customer so it's all
19:25about having that first conversation
19:27understanding what the goals are getting
19:29a back of the envelope calculation for
19:31what kind of numbers you're talking
19:32about and then coming up with a number
19:34that's gonna be good money for you
19:37based on your level of effort and is
19:39like a tenth of what their possible
19:42outcome is going to be so once you've
19:45had that value conversation there's a
19:46huge range a huge margin you can be off
19:49by tens of thousands of dollars and
19:50still have the client rush to send you a
19:52check so I don't know if it answers the
19:55question but you know I guess the answer
19:57is you don't have to quantify the value
19:58you have to you have to
20:01sort of get the client to be thinking
20:04about what it's worth to them and then
20:06put a number in front of them that they
20:07can react to with a yes or no I I'm
20:10reminded of the old uh uh I don't know
20:12whether to call it an analogy or a joke
20:13that the best way to make a decision
20:15that you're stuck on is to say well I'll
20:16flip a coin heads right away bi details
20:18and as soon as you flip the coin and see
20:19that it comes up heads and you're like
20:20oh no I don't want to do that it's only
20:22been able to make that decision
20:23similarly when you present that client
20:25with like well okay the value the
20:27potential outcome is this the price is
20:29this they suddenly where before if you
20:31said how much you're willing to spend on
20:32this and they're like uh I don't know
20:34when you say okay it'll be ten thousand
20:35dollars now they're able to say oh gosh
20:37that's too much or oh go it's it's only
20:39that much it gives them that context
20:42Jeremy how about yourself when it comes
20:44to quantifying the value that you could
20:49um a lot of times it's uh it comes down
20:52to calculations about how much time can
20:55we save their staff Engineers or you
21:00can we reduce hosting costs by doing
21:03things more efficiently uh that kind of
21:05thing like when people are have a big
21:08huge monolithic application uh
21:10development feedback loops kind of tend
21:13to slow down and so things that you know
21:16seem like a simple easy fix can end up
21:19taking a good fraction of an hour just
21:21because getting the application
21:24fired up and running can be slow because
21:26there's so much of it there and so you
21:30want to look for things like okay can we
21:33do some things by splitting this up that
21:35is going to you know cut the time to
21:38launch this application in half say and
21:41then you know that means that for every
21:43hour that you've got an engineer working
21:44on it we're saving that that engineer 10
21:48or 15 minutes which by the time they're
21:51working on this thing for a full day
21:52means we've given them an extra hour or
21:58you take a number like that multiply it
22:00by what they're paying their Engineers
22:02by how many Engineers they have and then
22:04we've got a pretty good back of the
22:06envelope calculation on you know how
22:09much additional engineering time can we
22:14making some of this stuff more efficient
22:17so in a sense anchoring it to the
22:19positive upside of the engagement
22:23that's great Julie how about yourself in
22:26uh I think I this question is probably a
22:29little bit easier for me because I'm
22:30working with money so the value of my
22:34services is I mean it's right there on
22:36paper if you have an unpaid invoice like
22:38the value of what I'm doing is clear
22:42um so for me it's a little bit easier if
22:45I'm doing monthly retainer work I think
22:50um you know not only how much time am I
22:52saving You by doing this but if it's if
22:56you're a freelancer and it's just you my
22:59services are something that's going to
23:01help your business to look more
23:03professional you know you should be the
23:04talent you should be focusing on that
23:07if you can't afford an office manager to
23:10have a third party be able to come in
23:11and make these phone calls and handle
23:13invoices and money for you I think just
23:16it brings your business to the next
23:17level so aside from being able to just
23:20very easily be like well here's x amount
23:23of dollars that I'm going to be bringing
23:25in I can also tell you here's time that
23:28I'm going to be saving you and here's
23:31how you're going to be looking more
23:32professional to your clients so for me
23:36easier question for me I think that's
23:38wonderful I really like it in moitza
23:42so I have a similar approach that Jeremy
23:45has because social media is very hard to
23:47quantify especially because my clients
23:51um each you know client of mine has
23:54different goals each social media is so
23:58um I actually again I just uh tell I
24:01just try to quantify in a way that how
24:03much time I can save you because the
24:06biggest expensive problems my clients
24:08have is they know they need to be on
24:11social media they know that the social
24:14media can generate leads can generate
24:16new sales if you try hard enough but
24:18they just don't have the time to try
24:21hard enough so I actually try to maybe
24:24put that forward a little bit more just
24:26how much time I am going to save you
24:29with you know taking your social media
24:30and just working on it myself so you
24:34don't need to do that yourself anymore
24:37that's great and it's a similar approach
24:40for my business where what I'm selling
24:42is less quantitative so I frame it as
24:46the time savings to a client where by
24:49investing their their money in my
24:51services uh the outcome for them is hey
24:54you have more time to focus on growing
24:55your business running the parts of your
24:57business you care about instead of you
24:59know mucking around with this or that or
25:01the other thing uh uh one thing we
25:04touched on earlier was the difference
25:06between Consultants who price low and
25:09the type of clients that attracts and
25:10Consultants who price at the higher end
25:12of the spectrum and the type of clients
25:14how how have you all gone about the
25:17process of raising your prices to
25:20attract those more valuable or higher
25:27that's a tricky one I think I don't know
25:31who said it but there's a quote that uh
25:33pricing your prices are the number one
25:36most powerful thing that you can say
25:38about the quality of your service but
25:40you can't just randomly pick some high
25:42number unless you have some credible
25:44claim as to why you are way more
25:46expensive than everybody else so or even
25:49why why you you know maybe don't do
25:52hourly and you do fixed project bids or
25:54you do retainer type big Scope Services
25:57or prototype services so you have to
26:01I mean basically it all boils down to
26:03trust so if you when somebody is going
26:05to make a purchase with you or anyone
26:07like us any kind of professional service
26:09provider the number one thing if you
26:11want to boil it all down it's there
26:13there's a risk there's a danger that
26:16they fear that they're going to waste
26:17their money so the only the best way I
26:21think for people like us and
26:23Professional Services and knowledge work
26:24in general is to just do everything you
26:28can to make them trust that you're going
26:30to deliver the value so
26:34um you know that boils down to Content
26:36marketing it boils down to writing books
26:38it just boils down basically to
26:40delivering value all the time at every
26:44um in public you know speaking
26:46engagements and writing books and
26:48blogging and answering questions on the
26:51line I mean it's it's not there's no I
26:54wish you know be cool if I could just
26:55say oh there's just this magic thing you
26:56can do and all of a sudden people trust
26:59um give oils down to trust and the more
27:00people trust you the more you can charge
27:02basically so I guess that's the answer
27:05and so that's been your experience as
27:07you've leveled up as a consultant and a
27:10practitioner the more you've been in
27:11public the higher you've been able to
27:13yes justify absolutely So speaking I
27:16mean I've literally walked off stage at
27:18conference I've spoken at me over 100
27:20conferences and it's fabulous because
27:23people get a sense of your whole Persona
27:25they get a sense of what it would be
27:27like to work with you and if you're if
27:29you deliver like a passionate message
27:31from the stage that clicks with with its
27:34it's going to click with your ideal
27:36customers if any of them are in the
27:37audience and you can see immediately if
27:39it happens because after you get on
27:41stage they come right up to you and I
27:43I've gotten contracts right off the
27:45stage on many occasions big six-figure
27:47contracts just walking up the stage
27:48because people are immediately like
27:50this is the guy we're not even going to
27:52look for someone else this is the guy I
27:54need for this weird thing that I'm here
27:56to learn about and they just trust you
27:58like crazy it's like this um it's not
28:01crazy but it's just it's powerful to be
28:04in person and be in that sort of
28:05authority position of being up on stage
28:07and and people just feeling it so that's
28:11that's great writing a book is amazing
28:13too if you if you're the person who
28:15wrote the book and the thing you're
28:16automatically perceived as an expert in
28:18the area so that is a huge uh trust
28:23if I can just jump in a little bit
28:25because I have a similar Point uh so
28:27first of all I agree that communicating
28:29you know why you price higher than maybe
28:31uh your in my case other social media
28:34consultants is very very important like
28:36in my case you know I can achieve great
28:38results in um in a shorter period period
28:41of time than other social media
28:43consultants so I try to put forward that
28:45but I think what Jonathan touched a
28:47little bit here is like he said persona
28:49or like I call it personal Brands so I
28:52think that communicating
28:55um why you price higher and maybe
28:58developing a strong personal brand like
29:00Jonathan said where you walk off the
29:02stage or how you present yourself on
29:04Twitter for instance I think in my case
29:07just my personal brand had so much to do
29:10with charging my prices a little bit
29:12higher and just you know increasing it
29:16um because you know people knew me and
29:18people wanted to work with me not with
29:20any other social media consultant there
29:22is and because they wanted to work just
29:24with me I was able to raise my prices
29:26and not you know shock the prospects or
29:30anything like that so I think Jonathan
29:32touched on that a little bit so I just
29:34wanted to just throw a little comment in
29:39that's excellent yeah I think that's a
29:41really valuable Point uh uh Julie I'm
29:45how about yourself or your business or
29:47your clients that you work with how do
29:49you Advocate they attract those higher
29:52um well I think at least what's worked
29:55for me for attracting clients and being
29:58able to charge the rates that I want is
30:00I like to to Jonathan's Point becoming
30:04making yourself an expert so I try to
30:08educate clients and I find that that
30:11really has worked wonders so like I have
30:15an email course and I write articles
30:17about you know what are the best ways to
30:20avoid late payments and what are the
30:21best ways to attract you know certain
30:24clients that are going to pay you the
30:26rates that you want and I'm very
30:28transparent about what I do and I think
30:30that having that level of transparency
30:32makes you trustworthy and I think that
30:35it allows you to be able to charge the
30:38rates that you want to charge and it
30:42attracts clients who are going to pay
30:44those rates and pay those invoices on
30:46time so really that's what's worked for
30:48me and so that's what I try to convey to
30:52my clients who are having issues getting
30:55paid when they ask me how do we avoid
30:56this in the future that's really the
30:59point that I try to drive home with them
31:10accidentally muted myself I think that's
31:13really really important uh and that's a
31:15topic that's come up multiple times
31:16throughout these roundtables the
31:18importance of educating your clients on
31:21what exactly it is you do what the value
31:23of it is that you do and that that both
31:26inspires that trust leads to that
31:28connection to your personal brand and
31:30you know it helps you charge more Jeremy
31:33people people are like well how do you
31:36get clients if you're telling them how
31:38to do it yourself how do you get clients
31:39and I find that that absolutely never
31:41deters anybody from hiring me and really
31:44if anything when they do hire me it
31:46makes my job that much easier because I
31:50already gone through all of these steps
31:52so when it gets to a point where my
31:53services are needed I know that they're
31:56on top of their game and that my job's
31:58going to be that much easier it is just
32:00it is never deter to anybody from hiring
32:02me so I think education is key I also
32:06think education is valuable because it's
32:08it's uh let's pick on the metaphor if
32:10you don't know how you don't want to
32:11know how the sausage is made well if you
32:13teach your clients how your metaphorical
32:14sausage is made they're going to say
32:16this is incredibly difficult there are
32:17so many steps involved here everybody's
32:20nodding I don't want to do this myself
32:22and suddenly when you come in and say
32:23well I've been doing this for 10 years
32:24I've been doing this for five years even
32:25I've just been doing this for six months
32:27they're like oh thank God a professional
32:29I want to just throw this money at you
32:32so I don't have to do this myself uh
32:34Jeremy I'd love to hear your experience
32:37when it comes to attracting higher
32:39budget clients or clients who have more
32:41money to invest in your expertise
32:43uh so one of the biggest steps for me
32:46was just realizing that I needed to go
32:48look for a different type of client than
32:51I had been looking for previously
32:53um like prior to being an independent
32:55consultant I ran an agency with a
32:57business partner and we were always
33:00going after like local small and medium
33:04um often it would be a business's first
33:07foray into having a web app of any sort
33:10or really even you know just a minimal
33:13website uh and so it was uh you know by
33:18and large the the bottom Barrel clients
33:21that Julie mentioned earlier with people
33:22that were kind of new to the game didn't
33:26what was going on didn't know what to
33:28expect didn't know what to expect to pay
33:30uh and so it felt like there was just a
33:35try to get the rates that we wanted to
33:37be able to charge from people that
33:39weren't prepared to pay them
33:41um and we also found that many of those
33:44Bargain Basement Shoppers were also some
33:46of the toughest clients to please
33:48because they it seemed like many of them
33:51had the mindset that the whole world is
33:55out to get them and so if something
33:57didn't go right on the engagement it's
33:59obviously because we were trying to
34:00screw them not just because things
34:02happen and you know they were not often
34:05not very uh receptive to oh I'm sorry we
34:09screwed that up we're going to fix it
34:10it's not going to be a big deal
34:13um and since you know moving and not
34:16looking for those kind of clients
34:17anymore now I look for established
34:20businesses that have you know a large
34:22technology project already going that is
34:25really starting to move so fast under
34:27its own momentum that they can't keep up
34:32just making the change of who I look for
34:35has almost completely erased any
34:38pushback on uh price objections because
34:42I'm just operating at a higher level in
34:45the game and I'm dealing now instead of
34:48with you know the owner of the business
34:50who is getting into doing their first
34:52web app I'm often talking to a CTO who
34:57you know understands the technology that
34:59they have at play and understands the
35:02value of making that operate more
35:04efficiently within their organization
35:07um so it's for me mainly just been
35:10start looking for a different type of
35:14that makes a lot of sense and it really
35:16Echoes my personal experiences I've
35:18grown my business I think back to three
35:19or four years ago when I had my first
35:21clients and I was charging I mean if I
35:23want to be honest 25 to 30 an hour and I
35:26just had the worst clients possible
35:28where everything was either my fault or
35:30they had a ton of changes or they wanted
35:32to micromanage it but as I've increased
35:34my rate by over eight times the clients
35:37I work with now are much more likely to
35:40view me as a trusted advisor on the
35:42project somebody who they're bringing in
35:43because I have that knowledge and
35:45expertise and the only way I've been
35:47able to get there is through the
35:48strategies we've covered educating
35:50people presenting to people taking part
35:52in different discussions making my
35:54authority known so part of it is people
35:56now come to me and say I've heard your
35:58name all over the I've had calls with
35:59prospects who say I've heard your name
36:01all over I I keep hearing you on
36:02podcasts I really want to work with you
36:04and as soon as that happens like it's
36:06almost like you have them on the hook
36:08they're invested in working with you so
36:10when you quote that number they're like
36:12he's the expert she's the expert heard I
36:15why not work with them
36:19so so flipping it around we've talked a
36:21bit about how to attract those higher
36:23value clients but there always is that
36:24risk of clients not paying and I'm
36:27wondering if uh the personal experience
36:29each of you have where a project might
36:31have been completed successfully but the
36:34final bit of money didn't arrive and how
36:36you overcame that problem and from
36:38Julie's experience working in AR how she
36:40Advocates consultants in Freelancers
36:42overcome that in their business
36:49should I start since this is what I do
36:51yeah Julie please tell teach us
36:55um well uh I I personally have I don't
36:59think I've ever had a client not pay my
37:01invoice and I think that goes back to
37:05um the value that you're bringing and so
37:08it's attracting the certain kinds of
37:09clients so I think there's more to it
37:11than just like well what do you do when
37:12a client doesn't pay because I do this
37:15every day and I can tell you there's no
37:17like simple answer every situation is
37:20different as to why clients don't pay
37:22invoices so I think you need to back up
37:24and go back to step one and kind of you
37:28know what we talked about a little
37:31um when you're looking for clients that
37:33you want to work with you really should
37:35be qualifying clients you should be
37:36asking questions you should be charging
37:38the rates that reflect the value that
37:40you're bringing you're going to the then
37:43attract a certain kind of client and
37:45really if you're qualifying if you're
37:46getting everything out in the open up
37:49front day one get it in writing you know
37:52who you're going to be working with the
37:53expectations are clear on both ends for
37:56you and for them and then when it comes
37:58down to that invoice they're going to
38:01want to pay that invoice because
38:03everything's been clear the
38:04communication has been there the
38:06expectations have been set up and you're
38:09bringing a certain level of value and
38:12they're going to see the value and
38:14they're going to want to pay that
38:15invoice because you're going to be
38:16someone that they're going to want to
38:18continue to work with so I think it's
38:20it's a lot more than just like well what
38:22do we do when they don't pay
38:24um I mean I guess the simple answer is
38:27get on the phone that's one thing that I
38:30see when people hire me to call about
38:32invoices past you invoices nine times
38:36out of ten they haven't called they
38:39sometimes people obviously need contact
38:41information if I'm going to be doing
38:42accounts receivable people won't even
38:44have phone numbers for their clients so
38:47it's like you've never once picked up
38:49the phone and spoken to this person
38:52so I think rule number one when you are
38:55in that situation is to get on the phone
38:59um it's gonna be much harder to ignore
39:01somebody on the phone than it is via
39:04email and I can tell you calling people
39:06every day about past due invoices I have
39:09never once been hung up on never not one
39:12time so picking up the phone is key
39:16um communication is key but I think
39:19ultimately it goes way beyond that it
39:22needs to be from day one qualifying
39:25clients communication with clients from
39:27the beginning setting up expectations
39:31um knowing your value and charging rates
39:33based on that I think really is the
39:36foundation of making sure that your
39:38invoices are getting paid on time but if
39:41you're in that situation because it
39:42happens pick up the phone like for the
39:44love of God get their phone number and
39:46pick up the phone nobody ever uses the
39:48telephone anymore but you'd be amazed at
39:51the results that you can get just by
39:53picking up the phone so okay rant over
39:58I actually sidestepped the whole thing
40:00by asking for 100 payment up front so
40:03okay that's even better yes that but
40:05that goes in I think that goes back to
40:07like qualifying your clients and setting
40:09up expectations that should be in your
40:13like upfront conversations with them and
40:16if they have a problem with that it's
40:18like bye-bye so like that's all part of
40:21that conversation in the beginning but
40:25yeah I mean one of the benefits of doing
40:27a software project that's fixed bit
40:30instead of hourly is that you know what
40:32the price is going to be so you can say
40:34all right you know here's the here's the
40:37quote uh here's how you can make payment
40:39and you know let's get it on the
40:42and you'd be surprised I've been
40:45surprised you know I get probably 80 of
40:48people who just don't even blink and
40:49they just sent the check sent
40:52some people will say oh well can we do
40:5550 up front fifty percent when you're
40:57done and I say well you know software
41:00project you never really know when it's
41:02done we'll know when it's delivered but
41:03there still might be bugs in Fringe
41:05cases three months later so let's just
41:08do uh half up front and then happen 45
41:11days or on whatever other date arbitrary
41:13date you want to pick but uh let's not
41:15tie it to the end of the project because
41:17if you you know if you sign off on a
41:20project and then there's Buds and I'm
41:21gonna charge you for the box if we don't
41:23do that then I'll just fix it
41:26that's a wonderful strategy Jeremy how
41:28about yourself yeah doing weekly rates I
41:31now get paid up front you know two weeks
41:33at a time and I've had very few people
41:35push back on that uh when they do uh
41:38it's usually a pretty simple
41:39conversation where I just say look it
41:42it's going to make the project go better
41:44if we do it this way because I'm not
41:46going to be worried that I'm going to
41:47get paid I'm not going to be taking time
41:49out of my week to ask you hey did you
41:53you know everything is just going to run
41:56smoother from top to bottom if that's
41:59removed as a consideration up front and
42:01then we can focus 100 on solving the
42:12yeah just like Jonathan said 100 uh
42:16prepayment uh get paid up front but
42:19before I did that uh let's just say that
42:22I can be very intimidating when you
42:24don't pay me uh and I can make you feel
42:27very very guilty that's it
42:30yeah about a year and a half ago I
42:32switched my entire Consulting practice
42:34over to productized Consulting projects
42:36where I charge flat rates for fixed
42:38scope you know what you're buying it
42:41says on the tin it's like a Campbell
42:42Soup can you're you know what you're
42:43going to get inside of there prior to
42:45that I was just charging hourly and I
42:47was invoicing monthly after the fact and
42:50it was a big challenge for me because
42:52often I'd have clients who they'd
42:54received the invoice and they're like it
42:56takes you know a week or two for our
42:58department to pay and I'm like fine and
43:00then a week later I get well we have a
43:01couple questions about this line item
43:02can you explain it better and I'm like
43:04well this is the work I did it's a
43:05little hard to remember because we're
43:06now six weeks out from when I did it and
43:10a constant ongoing I I want to use the
43:12word battle to get paid when I flipped
43:15over to requiring payment up front and
43:18making it very explicit as everybody
43:19here has said it's easier for the client
43:22to know okay this is how much I'm going
43:23to pay I'm going to hand them the money
43:25and then I'm going to get to the service
43:27like it's rare I think that you'd I I'm
43:30probably going to mangle this but it's
43:32rare I think that you take your car to
43:33the mechanic and say like this is great
43:35I need you to fix my carburetor I'm
43:36going to pay you in 90 days is that cool
43:38they're going to expect payment up front
43:40for the service it should be the same in
43:42the Consulting industry
43:46um another question I have for the group
43:48is for existing services that you have
43:52what strategies have you used or do you
43:55recommend to raise prices so ideally
43:58you're able to take on less clients if
44:00you already have a service out there how
44:01do you ladder up or level up what you're
44:05yeah I mean that's a great thing about
44:06productized services that are relatively
44:08fixed scope is is once you sell out of
44:10them you just your price is too low so
44:13you just raise it I mean it's it's
44:15fabulous it's one of the you know it's
44:20it's such a different mindset when
44:23you're you know I work with software
44:25developers and they're very used to the
44:27time for money thing and it's really
44:29hard for a lot of them to get their
44:30heads around some other way and one but
44:34once you do and you it it makes hourly
44:38weather hour just looks so weird you
44:40know it's it it the the bizarre
44:43arbitrariness of it becomes self-evident
44:45and you know you can have these fixed
44:48bid products you feel like a website
44:49tear down right and just say look you
44:52know no matter how big the client is
44:53this is only going to take me x amount
44:55of days pretty much and I can just say
44:59this is two thousand dollars and I can
45:01put a price for it on my site and I can
45:03have a buy now button and just be
45:05totally automated and then I get the
45:06phone calls automatically set up and
45:08they paid and we call and do the thing
45:11and it's so easy and if you can only do
45:13say you know 10 of those a year then and
45:17you're sold out or 10 of them at a time
45:19let's say you're sold out then your
45:20price is too low so raise it you know
45:23it's like some people I I I've heard
45:25some people like every time they make a
45:27sale of a product I service they raise
45:28the price every single time which I
45:30think is a reasonable approach
45:33how about other people in the group
45:40I would just agree with Jonathan here um
45:42and I don't know which one of you was it
45:45Jonathan or was it yukai when we were
45:48um you know my book and it goes for all
45:50actually product size Consulting
45:52offerings but what we were talking about
45:54pricing someone said that
45:57as far as there are not like hordes of
46:00people telling you this is too much keep
46:02raising the price and that's a that's
46:05that's my take on it
46:06yeah I think it's valuable to keep in
46:10there's a fear I mean I've experienced
46:13this fear personally of raising a price
46:15on a service or a product that I sell
46:16but it's always an internal fear it's
46:18that the Buddhist concept of monkey mind
46:20it's like 70 year old voice in your head
46:21that tells you ah it's gonna cost too
46:23much you're going to lose all your
46:24clients your business is going to catch
46:25on fire when it's your brain lying to
46:27you because your brain might gravitate
46:29towards being more afraid than not and
46:31the truth is the biggest signal that
46:33you're charging too much is clients
46:35saying oh you're charging too much and
46:37to jump back into our conversation you
46:39might experience that objection and you
46:41could overcome that objection by
46:42focusing on oh well here's the value
46:44this solution presents to you this is
46:46the value of an engagement to me this is
46:47how many hours we're going to save or
46:49how many hundreds of thousands of
46:50dollars you'll save in your business and
46:52you might still be charging too much for
46:54that value you might have something on
46:56the table where you're like oh we're
46:56going to save you a hundred thousand
46:58dollars a year I'm charging you a
46:59million dollars for this the client
47:01might balk at that unless they have like
47:03a 50-year game plan but until you start
47:06getting that pushback for you know your
47:08weekly rate or your fixed rate or the
47:11rate of the book you're selling there's
47:13always an opportunity to charge more
47:15it's that that uh concept of you know
47:17consumer surplus and economics if you're
47:19under charging the consumer is
47:21benefiting if you raise the price the
47:23consumer is still winning they just
47:25aren't getting as much of a surplus as
47:29we're almost up on time here I'm just
47:31wondering if anybody has any last
47:32thoughts I'd like to contribute to uh
47:34the overall concept of pricing and money
47:38I was just gonna say one thing that has
47:39helped me have confidence to kind of
47:42raise my prices over time is having a
47:45decent amount of savings to fall back on
47:46so that if people are saying no I don't
47:49feel like oh I have to get this one
47:52client and then very closely relate to
47:54that it's also having just a general
47:56source of leads so that I am talking to
47:59more than one Prospect at a time so that
48:01I don't fall into that trap of thinking
48:04I have to land this one this is the only
48:06client in the world uh you know it's
48:10just keeping in mind the worst that they
48:12can do is say no and move on and
48:15then you have more prospects
48:19very valuable advice and just following
48:21up on that I think you should never
48:23lower your prices just because you know
48:25there's like one client saying you
48:27charge too much or something like that
48:29but my advice would be don't be afraid
48:32uh to price a little bit higher if the
48:34value is there uh because you'll attract
48:37better clients and not only that you'll
48:39be happier happier yourself which is you
48:41know what's what's all about in
48:46and I think one of the one of the most
48:48valuable points that everybody here
48:49touched on is the idea of getting paid
48:52in advance I mean the worst thing that
48:53could happen is you say to your client
48:55or Prospect hey by the way I charge in
48:58advance be it weekly be it daily be it
49:00whatever and they say no and you
49:02negotiate down from there if you enter
49:04into the conversation from saying oh no
49:07it's gonna you know I invoice you 30
49:08days out and then you can pay later well
49:09you're setting yourself up to get paid
49:1230 60 90 days from the time you do work
49:14if you instead just say as a matter of
49:16my business I charge in advance this is
49:19how that looks you could always
49:20negotiate down to something to
49:22accommodate the client but you're
49:24starting from a much stronger position
49:28well thank you all for joining me and uh
49:31uh I'm very very happy that our
49:33panelists were able to help give you
49:34dear dear uh video Watcher some insights
49:37into the topic of pricing and money uh
49:39to our listeners however you found this
49:41video be it from purchasing the book or
49:43from a friend uh you could find out more
49:45about it the other Roundtable interviews
49:47and the book The Independent Consulting
49:51independentconsultingmanual.com and I
49:53just want to take a moment Dan thank all
49:54of our panelists once again thank you so
49:57thank you thank you have a wonderful day