How do you get better-paying clients for your design, development, writing, or freelance business? I’ve been talking a lot lately about creating a better, more profitable plan for the new year. I believe the last few months of the year is the best time to do this. There are three months in the quarter, so that gives you plenty of time to think things through.
Once December arrives, distractions seem to multiply exponentially. Then, after January 1st, most people start focusing on the things they’d like to change as they move into the new year. Think about it, though. How much better would it be to already know what you’re going change and how you’re going to do it a few months ahead of schedule?
That’s the context that I’d like to frame this subject in. I’m talking about creating and offering a higher quality service that appeals to those who prefer buying premium-type offerings.
Before we dig into it, let me ask you an equally important question?
Is It Costing You More Than It Should?
Energy-wise, how much are you putting into your business on a weekly basis? If we look at it on a daily basis, the question might be – how much is left in your tank at the end of the day?
Are you burned out, strung out, or stressed out? The point here isn’t to tell you whether you’re doing it wrong or right. The point is to ask yourself the questions and come to your own conclusions.
Sometimes you have to ask yourself the hard questions. You have to slow down a little and be in the right frame of mind to do it. If you’re not happy with the return you’re getting on your investment, now is as good a time as any to adjust your approach.
If you’re not happy with your business, clients, or income, why not consider making a change?
What You Should Change & What You Shouldn’t
If you’re currently selling low-cost services, I’ll be the last person to tell you that you should stop selling them. In my experience, three pricing levels (low, medium, and high) can work brilliantly as long as it doesn’t cost you more time than it’s worth to deliver the lower-priced services.
What I’m proposing is the creation of high and mid-level priced services to add to your menu of lower-cost services.
If you’ve never done this before, you might find it challenging. Let me explain why. You’ll probably find yourself thinking, “What can I add to my service to make it work $XXXXX when I’m currently charging $X or $XX? I’m purposely using “$X” instead of specific numbers so you can fill in the blanks with numbers that make sense with your current pricing.
What is Your Service REALLY Worth?
Now, let’s look at the true value of the service or the work you’re performing. Does the work you’re performing add to your client’s bottom line? Take something that’s a bit more abstract to some clients, like design. Does a professional design add to the customer experience? Of course, it does. If a new design gets more people to buy, make an appointment/reservation, etc., what’s that worth?
Some people use what’s called an average order value to crunch the numbers. For example, maybe 5% of their site visitors place an order some kind. If the average order is $100 and 1,000 people visit their site, that amounts to 50 people spending $100. That gives us $5,000.
If your new design enhances the user’s experience and that increases conversions by a measly 3%, that’s still 30 more people spending $100 a month. That’s an increase of $3,000 a month. So basically, if you’re charging hundreds of dollars for something that (at least on paper) is mathematically capable of generating thousands of dollars, you’re probably undervaluing your service – to say the very least.
This is what it means to sell value instead of an hourly rate. If you convert your service into numbers and add that figure to the bottom line, your value will be seen and interpreted in an entirely different light. All you need is your prospect’s average order value to get started.
Once you have a number that represents the average sale, the rest is just playing with increased percentages. That’s what you’re selling. That’s the benefit of paying MORE for your service. The increased profits pay for the service and then some. If it takes them three to six months to recover their investment, it’s still a great deal, isn’t it?
Creating a Higher-Priced Service
Okay, let’s get back to the actual creation part of the service. If you had enough TIME and where getting paid for that time, how much better could your service be? Honestly, think about it. What if you have three to four hours of extra time built into your pricing to make a good process a GREAT one?
Or, what if you had extra time to really analyze their sales process? I’m talking about enough time to do – not just a good job, but a great one?
I remember first hearing the story about the Paul Bond Boot Company almost a decade ago. Paul made custom boots “to last a lifetime” by hand. People paid incredible amounts of money for the boots he made. I believe he only made about 6 pairs per year. Each paid took months to make. If I remember correctly, the process was started by video recording the way a client walked, which was then factored into the boot’s design. You can read a little bit about his story here.
The point is, if you have enough time, you have the capacity to create something that’s truly special.
Now, let’s factor this concept into your existing business structure. With a lower-priced service, you simply can’t afford to invest a lot of time into the delivery of your service. But, if you don’t have a lot of business, you’re probably doing just that because you’re trying to make clients happy and build your reputation.
How do you fix this?
Start with a High-Priced Service and Plan Backwards
Everyone plans and sets up their pricing structure a little bit differently. Some look at the averages in the marketplace and then determine where they want to be on the pricing scale. Most beginners, anxious to get started, price their services competitively. Obviously, they’re looking to get clients sooner rather than later and want to get their name out there.
They put their very best into providing their service even though they realize over time their profit margins are a bit leaner than they’d like them to be. From that place, it can be difficult figuring out how to add more value to an existing service. Especially if you’re already giving it everything you have at the current price point.
It’s easier if you create the higher-priced service first. Then, for the mid-priced and lower-priced version, you scale back from the premium version, removing or adjusting certain aspects or items to create the mid-priced and lower-priced versions.
Does that make sense?
Try this, jot down a list of every possible service item you could offer that would help your client solve their problems. Brainstorm it. Write it all out. Don’t stop to analyze any of the items that come to mind just yet. Put it all down on paper. When you’re finished, if a few more ideas pop into your mind, write those down, too.
Then, next to each item, write how long it would take for you to complete that service at the highest level possible, without cutting any corners. Then, attach a monetary value to the item. Total everything up when you’re finished, and you have your high-end product.
High, Medium and Low-Priced Services
After you have your high-end product worked out on paper, remove items from it to create your mid-range and lower-priced versions. Do you see how that works? You start with the biggest and the best and then work backward.
This also makes creating things like pricing charts much easier for you. You can show an itemized listing of what’s included with the service, so a prospect understands what it is they’re buying.
If you’ve been in sales for any length of time, you’ve discovered this – some people will always buy low. Others will always buy mid-range. And others will always buy the very best of the best.
If you offer all three price-points, you’ll be able to serve all three customer types in your business.
When I was just getting started, I remember sitting around and thinking that money was just as tight with everyone else as it was with me. I priced my services accordingly. Was it wrong? Honestly, my main concern was getting some cash flow coming in. I was willing to make deals, meet new people, make new friends, and grow my new business.
Those initial deals led to a lot of long-term business. So, no, it wasn’t wrong.
Then, I realized it was time to take things to the next level. I needed more money. It was as simple as that. Maybe that’s where you are right now?
A More Profitable Tomorrow
I don’t believe money buys happiness. It does pay the bills, though. I’m guessing your bills aren’t going away anytime soon? If there’s struggle and strain in your life when it comes to money, I hope what I’ve been sharing with you has given you some encouragement?
I’ve said this before and I’ll say it again – you can’t sell what you don’t offer. You must have a higher ticket offer in place, even if you’re skeptical about your ability to sell it.
If you have low-cost services, you don’t have to get rid of them. The idea here is to create three options or three packages (low, medium, and high). If you can’t come up with three options, start out with two. As I’m writing this, I can tell you with almost absolute certainty – if you don’t do this quickly, you probably won’t do it at all.
You may be thinking, “I love this idea, I need to try this out!” The problem is, when something is a little out of our comfort zone, we delay getting started. The next thing you know, it’s months later and you still haven’t done anything.
I like the minimal moving parts approach to business whenever possible. All you need is one sales system that works. The right system can change everything. I’m trying to help you build a system that will be a great fit for your business.
Get Started Now
Grab a piece of paper or create a new file and get started with this, right now. Save the file and call it something like – “My New Business Pricing Plan.”
Next, type out a heading and call it, Brainstorming Ideas for Premium-Priced Service.
Under that heading, write down or type out (one line per idea) anything and everything you can think of that can be included in your ULTIMATE service offering. For now, just add a few ideas as quickly as you can under your heading. You can come back to it later.
Now, save the file.
That’s it. Again, you can come back to it later. The point is, you’ve already tackled the hardest thing when it comes to doing something new. You got started!
Later today, tonight, or tomorrow – you can come back and fill in more blanks. You can add the time it takes to complete each item next, and then add your hourly rate next to that. I’m talking about completing tasks at a higher level, scrutinizing the details as you go.
Note: You’re the only person who will see these numbers. This is your planning process.
Here’s an example below of some extra items I might add to a premium priced web development project –
Competitor Analysis – 3 hours ($$$/hr)
Keyword research for client’s niche – 3 hours ($$$/hr)
Pulling Ideas from Examples in Your Own Niche
There are plenty of examples online in your own niche that you can pull ideas from or get inspiration from. In other words, if you catch yourself staring at a blank page, snap out of it and do a little digging. You can combine other services with your existing services and reintroduce them into your marketplace as “packages.” Some people refer to this as productizing your service.
Take a minute and consider where your business is today as compared to where you’d like it to be tomorrow. In this case, I’m defining tomorrow as the upcoming new year. Everything I’ve talked about in this article requires a minimal amount of effort to get started. The more excited you are about change, the easier it will be to gain momentum.
- First, you must identify all the pieces that can potentially fit into your premium package.
- Then, you choose the ones that will make your final cut.
- Determine how long it takes to do a great job with each piece.
- Attach a price or value to each piece.
- Calculate the sum total of all the prices together. That’s your premium service.
You can either eliminate certain pieces to create your mid-priced version of the service. Or, you can cut back on the allotted time by using an automated process or template of some kind. Then, you do the same again to create the cheapest version from there.
In this example, I’m not defining cheap as being crappy, sub-par work. Your basic, lower-cost package just doesn’t have all the bells and whistles that are included with your premium product. Does that make sense?
Conclusion
So, there you have it. Thank you for reading and feel free to share your own thoughts or insights with this topic below.
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