Pricing Your Services

The other day, a designer friend and I were chatting over coffee.

“I have no idea what I should be saying when I meet with a new potential client.”

She’d read my case study that laid out exactly how I closed a recent client, but was a bit unsure about how she could translate my success into something she could emulate in her web design business.

With her permission, I’d like to do my best to recreate our discussion. If you’ve ever been in the dark about how you should approach talking with a new client for the first time, I think you’ll really get a lot out of what’s below.

Enjoy!

In my last post, I shared with you how I question my new clients prior to hosting a Roadmapping engagement.

Today, I’m going to continue from where I left off and share with you an in-depth case study of a recent Roadmapping engagement of mine, including all the financials, proposal snippets, and more that I’m legally able to share without violating my non-disclosure agreement.

Why am I sharing all of this?

I get a lot of email from readers who understand the concepts behind Roadmapping, but aren’t exactly sure how to sell and host Roadmapping engagements with their clients.

And while I sell a premium, in-depth course on Roadmapping, I think everyone should be Roadmapping — so I’m not charging anything for this article. Plus, I know that if you really want to take the leap to going all-in on Roadmapping, you’ll buy 🙂

I also know most people learn best by example, so I’m hoping that this in-depth case study can help you get an idea of how to apply this practice to your own business.

A few years ago, I was prepping to release my most ambitious project to date: Double Your Freelancing Clients.

As a self-made entrepreneur, I was used to doing most things on my own. I code my own site, write my own content, do most of my own designs, and more. (Majoring in graphic design, then switching to computer science, and, finally, the Classics has really paid off.)

But video was something I knew little about.

And like with most things I know little about, I immediately dove in and read up and watched everything I could. I learned about Adobe Premiere, Final Cut Pro, cameras, lenses, and more.

Fortunately, I quickly realized the mistake I was making.

I tell people all the time to delegate out work they either don’t have the time to do, aren’t uniquely qualified to do, or just don’t know. “Spend a lot of time researching and experimenting” isn’t a viable strategy at this point in my business.

So I started reaching out to local videographers.

I met with people, most of whom did freelance filming and editing outside of their day job. Meetings took place at coffee shops, where I led the discussion and the freelancer I was speaking with would ask few questions, nod often, and never once really asked my why I cared about filming five hours of video.

The local who I thought had the best chance of getting this done quoted me $18 an hour, and figured the total budget would be around $1,500.

I thought he was joking.

“How the hell do you know how ‘successful’ a project is when you’re creating ads for global tire companies?”

I remember wrestling with this question after seeing the meteoric rise of a local interactive agency that’s done work for Google, HBO, FedEx, Gillette, and tire manufacturers like BFGoodrich.

At around the time when I was brooding over this question, I was focused on growing my own small consultancy a few blocks down the street. And while both of our companies employed designers and developers and worked for clients, the similarities ended there.

My company focused on small businesses and startups that had solid business plans in place and needed someone to help them amplify their profits. We’d often come in to rewrite and reimplement legacy internal software that was creating a bottleneck internally. Or we’d help kick off new web and mobile apps with the intent that they’d generate more leads, more sales, and more of whatever financially-motivated thing our client needed us to do.

Grow, on the other hand, made really impressive interactive advertisements. If you remember the age of full-page Flash animations, this was how they got their start. They’d create beautiful and immersive experiences for brands that were a lot of fun to play around with and — presumably — ultimately profitable for their clients.

But I just couldn’t figure it out.

Here I was Socratically questioning my clients and trying my best to gauge the additional profit that our projects would bring to our clients… and down the street, a much more successful, much bigger agency was selling projects that were impossible to quantify the value of.

How many new tires will be sold because people see an ad featuring Olympic gold medal winner Shaun White drifting around a track in a race car? Impossible to tell.

Similarly, do you remember those ads that they’d play before movies that featured animated polar bears drinking Coca-Cola?

Do you think anyone has any idea how many cans of coke sold as a direct result of those ads?

Of course not.

And in the mind of this metrics-obsessed engineer-turned-consultant, that drives me crazy.

And I don’t seem to be the only one.

Every time I give a talk on or teach somebody about value-based pricing, I get asked: How to do you value projects that don’t have an obvious financial ROI?

So you’re sold on value-based pricing, and now you want to start commanding a higher price point by raising your freelancing rate. Awesome!

…But how do you broach the topic with your existing clients? How do you raise your rates with your existing clients?

This is one of the most frequently asked questions I hear whenever I give a presentation or conference talk on charging more as a freelancer. Once somebody understands how to sell a client on the value that they’re delivering (and the resulting price increase that value justifies), it becomes obvious how to sell future clients at a premium price. Almost inevitably, the followup question will be: “Well, what about my past clients?”

As a freelancer, you’re constrained by your time and availability.

Some companies should grandfather in their existing customers when they decide to raise their rates. A software company can happily keep you onboard as a customer and sell 10x more licenses to their software without increasing their overhead by ten-fold. But you only get so many hours a week that you can help your clients.