Pricing Course Lesson 3 – How to avoid being seen as a cheap commodity

How to avoid being seen as a cheap commodity

In the last lesson, we discussed why the label “freelance X” is not ideal — especially if you’re looking to find higher value, more lucrative clients. (That’s why you’re getting this email course, right?)

So as a natural followup, let’s start to talk about how you can distance yourself from coming off as a commodity, and instead present yourself as a premium consultant to your clients.

What makes a consultant different?

A lot of us, especially those involved in more creative fields, tend to avoid the word consultant. It conjures up images of suits and ties, and sitting in “strategy meetings” with Fortune 500 companies. My distaste for the word came from an idea that consultants were all talk and no action — they advised their clients on what to do, and often had little to no real world experience at practicing what they preach.

But I think before we throw the baby out with the bath water, it’s vital to understand what consultants do well, and why their clients typically pay them so well.

In the world of business-to-business (B2B) relationships, there are two universal truths that are important to understand:

It’s critical to realize that this is ultimately why people hire you — your clients have reasoned that paying you for a new website can, for example, get them more customers and help them make more money. It’s not about the website, it’s about what they think that website will do for them. Or they want new content written because they think it will help them establish more trust with their customers. Or they want a free iPhone app built because they think there’s a chance it’ll be acquired for loads of money.

Consultants capitalize on these two universal truths, and sell solutions to their clients that are meant to directly affect the business of their clients.

The issue is that most freelancers focus solely on what it is we do, instead of why it is we do. And this naturally sets us up as a commodity, because the what without context is just an expense; a cost that the business incurs. And when businesses buy stuff, whether it be reams of paper, computer equipment, or a new website, they want to minimize their costs.

But what happens when we start focusing on the why?

When we stop selling websites (or whatever it is you do), and start instead selling why it is your clients need a website and what it will do for their business, we can then position ourselves as an investment instead of an expense. An expense is a website; an investment is paying for new customers, whose total value outweighs what it cost to get those customers.

You may be familiar with the concept of “cost centers” and “profit centers”, terms popularized by Peter Drucker more than 50 years ago. In most businesses, the sales and marketing team is a profit center — their sole purpose is to make the business more money. But customer support and IT are often seen as cost centers — they keep the business running, but don’t typically affect sales. (Really smart businesses blur the line, and train departments who are typically seen as an expense, like a call center support team, on how to increase the lifetime value of their customers.)

The closer you get to the actual businesses behind the projects you work on, the better it is for you and your business.

For many, this is uncomfortable at first. We’re not all amazing at business. You probably never had to manage a department or run a business other than your own. Getting involved in your clients’ businesses can be intimidating — after all, it’s easier to sell what we’re confident at (e.g., making websites.)

The rest of this course is dedicated to helping you overcome whatever roadblocks — either internal or due to a lack of experience — are keeping you from becoming more vested in the businesses of your clients.

Simply changing what you call yourself or just doubling your rates on your next proposal isn’t going to set you up to be a high value consultant who’s in perpetual high demand. It’s going to require you to radically rework the way that you work.

So over the next few days, I’ll be covering a strategy that you can use to change the way you sell yourself to your clients.

And you’ve already started that change.

The other day, when I had you consider the implications of the word freelancer and describing yourself by what you do for others, you set into motion a shift in your outlook.

Let’s keep that momentum up — here’s your next homework assignment 🙂

Lesson 3 Worksheet: Are you an expense?

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