8 Reasons to Put Your Prices UP This Recession

The Relationship Between Price & Brand

Your external image (your brand) is a two-way channel through which you communicate with your prospects. Looking where you pitch yourself in the market, your brand needs to do 2 things at the same time:

• It has to communicate the kind of projects you want to do,
• and it has to show that you already do them.

So if you want to work on great projects, you need to show great work. If you want to pitch yourself to a certain market sector, you have to look like you already serve that sector, so you can only afford to show work that suits that level. (If you want to work for multinationals, it would be better to show no client work than the site you did for Tina the Florist, no matter how successful.)

I know there's a recession or something weird going on, but I'm going to ask you to think seriously for a minute about putting your prices up!

Here are 8 great reasons why you should consider increasing your rates for the recession:

1. You'll make more money, with less work.
2. Get better jobs.
3. And easier clients.
4. And more spare time.
5. Minimise your opportunity-cost.
6. Builds your brand, and sets high expectations.
7. Create stuff you're really proud of.
8. The cycle goes on.

1. Make more money, with less work

This is really straightforward maths. If you charged double what you charge today, you'd only have to close half as many deals, and do half as much work to earn the same turnover. That means you'll be fresher and more energetic, and everything you do will have more impact. Read on and see how the benefits cumulate to give you a bigger and bigger punch.

2. Get better jobs

If you want to work on great projects, don't charge peanuts. Good clients with really appealing, interesting projects don't want to pay a monkey peanuts. They want to pay a professional, so they're likely to discount anyone who's too cheap! Almost by definition, if they are looking to save on the fees, they're not really committed to getting a great job done anyway.

3. And easier clients

We've learnt over the last 10 years that the clients who pay the highest fees are more engaged with their projects, more willing to contribute, and often easier to please! How can that be?

Well, I see it this way: If you want a professional, you'll expect to pay pro rates. If you want a professional, and pay pro rates, you expect to get someone who's really good at what they do! When you hire that kind of person, you can give them more scope, more trust, and more resources, to get the very best out of their skills.

In my experience, the clients who argue over the nickels and dimes tend to be the pickiest and hardest to please. These guys often don't really want an expert; they want someone they can tell what to do and kick around. Very few of these sites ever make it into my portfolio, which kills the spiral more.

4. And more spare time

Use the time you save by doing less work for more money to market yourself, publicise, blog, promote.. hey - even rest!

Ever wondered how these bigger agencies can afford to make such flashy sites, put so much energy into their case studies, and have someone blogging about their successes, while you're chasing your tail every month?

They realise the cyclical pattern of marketing. If you build a brand that seems worth bigger bucks, you need to bill bigger bucks, to give you time to build the image of big bucks.

5. Minimise your opportunity-cost

Taking on low-paying work can be very expensive. If you're busy working for a low rate, you can't take on a better-paying project. The money you'd lose by not being able to do something more valuable than what you are doing is called "opportunity-cost". By saying “no” to budget jobs, you decrease your opportunity-cost, and increase your potential earnings.

Also consider, if you're chasing your next check, how are you going to find the time to devote to doing all the listening a high-value prospect needs? You need to build in some overhead into your fees to allow you to do a proper job of sales. That's why bigger agencies can be much more expensive: they have more overheads to cover the quality of service on many sides, one of which is a patient, committed sales effort.

6. Builds your brand, and sets high expectations

Setting your bar high means you have to raise your game. People are amazingly adaptable, and what we're capable of is so often limited by what we believe we're capable of. When you choose to be a blogger, an SEO specialist, an accessibility guru, or a high-end consultant, that's what you are. When you set high expectations of yourself, you'll do better, even if you don't always meet them!

“The greatest danger for most of us lies not in setting our aim too high, but in setting our aim too low and achieving our mark.”

Good clients with juicy projects are looking for someone with a high bar. When they see you, let them see someone who simply does high-end work. Their expectations of you will be higher, which ironically can make your job easier!

7. Create stuff you're really proud of

When you set out your stall as someone who does a great job for good pay, you'll be more likely to create web solutions that you're personally proud of. That feels great, and it starts to fill your portfolio and client list with great sites and names.

Which brings us on to the golden 8th benefit…

8. The whole thing generates

I'm sure you can see now how this is all a self-generating loop. The trick, of course, is how to start? How do you just be a better web designer/developer? Well, the straight answer is, you just be it. There's no magic bullet.

You can choose to be, right now, the best that you can imagine yourself being. Close your eyes and imagine the best web site you can imagine. Well, if you can visualise it, you can create that web site.

Here's the bad news, friend. The only thing stopping you is you. You are your own worst enemy here.

The good news is: the only thing stopping you is You! You can change it right now, and step one is to believe you're worthy. You can't work your way round it, you can't edge your way into it. If you choose to be really good, you've just got to start being really good, by which I mean choosing to be it, believing it, and doing everything you do out of that choice. You will start researching, designing, making choices, selling, and pricing being a better web designer.

So go ahead and cut out the stuff from your portfolio that doesn't represent who you now choose to be.

As you start saying “no” to the jobs you don't want, and waiting for the jobs you do, you'll build up your self-belief to the point that it's natural.

Tips on Pricing Your Services

Aim to Lose Half Your Leads Based on Price

Hint: If 50% of people aren't saying “no” to you based on price, you're too cheap. Also, practice saying “no”, and learn to celebrate it as part of your new being/brand.

Don't Aim Low, as You Might Get It

Don't work out the minimum you need to live off, and shoot for that, because you'll frequently need to use more time to do a good job, and if you're aiming for the breadline, you'll do slightly worse.

And don't do your calculations based on a 60-hour week! If you have to work 60 hours a week to keep yourself afloat, your boat is leaking. 

Instead, don't think about the money. Sure, make a note of the minimum you need, but you really need to aim much higher than that to be OK. Approach the picture backwards. Think: What kind of client do I really want to work for? What do they expect to pay?

Raise their expectations to your level - don't lower your prices to theirs!

Don't advertise your prices

It never works! Advertising prices can only cost you. I'd love for that not to be the case, but logically it doesn't make sense to list your rates.

• If someone's prepared to pay more than the rate you advertise, they'll take a lower price if you offer it, so you lose.
• If someone wants a cheaper job (which you might be able to do and still turn a profit on; or which you may be keen to do because you just want to; or you really need work this week), and you advertise higher rates, they may also be put off, so you lose.
• If you have clients who've previously paid you higher amounts than you advertise, they may not be happy to see you advertising lower rates.
• The reality is that pricing can often depend on a lot of factors (timeliness, client's budget, urgency, how much other work you have on, how much you want the project, not to mention the particular requirements of the job), so it's really not realistic to advertise rates, unless you want to leave a massive range, which doesn't help anyone anyway.
• Even day-rates are misleading, and is more likely to open you up to detrimental comparisons. There's always someone out there posting cheaper rates than you. They may have hidden costs, or may take longer to do a job, or may likely not do as good a job.

My advice is, avoid the risk of being compared on base numbers, and focus on selling your benefits first. Once someone's bought in to your approach, they'll be amenable to paying your fees (if they can afford them).

I hope these tips have been helpful, and encouraged you raise your eyes above the horizon. There is a world of possibility there, even in a recession, just for the choosing.

Have a great 2009!

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