Raise your hand if you charge your clients by the hour.
(Yup, I see a lot of hands out there.)
That can be a bad idea.
Recently, I was chatting with a woman who noticed a HUGE SEO content opportunity for her B2B client. When she asked me what she should charge, she clarified that the job wouldn’t take her much time — but, it could result in a 10X increase in her client’s search traffic.
Since the lifetime value of her client’s customers was $10,000, a 10X increase in traffic — with an average conversion rate of 6 percent — would mean a huge income spike. That’s pretty cool.
What’s not cool? Listening to the writer devalue her knowledge and expertise.
Instead of thinking, “Hey, I can add a lot of value here, so I should be paid accordingly, she made excuses as to why she shouldn’t charge “that much” because the job “wouldn’t take her that much time.”
Here’s the thing…
It’s easy to get into the “trade dollars for hours” trap. Especially if you come from the corporate world. If you charge $50 an hour — and the job took two hours — you’d get paid $100 for your time.
But, what if your specialized knowledge is helping clients drive thousands (or more) in profits every.single.month?
Does it still seem correct to charge just $100 (or $500, or $1,000) for your time?
Nope. Not by a long shot.
Think about it: hourly pricing can penalize freelancers for their expertise.
Sure, when you first started out and your writing skills were rough, it could take you 10 hours to write a page. Keyphrase research would take forever. It would take three times as long to find a fraction of the opportunities.
But, what if after a few years, the same page takes you just two hours to write? Plus, you can look at a page and instantly know what to change and why.
Should you take a massive hit because you’re a better, faster and more efficient writer?
At the very least, you should raise your hourly rate every year. Some experts say every quarter.
That may seem scary. I get it.
Top attorneys cost more money. Top accountants cost more money. Top business managers cost more money. Heck, if you want private coaching with Tony Robbins, it will cost you a cool million a year.
You don’t hear Tony Robbins saying, “I was able to figure out that guy’s problem in two minutes, so I’ll give him a huge discount.”
If he doesn’t say stuff like that — why should you?
Your business is not a charity.
One huge trap entrepreneurs and solopreneurs face is charging too little for their knowledge. They want to get clients in the door, so they slash their rates and do everything on the cheap.
That’s great for the clients. Not so great for the entrepreneur.
The result? The entrepreneur burns out. Work quality goes out the window. And, they have to work with clients just to make ends meet.
They end up putting everyone’s financial needs before their own…and inevitably, everything breaks down.
Ain’t nobody got time for that. 😉
The good news is, you have the power to improve this situation. It’s all about changing your mindset and focusing on what’s really important.
Sell your value. Not your time.
If someone came to me and said, “Heather, I can improve your sales process and help you increase income by 15 percent without increasing costs,” I would be ALL over that person.
In fact, I’d be prepared to pay more for that expertise. Especially if that person proved she understood my business model, my industry, how I worked, and what I wanted to accomplish.
Plus, I’d worry if that person quoted a super-low rate without explanation. I’ve heard of writers getting bounced out of sweet remote corporate gigs because their rates were too far below industry average.
So, charging too little can be as detrimental as bidding way too high.
How do you find the middle ground of charging what you’re worth?
First, and I’ve discussed this before, it’s important to showcase what you can do for your clients. That means showing them case studies, positioning reports, and testimonials from happy clients.
It’s one thing for you to say, “Hey, I can move the needle on your business.” It’s another when your clients praise your services, and you can prove results.
You also want to learn everything you can about how your client’s site is currently performing. For instance, what’s the conversion rate? Where are they getting their leads? What’s the lifetime value of a customer?
The more you know about a client, the more you can dovetail your value with what’s important to them.
For instance, you can say, “I charge $5,000 a month.”
Or, you can say, “Assuming we generate 100 new site visitors a month at your current conversion rate, that results in an income bump $12,000 per month. My fee is $5,000 a month to make it happen.”
Who would you rather hire?
What if a client asks your hourly rate?
I love Carol Tice’s answer to this: it’s none of the client’s business. Nor is it the client’s business how long it took you to write something.
At the end of the day, it’s about results. Not how much time you spend.
I’ve flat-out told clients that I don’t work hourly. My rates are my rates. After all, I don’t ask my dry cleaner how long it takes to clean my clothes.
Maybe that’s something you can try, too.
What do you think?
Are you ready to kick hourly pricing to the curb? Or, do you bid on a project basis? Hit “reply” and let me know!
Want to write better headlines and get more writing gigs? YES!
Do I have the webinar for you! On July 18th, Carol Tice is running a freebie webinar with Linda Formichelli on how to write better headlines.
We can ALL use a little headline help, so I’m excited to learn some fun new tips. Want to sign up? Here are all the details.
Have a fantastic week!
Your challenge this week? Send a “thank you” email to someone who has made a difference in your life. You’ll put a smile on their face — guaranteed (and probably yours, too!)