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"Double Your Freelancing Rate" Course Sample

http://doubleyourfreelancingrate.com

"Double Your Freelancing Rate" Course Sample

  1. 1. About This Course p. 4 Preface p. 7 1. Understanding Your Clients Why Do We Become Freelancers? p. 10 What Do Clients Want? p. 13 Case Study: Steve Corona p. 17 Qualifying New Clients p. 21 The Pain Behind The Project p. 29 Quantifying The Financial Upside p. 33 Case Study: Eric Davis p. 40 Getting To A Solution p. 44 Working With The Wrong Clients p. 51 2. Your Rate Trapped In The Middle Of A Project Pitch p. 55 The Science Of Pricing p. 57 Case Study: Tim Connor p. 60 Avoiding Commoditization p. 64 Reducing Risk p. 68 Table of Contents i
  2. 2. Case Study: Ryan McGeary p. 74 Project Billing Structures p. 78 Value-Based Pricing p. 87 Determining Your Rate p. 91 Being Confident In What You Charge p. 94 3. How To Close The Deal When To Propose p. 97 Structuring Your Proposal p. 104 Case Study: Brook Riggio p. 115 Packaging p. 119 Case Study: Stephen Ou p. 128 Handling Pushback p. 131 4. The Path Forward Selling Retainers p. 135 Productized Consulting p. 146 Case Study: Jim Gay p. 153 Raising Your Rates On Existing Clients p. 156 What Does Tomorrow Look Like For You? p. 159 My Standing Offer p. 167 Acknowledgements p. 168 ii
  3. 3. This course — and the wording here is intentional — is meant to help you better understand your clients. Once you know why clients hire you and what they’re expecting, you can deliver a better product at a premium. My goal is to bring you through the entire lifecycle of a client relation- ship, from first meeting through project handoff (and beyond.) What you’re reading now, on your computer or e-reader, is one part of this course. This guidebook is meant to inform. Beyond this guidebook, how- ever, I’ve included additional resources that are meant to get you to act. Are you familiar with the 80/20 rule? The idea, when applied to some- thing like an instructional course, is that only 20% of people will actually do something as a result of learning something new. This means that there’s a very good chance that you’ll go through this course and afterward make zero changes in your business. Now, I have an ulterior motive for wanting you to actually use this course and raise your rates. I want you to be a success story. This course is self-published and bootstrapped — I have no publisher or agent working on my behalf to sell as many copies as possible. What’s sold this course over the last two years are recommendations. About This Course 3
  4. 4. So to improve the likelihood that you’ll digest this course and raise your rates from 20% to something considerably north of that figure, I’ve also in- cluded the following: ★ Worksheets: You received a PDF with worksheets. These are meant to help you externalize the inevitable ideas and thoughts that will be spinning around your head after we conclude certain key parts of this guidebook. Ideas have short half-lives, so I’m going to ask you to write many of these ideas out. The act of committing thoughts and actions to paper — whether virtual or real — will make you more successful. ★ A Followup Accountability Course: A unique advantage of self- publishing is that I have your email address. Had I sold this at a bookstore, I’d receive a royalty but not a customer. You’re now registered to receive a series of what I like to call “nudging” emails and additional content, which you’ll begin to receive automatically in a few days. The intent of these emails is to ensure that you’ve made progress, and many of these emails will ask you to reply — and I personally read and respond to every reply I get. Again, I want you to succeed. I want you to become so wildly successful that you can’t help but tell others about my work. :-) ★ 7 Written Q&A-style Interviews: These are friends of mine who go above-and-beyond the average freelancer. You’ll hear in their own words what led them to charge a premium rate. 4
  5. 5. I also have a higher-end package, which includes: ★ 12 Case Studies With Successful Students: These are all people who have taken this course and are now charging significantly more than they were before. I made it a point to interview people from all walks of life — a nomadic marketer in Barcelona en route to Bangkok, a just-out-of-college web developer, the owner of a thriving agency, and more — so that you can relate to and better understand the challenges they faced and how they overcame them. ★ Proposal Writing And Retainer Templates: Don’t reinvent the wheel. I’ve packaged up a ready-to-go proposal template and retainer template that you can use with your clients. ★ Video Course On Retainers: I extracted this mini-course from a 6+ hour workshop I hosted with my friend Patrick McKenzie. We’ll cover retainers briefly in this guidebook, but this mini-course expands on productized consulting through recurring retainers. 5
  6. 6. There are three ways businesses make more money: ★ Get more customers. ★ Increase the amount each customer pays you. ★ Increase the frequency your customers pay you. This course focuses on the last two bullet points. While much of what we’ll be discussing over the upcoming chapters will, as a nice little side effect, help you get more customers, our focus will be on making you more money from what you already have. We’ll start with understanding your clients and their needs. Etymologi- cally, the word client comes from the Latin word for “protection.” We’ll take this definition to heart throughout this course, and learn how we can provide for our clients in a way that surpasses simply delivery a commodity service. Next, we’ll talk about pricing. We’ll look at the various forms of pricing, and how by reversing risk and better positioning we can raise our prices. We’ll also explore what value-based pricing is and is not. We’ll close the sec- tion by talking about personal confidence as it relates to what you provide your clients and what you charge, and I’ll help you come up with your new rate. Preface 6
  7. 7. After we explore pricing, we’ll move toward closing the sale. A lot of time and effort is spent getting to the point of being able to furnish a pro- posal, so it’s in your best interest to optimize your closing rates. I’ll walk you through exactly how you should structure and write your proposal, and how you should deliver your proposals and respond to pushback. Finally, we’ll talk about ways to make money that don’t involve selling an hour or your time for a fixed amount. This last section will help us in- crease the lifetime value of our clients, and give us stability and predictable revenue so that we can march forward in confidence. The Origins Of This Course When I started out freelancing, I really had no idea what I was doing. The only other time anyone had ever paid me any serious amount of money was through a formal employee-employer relationship. I thought I was sell- ing my technical abilities, and I figured those abilities should have some sort of predefined price attached to them. So I asked around… how much should a freelance web developer charge? What should I do to get hired? How do I get paid? This course is everything I’ve learned about pricing, clients, and sales and marketing as it relates to selling consulting services. I learned this the hard way — as I grew my company from a solo freelancing gig to a brick and mortar agency with full-time staff, an office, and plenty of expenses, I had to to systematically increase my revenue. I had to make more money, or go out of business. 7
  8. 8. Before talk about pricing, it’s important to understand why clients hire you and what they’re looking for. I’ll cover how you can take any project that’s brought to you and identify the problem behind the pro- ject, what the solution should look like, and the financial impact the problem is making on the client’s company. UNDERSTANDING YOUR CLIENTS 1 8
  9. 9. When we have an understanding of why a project has been commis- sioned and what the business implications are for both its success and fail- ure, we now want to quantify exactly what those implications mean for the business. It’s one thing to tell a prospective client, “We’ve agreed that not doing this project will cost each of your employees a few hours a week in lost pro- ductivity.” Or, “You’re losing sales because hardly anyone who visits your website contacts you.” But it’s entirely different to say, “Over the next year alone, recovering 5 hours a week per employee of productivity will save you around $300,000 in payroll overhead.” Or, “If we can get you two more leads a month, that will add $5,000 in new business each month to your revenue.” Why We Quantify Quantifying what the financial upside is for a business communicates two powerful concepts to your clients: 1. You’ve done your homework. You’ve spent the time to understand and calculate exactly what this project means to their business. Quantifying The Financial Upside UNDERSTANDING YOUR CLIENTS 32
  10. 10. 2. You can anchor this upside against your costs. We’ll use basic psychology to communicate “spend $1 and get $2 back” when putting together our proposals. I very rarely see anyone outside of enterprise solutions consulting doing this. Most freelancers, as we’ve discussed, are singularly focused on their craft — what are we doing, and how will we do it? Calculating Your Clients’ Upsides It can be tricky to calculate the financial upside for your clients, and there’s no one formula to fit every case. However, there are ways to make cal- culating the upside easier and more reliable. The easiest way to start is to realize that the end goal of almost any paid project is to either create more customers or sales, or to increase the value of customers or sales. One early student of my Masterclass designed and wrote websites for psychiatric care clinics. The commoditized method of selling these websites might be to figure out the going rate for a WordPress site with a handful of pages and a contact form. But since he wanted to deliver a better product for his clients and also make more money, he had to first focus on the customer and what their goals were with the website. So he asked one of his clients, “What’s the value of a customer?” He learned that the average value of a patient in a bed at one of these care cen- ters was about $30,000 of revenue. The next question he asked was, “And 33
  11. 11. how many leads do you typically need to talk to in order to get a new pa- tient?” They replied with about ten. From here, it was easy for him to calculate the value of a lead. The aver- age value for a lead to a psychiatric care center is about $3,000. This gave him insight that would allow him to immediately set himself apart from the other companies who were bidding on these projects. Instead of saying, “I’ll design and write a site and its copy for you”, he was selling new leads to his clients. He proposed solutions for getting them new leads, which in turn would get them new customers at $30,000 a head. 1. What is the average value of a new customer? (This is known as CLTV, or “Customer Lifetime Value”) 2. How many leads does it typically require to convert someone to a customer? There’s a difference between a lead and a prospect. For instance, everyone who visits a psychiatric clinic’s website shouldn’t be considered a lead; but anyone who visits the “Contact Us” page or does some other key interaction is (this is commonly referred to as activation.) 3. What percentage of prospects become leads? A prospect is a set of eyeballs that’s viewing your project. How many people view the sales letters you write for your clients? The website you designed? The application you developed? Then separate out the number of people who make it to the call-to-action, the order page, or the sign- up page. 34
  12. 12. The further you get down this list, the more control you have. If you’re creating a website for someone, you might not control the value of a cus- tomer, but the site you design directly influences the number of people who become customers. Getting some of the numbers that are higher up the food chain — like the value of a customer or how many leads a sales team typically talks to be- fore closing a deal — aren’t always numbers that are openly listed. Since you’ll be getting these numbers during the sales phase (where the prospective client probably hasn’t signed anything yet), you’ll likely want to have them sign a non-disclosure agreement (NDA) before receiving these stats. While discussing the financial upside with a client, I’ll precede the con- versation with, “For me to make sure I can help you, I’m going to need to ask you some questions that aren’t exactly public. For your own protection, could I get you to sign this non-disclosure agreement? This will make sure I’m not able to share this information with anyone.” This makes you look like an upstanding professional — you understand that their business has sensitive data, and you’re securing the relationship be- fore they even need to ask. But additionally, you’re now signing a legal agree- ment between your company and theirs. This is another psychological “trick” for setting the stage for them becoming your next client. 35
  13. 13. Non-Obvious Cases It’s not always easy to figure these metrics out. If you’re managing Ad- Words campaigns and landing pages, this is really simple to do. However, if you’re a backend database administrator, you’re often pretty far removed from money changing hands. I worked with a client where we were going to be rewriting an internal application of theirs (I’ll cover their story again in the next chapter.) But on top of a simple rewrite, we wanted to improve the usability of the product — this application was used all day by their sales team, and the current ver- sion of the application was haphazardly slapped together over the years. While the tool was used to help the sales team work on more deals, it wasn’t anywhere close to being customer facing. So how could we identify the financial upside here? It started with getting to know how people used the current product. What sort of workflows did members of the sales team go through to do their job? We learned that there was a lot of waiting — click this button, wait 30 seconds. There were also a whole lot of clicks. There were plenty of things that could be reduced to a click (either by optimizing interactions or doing more backend processing.) Within just a few minutes of speaking with peo- ple, we had an idea of how much time was being wasted every day by sales- men who just wanted to close more deals and make themselves and the com- pany more money. 36
  14. 14. Once we knew how much time was being wasted each week, we then used the “pull out the NDA” technique to find out how much these employees cost and what their value was to the client. They were the customer, from our perspective. If we could make them more valuable, our client would make more money. We discovered the average baseline salary of these employees was about $40,000 (not including commission.) Factoring in their fully loaded cost, it’s more like $50,000, which is about $25 an hour. Reclaiming even $50 a week for a team of 20 would yield a payroll sav- ings of about $1,000 a week. Next, we looked at how many deals the average employee pushed through a week. We reasoned that if we could really optimize how they worked, we could get each salesperson closing one more deal a week. The value of a deal for the company (sans commission and everything else) aver- aged about $300. Now we’re looking at $6,000 in added profit each week. So far we realized that by making the application that’s functionally the heartbeat of the entire company run more effectively, we’d be saving/making the company about $7,000 a week. In a year, that’s $364,000. …Which happened to be pretty close to the estimated cost of the project. Had we just gone in with, “We’ll rewrite and optimize your application. And it’ll cost $400,000”, it would have been a very, very hard sell. But by an- choring our costs to the financial upside for the first year alone, we’re posi- 37
  15. 15. tioning ourselves as a money-maker for the client — and not just an expen- sive development shop. It’s not always obvious how or why the project you’re brought will im- pact a company’s bottom line, but it does. And when you can identify what that impact is, you’ll have a much easier time both justifying your costs and proving to the client that you understand what they’re looking for. 38

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