Note: This transcript was auto generated. As our team is small, we have done our best to correct any errors. If you spot any issues, we’d sure appreciate it if you let us know and we can resolve! Thank you for being a part of the community.
Verbatim text
Lee Matthew Jackson:
Welcome to the Agency Trailblazer podcast. This is your host Lee. And on today’s show, you’re gonna be hearing my ramblings about the fear involved with pricing those projects. Hopefully, I will introduce you to a mindset that will help you ask the right questions so that you can put forward the right price, which is both good for you and good for the client. So sit back, relax, and enjoy the ride. Before we kick off the show, here is a word from our sponsor.
Content Snare:
Do you need to collect content from your clients before you start their website? It’s a lot of fun. Right? Constantly chasing them up for months and then it finally comes back in a storm of 75 emails with huge attachments that you have to try to organize? Content Snare is on a mission to fix this, it helps you get content back in one central place and chases your clients for you. Give it a try at content snare.com. Use the code trailblazer when you sign up for 20% off.
Lee Matthew Jackson:
Welcome to the show, and today it’s just you and me. So sit back and grab a lovely drink. Actually, that’s not really gonna work, is it? You can’t actually sit back whilst grabbing a hot drink. That could be a little bit dangerous. So please be careful with whatever it is that you are doing right now. But do listen well. We’re gonna talk about pricing, and it’s a conversation that we’ve been having over and over again, both internally in the group and also in the 1 on 1 consultancy calls that I do with agency owners around the world. And it’s this huge issue of pricing and the fear around pricing.
Lee Matthew Jackson:
2 of the most common fears are, will I price myself out of the job? I not win it? Or will I not charge enough and, therefore, I’m not gonna make enough money on this project? I’ll still win it, but I’ll feel bummed out because I’ve done all of this work. I’ve been bled dry, and I’ve only got a little bit of money to show for it. Either is not great for business. It’s not great not to win business, and it’s great to have projects that go on and on and on, and you don’t make enough money from them. So I wanna talk about those and just share some lessons that we’ve learned along the way. And I’m gonna caveat all of this with I still battle every single day with fear. Fear about my business, fear about the pricing, fear about what people are going to think, and I always have to just take that step out away from it and give myself a pep talk. So everything that I share with you, please do not think that I am preaching to you, that I’m telling you what you should do, that I’ve got it nailed because anybody that tells you they’ve got it nailed is probably kidding themselves and, and you as well.
Lee Matthew Jackson:
So just know, it’s just like when you go to the church and you’ve got the preacher. The preacher who’s telling us all these wonderful things that we should be doing in our lives is totally working on it, him or herself as well, trying to achieve these wonderful goals. So we’re all in the same boat. Let’s help each other out. And on that, before we get stuck in, don’t forget that we have the free Facebook group over on agency trailblazer.comforward/ group. That’s agencytrailblazer.com/group. That’s a place where we can all be sane or insane with each other. We can share what’s on our mind.
Lee Matthew Jackson:
We can share these fears. We can ask for help and advice on pricing for projects. If you’ve got a project that’s coming up, you’re not sure what you should be charging or what elements of it you should be charging for or how you should be structuring that proposal or all of that sort of good stuff, then be in that group. Ask those questions. Let’s help each other out because we’re in an amazing industry. Many industries, the competitors don’t talk to each other. They hate each other. But we’re in an industry where all of us agencies all around the world, we actually like each other.
Lee Matthew Jackson:
We get on well. We like to share, our lessons, things that we’ve learned. We like to help other people, and I definitely believe that no good deed goes unpunished. Meaning, if you do something good for someone, something good is more than likely gonna happen to you as well. Alright. Let’s talk about this whole fear around pricing too high. And I wanna, first first of all, set up the problem and then just kind of unpack some ways of looking at this so that that will give you the confidence to put out a fair price. So pricing too high will receive from the client a brief, and we’ll read that brief and we’ll think, okay.
Lee Matthew Jackson:
They need this, they need that, they need the other. But then we’ll also make other judgments about the client based on really just guesswork. Do we think they have enough money? We look at their existing branding. We listen to the way that they talk. Maybe we’re at their office and we’re having a look around the office thinking, oh, wow. This could definitely do with a lick of paint. I’m not sure they’ve got enough money. And we start to knock that price down in our heads.
Lee Matthew Jackson:
We start to erode our own value because we’re thinking, oh, wow. I’m not gonna win this if I come in too high. I need this money. I need this project to come in, but I’m gonna have to go in low to win this business. And that kinda sucks because it does mean you’ll win the job potentially, and it means that you’ll be working an awful lot to help somebody out for not enough money for you to continue to run a business that you love, a business that is sustainable. So I wanna introduce just one concept to you to help you with pricing. And, yes, within that, there is all sorts of bullets that I’m gonna make. And I’ll make sure there are some show notes down here as well for you.
Lee Matthew Jackson:
But the mindset that I want you to have or to try at least is a no mindset. So let me unpack this a little bit. Somebody comes to you and asks you for a quote. Hey, Jeff or Jane. I would really like a quote for a brand new website for my surfing business. Great. Well, all leads are great. But remember, initially, it should be a no until that no gets changed to a yes.
Lee Matthew Jackson:
What is the client or the potential client gonna say to you? What do they have to offer that is gonna convince you to work on this job? So, for example, is this job within my interest? Do they have a budget available for this job? That’s a very important question. If they don’t have enough money, then that’s not gonna change that no to a yes very quickly. If they don’t have enough money, they need to go away potentially and find enough money. Another question might be, what is the timeline? People very often expect you to be able to create beautiful pieces of art and complex code really, really quickly and it can be very unreasonable, very, very stressful. So what is the timeline? What is the realistic expectation from this client? What is the specification? What do they actually need to do? That’s gonna affect the budget. That’s gonna affect the timeline, and that’s gonna affect your sanity in building this. And, absolutely, it’s going to affect the price. Also, if they’re coming and saying, and I also need an app, and I also need x, y, and z, and you do not do those services, then that should also ring some alarm bells with you.
Lee Matthew Jackson:
I don’t know if people remember the story that I’ve told in the past where as an agency many, many years ago in my old company, we would very often do lots of extra things that weren’t necessarily our key skills. We could do them, but because they weren’t our key skills, they took us a lot longer to do. They were less profitable, and they would become an absolute nightmare to deliver, and that would absolutely impact on the profitability of a job. So, again, you know, in these initial conversations that you’re having with your lead, you need to find out what it is they’ve got to offer you to make your no a yes. You are a valuable designer, developer, consultant. You know your stuff. You have been around this industry long enough to know how to do what your client does not. Therefore, it is the client that needs to be presenting you with something that will convert that no to a yes? If we go into a yes mindset, we’re very quickly going to enter into that whole, oh, this office needs a lick lick of paint.
Lee Matthew Jackson:
I don’t think they’ve got enough money. I wanna win this job. And we very quickly underprice ourselves without realizing the bigger picture. One very last point is on that making no a yes is it’s really important to find out whether the client is a complete and utter idiot because they will drain a project. They will more than likely make you work and work and work and take out any profitability out of the job. They’ll be hard to work with. Working with a horrible, idiotic, rude client is just going to beat you up inside and rob you of the joy of that project, working with that type of client, working in the industry. And before long, if you work with enough horrible clients, you’re just gonna think agency life sucks, and you’re probably gonna give in the agency.
Lee Matthew Jackson:
Oh my gosh. This is also negative. But that’s why we need to start off with this no mentality. Somebody approaches you with a potential job and you are not instantly jumping on there saying, yes. Of course, we can. You wanna, first of all and remember, I’m not saying say no to them. I’m just saying in your head, be cautious and get all the information that you need before you start presenting quotes, before you start saying yes. So to help convince you that that initial no should be a yes, then there are several things within that that you need to understand or that you need to be doing.
Lee Matthew Jackson:
Now the first thing I just want to impress upon you with regards to your pricing is something called time plus experience. You may have heard me talk about this, but very often, we will look at a particular problem. We will know what the solution to that problem is, and we will therefore quote for how long it’s going to take at our standard hourly rate. Now doing that simply puts what we have to offer down as a, yes, this is the amount of hours that I can do it in. However, what you’re missing out on is the several years of experience that you have, which allows you to do whatever that task is in those set amount of hours. So you’ve quoted 5 hours, perhaps, to layout a new contact form to make it mobile responsive and to integrate it with a third party CRM system. 5 hours sounds like a fair amount of time for you to do that. You can do it well.
Lee Matthew Jackson:
It’ll look great. Remember, though, you’re able to do that because you are a highly skilled, talented individual who has spent years years years learning how to do that. Your client, on the other hand, does not have that experience. To them, this form will enable them to capture leads, put that into their CRM system, have their sales team take over those, and convert those particular leads into sales. This is something that is highly valuable to their business, so there is the value element of it, and equally, there is the experience that you have that they don’t. If they’re gonna do this for themselves, they potentially will need to spend 3, 4, 5, I don’t know, days, not hours now, researching how to build a form, how to style the form, how to integrate a form with a third party service, the APIs, all of this sort of stuff that you may or may not be able to do. Bear in mind, my 5 hours was based on integrating with Zapier, not actually integrating with an API. It would be massively more than that if you were having to do an API from scratch.
Lee Matthew Jackson:
Anyway, the premise here is it’s not just the 5 hours that it takes. It is the obviously, the value to the client, the experience, the time saved to the client, and the end result that client’s gonna have with your work. Therefore, we do need to start considering when we price the value, the experience that we have that we are providing to the client. So if we set up a business all around our time and materials and we’re just having to try and sell as many hours as we can to survive, it’s gonna be very hard because it means that we own our job. We’re not necessarily valuing what we have, and it also means that the clients that we’ve, fostered around us also don’t really value what it is we offer because they are very used to using you as an extension of their team, as in an employee, rather than a consultant who is adding something of extreme value that is therefore going to lead to awesomeness like new leads, like new sales, etcetera. So we absolutely have to get ourselves out of that mindset and remember that anything that we do is our time plus our experience. I guess, plus value and whatever other equations you wanna do. Bear in mind, I was absolutely terrible at math, so please don’t ask me about math.
Lee Matthew Jackson:
Remember, there is value in the problem that you are solving. And let me, give you an example of that. Perhaps your client needs to be attracting large companies with multimillion pound contracts. They’re going to be providing consultancy. Let’s say it’s a data consultancy firm. And they need to be able to provide consultancy. They want to get very big fish in through that form so that they can, work on the leads that come in there and just one of those one in 1 year would be worth a £1,000,000 to that business. And believe me, there are some big agencies there that are working on multimillion pound consultancy contracts, especially around the area of big data.
Lee Matthew Jackson:
So this is a really good example. So if you were to just say, right, I’m gonna do this form. It’s gonna take me 5 hours. I’m gonna charge you 5 times £80 an hour or whatever your actual rate is, then you’ve given them something that they will potentially use within a year to sell 1, 2, or 3, £1,000,000 projects. You do have to remember as well that there is immense value in what you have to do. Now I’m sure you’re thinking, yeah. But if I do that, they’re just gonna go to Upwork and all of that sort of stuff. But the problem is, if they’re gonna go and get lots and lots of different freelancers, different contractors around the world, and they’ve got no continuity, it’s gonna create problems for them and they don’t have one person who is completely invested in partnering with them on their business.
Lee Matthew Jackson:
Something I I try and explain to people is that you have a responsibility to your clients to charge them enough to ensure that you have a healthy business and a good lifestyle. Let me just say this again. You have a responsibility to your clients to charge enough to ensure that you have a healthy business and a good lifestyle, and that is not being selfish. Why? Because it’s important that you are still here in year 1, that you are still there in year 2, in year 3, in year 4, so you can continue to provide a high quality, high value expertise to that client. You can help that client grow. You can build their website. You can add features to their website. You can help them grow whatever services they are providing through your talents and through your skills.
Lee Matthew Jackson:
And if you’re only charging things by the hour, devaluing yourself and basically exchanging time for money, you are not going to be able to run a business that is healthy. You will eventually hit burnout. And I am saying this because that was me. Somebody who was exchanging time for money, not valuing what I was doing, only considering myself really as a extra paid employee who just gets to charge a bit more than a regular employee, and there was never enough time in the day to get enough done to get the cash flow going. And if you imagine, if you keep doing that, eventually, you may have to close that business and that is not doing the right service to your client. It’s actually irresponsible. I have to look back at the at those times and I’m thinking, it’s actually irresponsible for me not to charge a fair price that represents my time, my experience, and the value that I’m providing. Because if I’m not doing that, I am putting my own business at risk, and I’m also putting the support and and all of that that the client will find valuable from me at risk as well, which will leave the client in a bad situation.
Lee Matthew Jackson:
So we absolutely need to start with this no mindset. Remember, I’m not saying say no to everybody straight away, but what we have to do in our heads is check ourselves before we jump on any new lead and get excited and ask those essential questions. Find out what it is the client wants. Is it in your skill set? What is the specification? You know, what what is required? What’s the timeline? Do they have budgets? Are you even excited about the project? Is this client a horrible person or a nice person? All of these are things that do take a little bit of time to find out. That might be through a couple of conversations. It might be through some paid discovery, etcetera. But it’s really important to get those done. So that initial, maybe this is or isn’t for me, can become an absolute solid yes.
Lee Matthew Jackson:
The moment it becomes a solid yes, you are all bought into it. You are, the client is, and you can both jump in, get excited, and get something absolutely amazing delivered. Now the other fear that we shared was the fear of pricing too low, not pricing enough. Therefore, you are gonna be stuck with a project that you have to over service and it’s going to be unprofitable and that can lead to all sorts. Obviously, it can lead to the erosion of your client relationship. It can rob you of the joy of your business. All of those sorts of things can be really, really toxic. So it is important that you do charge enough.
Lee Matthew Jackson:
However, even with all of these really positive mindsets with regards to your time, your experience, and value, and all of those things, it can still be very possible to underprice for a project. And this is why that one concept of having that initial no mindset is really helpful both for ensuring that you are pricing good, well that sounded wrong, but you know what I mean. You are you are pricing, based on experience of value, and this is a profitable project. But, also, it will help you to avoid pricing too low because you’re gonna be asking all of the relevant questions right from the get go that’s gonna help you understand, is this something that is within your skill set? Is this a problem that you can solve? How much does the client have to spend? What is the value of the problem that is being solved to the client? For example, is it a multimillion pound contract? All of these sorts of conversations that you will have, which will help move your no to a yes to therefore submit a proposal to a client, is also gonna help you in understanding what budget is available, how much you should be charging so that you can go in confident knowing that not only are you putting in a fair price for the problem that’s being solved, not only are you putting in a price that’s gonna be good for your business, not only are you putting in a price that is going to be good for the client, that’s going to allow them to achieve whatever it is that they want to achieve, but you’re also going to ensure that you are not putting in a price which is too low, which doesn’t cover what is going to be happening in this project. Part of the conversation that will help convert that initial no to a yes is engaging with some sort of paid discovery. That gets your client used to spending money with you, but it’s a really good worthwhile investment. It’s an investment in their own business. They are investing in consultancy from an expert who is going to help them understand their problem in greater detail and understand what the solutions are and create a brief that represents what it is they wanna achieve, what problems they solve.
Lee Matthew Jackson:
Our clients, our potential clients as well, are not necessarily skilled in being able to communicate what it is that they need. They are better at explaining their problems and explaining their business, and they really do need to invest in outside help to help them understand what the problems sorry, what the solutions are to their problems and how they can be resolved. You can document that. And by you documenting all of that, that is going to give you everything that you need to be able to put forward a proposal that ensures you are not pricing too low and that the client will be getting a solution that meets all of their needs. So it’s really recommended if you can engage your client with some sort of paid process to help them, essentially, brief you better, then that’s gonna help get that initial no into a yes. Let’s rock and roll. Let’s solve your problems. Let’s create a beautiful relationship with each other and do business for many, many years to come.
Lee Matthew Jackson:
Okay. I hope you’ve been inspired. I hope I’ve helped you find a mechanism for dealing with those 2 fears. That’s the fear of pricing too high and the fear of pricing too low. Too high, I’m gonna lose the business. Too low, it’s gonna be unprofitable. The mindset needs to be starting off with a no. You need to ensure that you unpack everything you can possibly unpack from every single lead to move that no into a maybe and then to a yes, let’s rock and roll because it’s gonna be worthwhile for you and it’s gonna be worthwhile for the customer.
Lee Matthew Jackson:
So remember, agency life is stressful. We deal with this sort of thing every single day. Even people who are preaching about how to change your mindset and all of that sort of stuff are still struggling with this sort of thing every day. And we constantly have to check each other. And one of the best ways of doing that is being part of a community. It’s having peers that you can connect with, that you can talk with, you can share your problems, and you can be reminded by other people, hey. Now this is what you should be doing. And the best place that I believe you can find that is over in the Agency Trailblazer Facebook group.
Lee Matthew Jackson:
That’s over on agencytrailblazer.com/group. There are nearly 2,000 agency owners in there. Many people loving WordPress. Many people loving design. Many people creating awesome websites and awesome digital solutions. But what’s most important is that many people in there are making really good lifelong friendships and supporting each other. If you and your agency are struggling through a few things and would prefer somewhere a little bit more private with some access to me and the team, then be sure to check out the agency trailblazer paid community. That’s over on agencytrailblazer.com.
Lee Matthew Jackson:
You’ll get access to me in the monthly mastermind. You’ll also get access to training and modules by myself, other members of the team, and other contributors, as well as a private forum to share your goals, problems, and have deep conversations. So be sure to check that out over on agency trailblazer.com. We will see you in the next episode. That wraps up today’s episode. I hope you were challenged with regards to your thinking on pricing. Whether you’re pricing too much or pricing too little, hopefully, this will help resolve both of those fears. Let’s have a conversation about this.
Lee Matthew Jackson:
How are you dealing with your pricing? What questions do you have over it? Do you completely disagree with me? Whatever it is, let’s have a conversation. You can head over to agencytrailblazer.com/group to go to our Facebook group where you will join up to about 2,000 agency owners, web designers, web developers, and general all around awesome people. And we can have a conversation in there. So it’s agencytrailblazer.com, couldn’t say that for a second, forward slash group. We will see you there, and we will see you in the next episode.
