In this video, I share one strategy for freelancers, service providers and knowledge experts to get paid what you’re worth and stop racing to the bottom trying to compete with low-cost competitors.
Alright, thanks for joining us today. So today I’m going to be talking about how to get paid what you’re worth.
So if you’re a freelancer or if you offer some kind of service if you are a consultant or a coach or knowledge expert and any type of service provider, you know, either whether you offer legal services or accounting services, whatever then this video is going to be perfect for you.
Okay, so one of the biggest problems as a service provider is you’re often in a very commodity-based business right so let’s just say, you know like a graphic artist or graphic designer designer web design accounting or bookkeeping type of service.
The biggest problem is…
When a lot of the big problems is comes down to the way you price your services, okay? So, that’s just typically how a freelancer or a service professional is going to price, you usually price your services on an hourly basis, right? That’s very, very typical.
So what happens when you know, like a potential client or a prospect comes up comes to you, they’re going to ask you: “Well, what’s your rate? hourly rate?”
Right? And then you say, Okay, well, this is how much I charge per hour. Okay, and then then then they’ll go off and then most likely at 90% of the time, you never hear from them again, right? Or even if they do, they’re going to say, Oh, well, I spoke to this other service provider and this is how much they’re charging per hour and you know, and this Providers probably charging a lot less than you.
So what’s going to happen is they can just say, Well, you know what, I’m only gonna, I don’t know what the difference is, if this guy’s charging, you know, much less per hour than you, then I’m just going to go with that provider.
And then it’s just a vicious cycle. And you just kind of like you just want to, like, you know, hit your head against the wall, because you don’t know what else to do. Right?
So this is the main problem. Okay, so this we’re going to show you I’m going to show you today how you can overcome this problem. So the main problem is in how you are pricing your services.
So as I mentioned, if you’re pricing your services on an hourly basis, then you are basically what we say commoditizing your service,
You become a commodity.
So what happens is that all prospective buyers are just going to compare you on an hourly, what your hourly rate is.
So, now there’s various strategies to overcome being commoditized. And today I’m just going to cover one of these strategies.
Here’s one way to to get paid what you’re worth
Okay, so one of these strategies is as I mentioned, is the way you’re pricing your services.
So if you’re pricing per hour that’s pretty much setting yourself up to be commoditized and really, prospects are going to be just going after choosing the lowest cost provider. So you don’t want to do that you don’t want to be pricing yourself per hour.
So what should you do then? Right?
Let’s say when it comes to your prospects, a prospect of client or customer, you got to think about, well, what are they What’s the reason behind why they, they want your service, right?
They they need help from getting from point A to point B. They want some kind of a result from your service.
And the other thing is they don’t want to do it themselves, right? They want to pay somebody to do this for them to get from A to B.
Now this point B or this destination or the result your prospect or client wants to achieve this result they are going to assign some sort of value to this result right and the there will be some kind of a monetary value to this result.
So let’s just use web design again for as an example. So prospects for this web design business, they believe that once they get a website, a well designed and structured website, this website will help them sell whatever services or products they are selling for their business.
So if it’s done right for them, they have attached a certain value to it.
Don’t do this…
So typically, like we were saying, the biggest problem that service providers do is they charge per hour, right, so we don’t want to do that.
So what you want to do is you want to be estimating “Well, how much value will my ideal prospect or client put on a well designed and well-implemented website?”
For them (the prospect) it’s like having a proper website that’s fast loading so it comes up high in search results that will bring in sales for them.
So, have a look at what what they’re selling, maybe they’re selling let’s say $1,000 services or maybe let’s use an accounting provider as an example as your prospective client for web design.
So as accounting or bookkeeping clients, if you do a good job for them, those clients are going to be worth quite a bit of money over their lifetime.
So let’s say you charge, I don’t know $1000 per month for bookkeeping services okay and let’s say a typical client and then if you do a good job they’re going to stay with you for entire year and then they want to continue that you know ongoing and let’s just say a typical client let’s say they stay with you for about five years.
So over the lifetime of this accounting prospect of accounting client, their customers if you design a website that helps them close or convert prospects to clients then how much is a client worth to them right?
So that’s one thousand dollars times over a year and then times five years how much is that, that is a lifetime value of what $60K right?
That’s $60K, so let’s say you charge, so then you can quote this prospective accounting client for a well designed and implemented website say, you know, $10K or even I don’t know even half of that may be $5k for a website and how about that because that becomes a drop in the bucket if you your website help that you build for them helps them get clients that are worth $60K to this accounting firm over a lifetime, right?
So you’re not going to be just helping them close just one client per month, you know, right. So if you explain this to them, if you start presenting the value of the result that you help them achieve, then you start pricing it relative to the value of the results, okay?
So instead of the mechanism or how many hours you put into designing, this way, when you quote per hour people are going to just compare your hourly rate to everybody else right?
And then when you start to to get into the third world countries providers that quote a lot lower rate because simply their cost of living doesn’t cost as much maybe for you, right?
So they can do that and there’s nothing wrong with that right?
That’s not their fault that they are able to quote something lower than you it’s actually initiative you then you need to play a different game stop quoting by hour and start quoting by value that you bring or that you help achieve or the result the value of the result that you help, your prospect or client achieve.
And when you start pricing yourself properly it makes it harder for other competitors to, your prospects will find it harder to compare you to other -cost providers right because they’re not comparing apples to apples they’re kind of comparing apples to oranges and when you present it like this and whereas other low cost providers are just simply just fighting to the bottom of the barrel with however the lowest rate that they can charge or quote.
You know you’re here just quoting you know my service is $5K and when you present it like this you know versus like a $60K lifetime value of a client that you’ll help your prospect to achieve to him/her $5k looks like nothing right.
So this is one strategy to get paid what you sho
uld and be valued for what you bring to the table for what you do.
Now, of course, this only works if you do a good job and you are able to achieve the results that you are promising. Okay?
So that is very dependent on that. So you can’t be some really crappy service provider and offer poor service and zero results. So doing this pricing strategy where you stop pricing per hour and making it harder for prospects to compare you on a only a price basis then that is one part of winning the game of getting paid fair value for your services.
Okay, so I hope you like this video.
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Thank you.
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