The worst feeling in the world is the one you get when you say to yourself,
“If only I’d just said X, Y and Z, I would have sealed the deal.”
But the bird has flown, the ship has sailed, and you are back to the job board, cold calling, referral asking, or pavement pounding.
As a freelancer trying to grow a business, I am consistently wondering what I do right that convinces a client to go with me versus someone else. I also wonder what I do wrong to leave them unconvinced I’m the best person for the job. Full disclosure: I have very little experience and have spent hours trying to find a tutorial to fix a small bug or contact customer support.
And of course, I am consistently trying to maximize my revenue per hour.
Thinking about it in this way, I’ve already seen a few things that work, things that work better, and things that seem to work best.
What Works: Lowering Your Prices to Gain Experience
This is definitely the WORST way to maximize revenue per hour. That said, it is possible to gain valuable experience and a reference by working for peanuts. For my first few clients, I worked on the cheap and made almost as much money through affiliate links as I did in payments for the projects.
That is to say, I didn’t make much.
What was more important at the time were two primary goals I was trying to accomplish:
- Figure out if I liked doing freelance website and consulting work. (thankfully, I LOVE it!)
- Find clients who I could serve really well, get them a final product they were happy with, and get testimonials and referrals from them. (This worked out just fine. I’m definitely not bored!)
At this stage of the game, you’re just trying to get some client traffic, some income, and make sure you’ve got a deliverable product or service to offer. These can be grueling projects as you figure out your work flow for the first time, make loads of mistakes, and are terrified of being found out as a phony.
But if you can finish these project, you will have learned what it takes to start and finish a freelancing job. In doing so a few times, you will have validated your service, gained experience, and acquired a few satisfied customers along the way.
What Works Better: Increasing Your Prices and Your Offerings
It’s pretty simple: the more you do, the more you can do. The more you can do, the more options you can offer and the more confident you are in your work. You will also know how to better talk about you work, what your client really needs right now (a $500 dollar site to test their idea as opposed to a $40,000 site with all the bells and whistles and no validated idea).
The more you know how to do, the more potential clients you have available to you, because you can complete the projects they are asking for. In this process, there is one consistent piece of advice repeated over and over again:
“Raise you rates!”
Raising your prices, asking for more money is essential to growing your business. You cannot continue to work for (almost) nothing, and expect to last very long. On top of that, if you are providing a service or product that is valuable to someone, they will gladly trade you money for time.
This also helps to achieve two primary goals in this stage:
- You are able to increase your revenue per hour because you raise your rates.
- You begin to find clients you really want to work with, and not just anyone.
For many, this is also a time to niche down and find some specific services you like to provide or find a specific avatar (in this case, target market) with whom you want to work.
What Works Best: Adding Value to Your Premium Product or Service
As you grow more and more into the business of your choice, you will begin to note not only your competition, but the services they provide and the prices they charge. In my case, premium WordPress companies can charge a premium for their services. At this stage of the game, I definitely do not want to compete on price.
So I compete on adding value for the services I provide. I also “price anchor” my service to the other service, and then show a client how working with me has added benefits.
For example, if a client wants me to build a membership website for them, I would point them here, and show them that a full on membership site built by “the pros” is $700. This involves the site build, some extra instruction and extra hours of development. All in all, it’s a great deal for my client.
So why would they go with me?
The benefit I would offer them is security for their site (with weekly backups that I would store), setup and interpretation of Google Analytics, and integration of other social media networks. On top of this, I will use my background in online business to help them strategize testing, marketing and launching their membership site.
All of a sudden, my clients are getting a fantastic deal, because I will go above and beyond for and with them, while still charging a premium price.
Again, this allows for two major goals to be realized in this stage:
- Maximizing your revenue per hour.
- Flexing your consulting muscles: typically clients need more than “just a site”. They also need some guidance on what to do with it when they have it.
Once you have arrived at the third stage, you will know that you don’t need to worry about the “what if” question I started out with. You will be able to quickly evaluate the needs of your client, and offer your services at a premium and add incredible value for them.
*One of my favorite posts on the subject of pricing your services is this article by fellow travelers Mish and Rob. They chronicle the much longer road they have traveled and offer complimentary advice on gaining experience and pricing your services accordingly.