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Don't think people will pay good money for our services?

by Aaron Doud
13 replies
State Department bureau spends 630K dollars on Facebook likes

$630k for a Facebook like campaign! Wrap your head around that and realize most of what we are offering is way too cheap.

Raise your prices! You are leaving money on the table by using your pricing and not your clients. To you $500 may seem like a lot. To me that isn't even one car payment. To a business owner that might be half their phone bill or for a restaurant maybe 1/10 of their gas bill.

Money is relative. If you have never had big bills you think you are high. But to the people you are selling you seem cheap, often too cheap.

Talk to a friend who is a business owner or manager and see if they will talk bills and P&L with you. Once you see those numbers you will change your outlook.
#good #money #pay #people #services
  • Profile picture of the author digichik
    I have always found it easier for me to sell a high ticket service that a low ticket one. I have to ask for the money either way, I just find it easier to ask for more money.
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  • Profile picture of the author socialentry
    Why would the state department need facebook likes???

    roflmao. How typical.

    Many bureaucrats have the mentality of "we better spend the money in the budget or else its going to go to the Navy".
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    • Profile picture of the author midasman09
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      There are NOW...22 MILYUN employees of our US Gummit....some of them have GOT to find ways to "limit" your freedoms!

      Get ready for more!

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    • Profile picture of the author Aaron Doud
      Originally Posted by socialentry View Post

      Many bureaucrats have the mentality of "we better spend the money in the budget or else its going to go to the Navy".
      This is true. Also happens in the corporate world. It's the reason I am not a fan of budgets.

      Two things happen with budgets. They get spent because they feel they have to spend it all. Or in the case of advertising they find something that works really well but don't do it more because "it's not in the budget".
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  • Profile picture of the author Jason Kanigan
    The main reason why people set their prices too low is that they are stuck in the cost-plus or trading hours for dollars mentality.

    Think instead of the value of what you offer. What does your customer get as a result of your solution? What's that worth?

    Use this as a qualifying tool. Is the project big enough? Does it command a price large enough to be worth your attention?
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    • Profile picture of the author payoman
      Originally Posted by Jason Kanigan View Post

      The main reason why people set their prices too low is that they are stuck in the cost-plus or trading hours for dollars mentality.

      Think instead of the value of what you offer. What does your customer get as a result of your solution? What's that worth?

      Use this as a qualifying tool. Is the project big enough? Does it command a price large enough to be worth your attention?
      Don't mean to hijack the thread, but Jason, any tips on how to overcome potential clients who just CANNOT wrap their head around this?

      I mean, I ask people "what sort of money do you make per job/widget" to give them a rough estimate of what an increase of website traffic would do, but its almost as if they ignore the question and continue to say "its still expensive/its still about the money".

      Even if you say "x amount more traffic would bring y more sales, therefore this would ALWAYS be profitable", they turn around and say "but its still $200/$400 etc per month".

      Are these just the type of clients you want to avoid, or am I just not doing a good enough job hammering it into their heads?
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      • Profile picture of the author Jason Kanigan
        Originally Posted by payoman View Post

        Don't mean to hijack the thread, but Jason, any tips on how to overcome potential clients who just CANNOT wrap their head around this?

        I mean, I ask people "what sort of money do you make per job/widget" to give them a rough estimate of what an increase of website traffic would do, but its almost as if they ignore the question and continue to say "its still expensive/its still about the money".

        Even if you say "x amount more traffic would bring y more sales, therefore this would ALWAYS be profitable", they turn around and say "but its still $200/$400 etc per month".

        Are these just the type of clients you want to avoid, or am I just not doing a good enough job hammering it into their heads?
        "So I'm getting the impression that you don't really believe this will work."

        "Are you saying that paying $200 a month on a print advertisement--and they're usually a lot more than that, aren't they--that brings you $5000 is too expensive?"

        "Then what's the difference here?"

        There's a weakness in the value equation for the prospect. It's in their head. You really don't know what it is until you ask, and if they're honest with you. Yes, it could be time to qualify this one out. If someone just doesn't see the value in what I'm offering, I'm not going to waste time trying to force them into agreeing with me.
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  • Profile picture of the author AndrewCavanagh
    This is a good topic.

    If you think of each employee in a business costing the owner
    $500 a week or more you get a pretty quick idea of how much
    money they're having to cover each week just in payroll.

    eg 10 employees=$5,000/week.

    Then if it's a retail business they'll be paying at least that each
    week in stock.

    Then there's rent and more.

    And you're offering them a solution that can make them thousands
    of dollars of extra profits in a month and offering to do it for $500!

    As Aaron says...most of us need to charge more.

    Kindest regards,
    Andrew Cavanagh
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  • Profile picture of the author Jason_V
    Aaron,

    You're usually right on the money and I always find myself nodding my head every time I read all of your posts.

    However, in this case, you're off the mark a little.

    While I agree people should always try to obtain maximum dollars for the freelance work they do, the example you give for doing so is what's off the mark.

    There's a difference between a group of bureaucrats sitting around and thinking about how they can best waste, I mean, spend tax dollars, as opposed to a small business or for profit corporation. People in government seem to always be under the delusion that money is an infinite resource. Whereas business owners know money is a very real and tangible finite resource. Remember, these are the same idiots who buy $20+ hammers. Also the same morons who fund studies about shrimps on treadmills (I really wish I was joking, and you probably will too.)

    U.S. Government Has Spent $682,570 to Study 'Shrimp On A Treadmill' | CNS News

    It's true, business owners do spend crazy amounts of money, but unlike the government they don't spend crazy amounts of money in nearly as wasteful a manner.

    The key is finding owners who understand that so long as you can deliver on your promises that what you provide to them are assets and not expenses.

    There is another take away to your post, with the example you gave, besides the "Wrap your head around that and realize most of what we are offering is way too cheap." point, which is: If you can, try to get government contracts for your goods or services. However, I've known people who have received government contracts for physical goods. The time, effort, and bureaucratic hoops you have to jump through border on the insane. However, if you get a government contract, they are extremely lucrative.
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    • Profile picture of the author Aaron Doud
      Originally Posted by Jason_V View Post

      Aaron,

      You're usually right on the money and I always find myself nodding my head every time I read all of your posts.

      However, in this case, you're off the mark a little.

      While I agree people should always try to obtain maximum dollars for the freelance work they do, the example you give for doing so is what's off the mark.

      There's a difference between a group of bureaucrats sitting around and thinking about how they can best waste, I mean, spend tax dollars, as opposed to a small business or for profit corporation. People in government seem to always be under the delusion that money is an infinite resource. Whereas business owners know money is a very real and tangible finite resource. Remember, these are the same idiots who buy $20+ hammers. Also the same morons who fund studies about shrimps on treadmills (I really wish I was joking, and you probably will too.)

      U.S. Government Has Spent $682,570 to Study 'Shrimp On A Treadmill' | CNS News

      It's true, business owners do spend crazy amounts of money, but unlike the government they don't spend crazy amounts of money in nearly as wasteful a manner.

      The key is finding owners who understand that so long as you can deliver on your promises that what you provide to them are assets and not expenses.

      There is another take away to your post, with the example you gave, besides the "Wrap your head around that and realize most of what we are offering is way too cheap." point, which is: If you can, try to get government contracts for your goods or services. However, I've known people who have received government contracts for physical goods. The time, effort, and bureaucratic hoops you have to jump through border on the insane. However, if you get a government contract, they are extremely lucrative.
      The link was to shock people. To help them see that prices are relative. Most of us including large corporations would be shocked at spending that kind of money on Facebook likes.

      The point was to get people to realize they can charge more because business owners and managers will think of money differently. I used $500 as an example in my post. To many here just starting out that would see like a lot. And that doesn't even cover my car payment or many bills in a business. People need to think bigger.

      In no way shape or form was I actively promoting getting a government contract. Personally from both a business stand point (too many hoops as you said) and a political stand point (I'm libertarian so big government bad) I would never deal with the government as a client.

      What I wanted people to wrap their head around was the price. It was insane to most anyone. But if you stop and think, and as the rest of my post talked about, maybe prices that you (consultants here) think are insane really are not to the clients.

      People will pay if they see the value. But that doesn't mean buying a gig on fiverr and reselling it for $1,000. Which seems to be how the opposite group here thinks.

      But if you provide real value at a fair price they will buy. Too cheap and you have issues and too expensive and you can't land certain clients (may be good or bad depending on how many you land).

      How offliners can get to the right price varies. Jason believes in pricing based on the value you bring to the table for the client. What I call variable pricing. It is one of the few things I disagree with Jason on. I feel you should have pricing based on your personal value. Rather the client can afford you or not is their issue and those who can't you move on from. How you set that personal value I have spoken on multiple times in the past.

      But the key is whichever way you choose to go that you price your services high enough to be seen as valuable and high enough for you to build a real business. Realistically if you are not charging at least $50-$100/hr of active client work you are charging way too little. And at a certain point you may even be making less than minimum wage.
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  • Profile picture of the author eClicker
    Depends on the client. I have been sitting down with a restaurant owner and laid out what I was going to do for him(just enough anyway) . It was a win win situation and he still walked away from it.

    Yet I am sure there are business owners out there that realize social media is where the money is and are willing to pay for it.
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    • Profile picture of the author Aaron Doud
      Originally Posted by eClicker View Post

      Depends on the client. I have been sitting down with a restaurant owner and laid out what I was going to do for him(just enough anyway) . It was a win win situation and he still walked away from it.

      Yet I am sure there are business owners out there that realize social media is where the money is and are willing to pay for it.
      How did you present it. Like SMS deals I see social media for a restaurant as a way to engage with and increase how often their customers stop in. It's not about new customers but maximizing current ones.

      Turning that once a month diner into a once a month diner.
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  • Profile picture of the author Richard Tunnah
    I think the key is to target companies/businesses that are spending large amounts on advertising and/or have high turnovers (like 7 figures) then you can price your services at a higher price point and still offer a great return on investment for the client. It also helps as you know they are likely to have the budget for your services it's just about presenting your proposal right.

    Ps. I too have found it better to sell at higher price points than at the bottom as clients seem to stall or want to change the terms suddenly.
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