25 replies
Greetings,

Hopefully most of you have read through my Plan of Attack thread, where I have documented the start of my offline marketing career. It's actually been going very well so far and I am REALLY enjoying myself. It's the first time I've been this happy in a really long time. Though, I now have an interesting problem that has been laid in my lap.

A potential 'whale' of a client has contacted me and would like to look into purchasing my services. This whale is a local coupon magazine that wants to establish an online presence, etc. Now the possibilities are just endless when it comes to how I should handle this potential client, etc.

My main question is pricing. I've been going with a fairly standard $599.00 pricing plan for my current clients. Am I probably undercutting myself? Yes.

Though, my original plan was to build a solid base of 6 - 7 clients at a decent price. Allow the word of mouth type advertising take off and then I would start charging more. Once people saw the quality of my work, etc. I think it would also be easier for them to write larger checks.

So, this client approached me and we're going to be meeting at the beginning of the new year. My plan is to have a nice skeleton site already built and a proposal in hand. I mean there is potential for e-mail marketing for him and all of his clients, etc. The list just goes on, and on, and on. How do I charge him?

Do I go with my standard rate and continue with my original plan? I mean, after I get his site out there and he is advertising it in the local coupon book. There will be a ton of people coming to it. Not to mention all the local businesses who will advertise with him, who will see his site and wonder who built it. This is the one I don't want to lose so I am really looking for any advice you guys can offer me. Thanks.

- TC
#landing #whale
  • Profile picture of the author SubUrbanHype
    You are in a position I was in last night. An advertising agency was interested in having me do website designs for their clients because they want to move toward more than just print advertising, I didn't really have anything planned out for this type of client just yet, and was totally unprepared. The good thing with you is that you have time to really come up with a pricing point and a perfect pitch for them. I would say don't try and really raise the price up for your sites unless you are sure they are going to pay you for it and not start shopping around because you gave em too big of a pricetag. Like you said, a lot of people are going to be going to that website and are going to be asking "who designed your site for you" and that may pay off for you big in the long run. So I believe the $599 you are charging is a good rate (around here where I am people rarely want to pay over $199 for a site). Just go over how you are going to lay it out to them and make you seem like the perfect guy for the job, you got about 2 weeks to think of a plan, and since I have seen what you did just 2 weeks ago, I am sure you are gonna knock it outta the park.

    Good luck.
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  • Profile picture of the author twoblind
    Thats a hard one Tiger

    on one hand the client has deeper pockets, but on the other hand, you don't want to overcharge them.

    I would base it on the amount of work that you would have to do to get the site up and ranked. If there is a lot more work, then I would definitely charge more. Or if you offer more services.

    It sounds like there might be a joint venture opportunity in this as well. I would keep that option open if you can.

    Best of Luck to You!
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  • Profile picture of the author James Morris
    Seems like this will require more ongoing maintenance than a standard site. That may be where you adjust your pricing because of the additional maintenance requirements.
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  • Profile picture of the author MichaelHiles
    In 1999 I sold my web dev company to a very large couponing, direct marketing publishing company for many digits.

    But I was established and doing $5+ million in sales at the time with 18 people.

    That company became the web marketing division for that company.

    The point is that maybe you can just sign a very large consulting agreement to establish a web marketing division for them as an exec with performance bonuses and even equity earn out.

    Think bigger.
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    • Profile picture of the author Tiger_Claw
      Thanks for the advice everyone. I am already looking into a variety of ways I can help them.

      Originally Posted by MichaelHiles View Post

      In 1999 I sold my web dev company to a very large couponing, direct marketing publishing company for many digits.

      But I was established and doing $5+ million in sales at the time with 18 people.

      That company became the web marketing division for that company.

      The point is that maybe you can just sign a very large consulting agreement to establish a web marketing division for them as an exec with performance bonuses and even equity earn out.

      Think bigger.
      That's great advice Michael. Though, this is for a mid-sized town type coupon company. I'm not too certain they're interested in forming a web marketing division just yet. Though, I will certainly offer my services to them and see where that goes.
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      • Profile picture of the author MichaelHiles
        Originally Posted by Tiger_Claw View Post

        Thanks for the advice everyone. I am already looking into a variety of ways I can help them.



        That's great advice Michael. Though, this is for a mid-sized town type coupon company. I'm not too certain they're interested in forming a web marketing division just yet. Though, I will certainly offer my services to them and see where that goes.
        Well I understand.

        Here's the risk of not going for the gusto from the beginning... they experiment with you and your services. Then figure out what they want to do with their customers, and then get into the business as a competitor.

        No sense in training your competition, especially in as small of a market as you say.

        That's just my .02 cents worth though... thinking as a businessperson.
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        • Profile picture of the author Tiger_Claw
          Originally Posted by MichaelHiles View Post

          Well I understand.

          Here's the risk of not going for the gusto from the beginning... they experiment with you and your services. Then figure out what they want to do with their customers, and then get into the business as a competitor.

          No sense in training your competition, especially in as small of a market as you say.

          That's just my .02 cents worth though... thinking as a businessperson.
          That's an excellent point. I got a couple of weeks to really write out my plan of attack on how I approach him. I'll let you guys know. I really have no interest in training a potential competitor.
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        • Profile picture of the author Digital Traffic
          Yep, just spent 5 hours of my time trying to woo a company of size myself.

          After spending 30 plus hours of research before my 5 hour meeting that was supposed to be only a 2 hour introductory meeting, I have found that the company is now hard at work implementing the exact game plan I had proposed to them.

          In fact, I handed them the game plan in a step by step presentation.

          My bad.

          Live and learn.



          Originally Posted by MichaelHiles View Post

          Well I understand.

          Here's the risk of not going for the gusto from the beginning... they experiment with you and your services. Then figure out what they want to do with their customers, and then get into the business as a competitor.

          No sense in training your competition, especially in as small of a market as you say.

          That's just my .02 cents worth though... thinking as a businessperson.
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          • Profile picture of the author SubUrbanHype
            Originally Posted by Digital Traffic View Post

            Yep, just spent 5 hours of my time trying to woo a company of size myself.

            After spending 30 plus hours of research before my 5 hour meeting that was supposed to be only a 2 hour introductory meeting, I have found that the company is now hard at work implementing the exact game plan I had proposed to them.

            In fact, I handed them the game plan in a step by step presentation.

            My bad.

            Live and learn.
            EXACTLY what happened to me, and after I realized what was going on it was too late. I learned a lesson about not giving out TOO much information about what you are doing. So yeah, you live and you learn.
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            • Profile picture of the author The Kid
              If there's one thing I learned from AP in that massive thread Dexx started, is that you tell them WHAT you're going to do for them (increase in-store sales, conversion on their website, etc.)... not HOW.

              The how is your secret sauce, the key to why they have to hire you and not someone else.

              And by how I mean a step by step blueprint.

              Ex. Me: I'll help increase your online sales.
              Client: How?
              Me: Oh, I'll be utilizing PPC and a mixture of traffic generating campaigns as well as tweaking your site to handle the increase in visitors.

              Not: Oh, 1st I'll do a PPC campaign for XYZ, then... then... and then I'll add an Opt-In form on your website, and do away with... and... and... you get the point. lol
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  • Profile picture of the author MichaelHiles
    I just try to think through all the scenarios. Why would a large company want to hire out this kind of thing?

    1. to test a new product/service?
    2. to satisfy the requests from their existing customer base?
    3. to dabble?

    That's when I start asking the real serious questions... why me? What am I bringing to the table for them that would make them want to hire me to do this stuff vs. someone else or hire it in-house? Whales like to swallow little fish.

    But... the bigger concept is... little companies feed big ones... most of the time at a substantial profit for the owner/founder of the smaller company.

    You can always sell them services as a fallback position, but I would seriously just go for the gusto and offer to build a partnership as their local online marketing executive. Build it for them, take a cut. Who knows where that will get you.

    I know where it got me.
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  • Profile picture of the author StephanieMojica
    A rule of thumb I was taught by Christian Mickelsen (a seven-figure coach) is to ask for more than you're comfortable with. I started doing that and attracted more money and clients. So, if you have a handful of clients at $599, then ask the next two or three for $799, then the next few $999, and keep bumping it up accordingly.

    Good luck!

    Stephanie
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  • Profile picture of the author Vincenzo Oliva
    That's why I recommend never advertising your rates before consulting with the customer and having them answer a questionnaire. Find out the size and scope of their business and their needs. Never disclose your price before you've had a chance to sell the benefits. Once they're attached to the benefits you can name your price.
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  • Profile picture of the author redcell1
    Originally Posted by Tiger_Claw View Post

    Greetings,

    Hopefully most of you have read through my Plan of Attack thread, where I have documented the start of my offline marketing career. It's actually been going very well so far and I am REALLY enjoying myself. It's the first time I've been this happy in a really long time. Though, I now have an interesting problem that has been laid in my lap.

    A potential 'whale' of a client has contacted me and would like to look into purchasing my services. This whale is a local coupon magazine that wants to establish an online presence, etc. Now the possibilities are just endless when it comes to how I should handle this potential client, etc.

    My main question is pricing. I've been going with a fairly standard $599.00 pricing plan for my current clients. Am I probably undercutting myself? Yes.

    Though, my original plan was to build a solid base of 6 - 7 clients at a decent price. Allow the word of mouth type advertising take off and then I would start charging more. Once people saw the quality of my work, etc. I think it would also be easier for them to write larger checks.

    So, this client approached me and we're going to be meeting at the beginning of the new year. My plan is to have a nice skeleton site already built and a proposal in hand. I mean there is potential for e-mail marketing for him and all of his clients, etc. The list just goes on, and on, and on. How do I charge him?

    Do I go with my standard rate and continue with my original plan? I mean, after I get his site out there and he is advertising it in the local coupon book. There will be a ton of people coming to it. Not to mention all the local businesses who will advertise with him, who will see his site and wonder who built it. This is the one I don't want to lose so I am really looking for any advice you guys can offer me. Thanks.

    - TC
    3 ideas come to me from this.

    1.) Charge your base rate of $599 and talk to them about having an advertising spot or something along those lines on the website for free.

    2.) Charge more because it's worth more time and include a logo or backlink to your site.

    3.) It's the same as #2 but go after the clients who are advertising in the coupon magazine.
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    Just here to see the shenanigans.

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  • Profile picture of the author Voasi
    You have to be able to read your potential customer and see what they're going to do with the information given.

    We have an approach where we educate our potential clients on what their competitors are doing, how much their spending and what its going to take to really be a player. After a presentation like that, they realize they don't know as much as we do and want to work with us. We've beat out major SEO companies because of our presentation and "educating" the client.

    Having said that, there have been times where the potential client took our information and tried to do it themselves. That's fine - it happens. All our knowledge can be found, on some level, online if they go through enough forums and ask enough questions. But who really wants to do that?

    If you position yourself as the expert and that you're knowledge base is massive and to understand and implement what you know would be such a daunting and horrific task... they'll want to go with you.

    As for your specific situation - here's how I've played this:

    1. Turn this guy into an affiliate: Just give them a kickback for every person that he brings your way
    2. You can just give him a price for your services and he can put his own price tag on it and make the difference
    3. Give him a discount on his services with you as he brings on more clients, or offer additional services to him as he sends the clients your way

    You should stick to your guns and our pricing. If you charge $599, then keep it. If you're thinking of bumping up your rates, then do it - but stick to what you want to make. If he's going to bring on more clients for you, there will be plenty of opportunity to raise your rates as demand grows.
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    • Profile picture of the author Tiger_Claw
      Have I ever mentioned how I do enjoy these forums? Such a wealth of information, thank you for all the great advice.

      I am in a unique situation with this client. I'm not too certain how many employees he has, but I'd say it's in the 4 - 5 range if even that. He is also not very computer literate (told me this on the phone). So, he'll be needing quite a few new website services.

      After I show him a skelton site that I will build, I will explain a few different things we can do in regards to marketing for him and his retail clients. I think in the end the way I angle it, he'll see the benefit of setting up some sort of consulting practice with him.
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      • Profile picture of the author torjak
        well if you are just precise on the things you can do then it should be hitting the bulls eye. But before you can have it going easily the right and necessary information's you gather would really matter.
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        • Profile picture of the author Amber Jalink
          Originally Posted by Digital Traffic View Post

          Yep, just spent 5 hours of my time trying to woo a company of size myself.

          After spending 30 plus hours of research before my 5 hour meeting that was supposed to be only a 2 hour introductory meeting, I have found that the company is now hard at work implementing the exact game plan I had proposed to them.

          In fact, I handed them the game plan in a step by step presentation.

          My bad.

          Live and learn.
          Originally Posted by SubUrbanHype View Post

          EXACTLY what happened to me, and after I realized what was going on it was too late. I learned a lesson about not giving out TOO much information about what you are doing. So yeah, you live and you learn.

          I was asked to do a presentation in November that I was concerned might turn out this way... (An associate recommended me to them).

          So right up front I bluntly said, "Is this a paid consultation, where I give the info, or is this a sales pitch/presentation where you might want my services?"

          I was about to do it as giving the info and thinking they might hire me, but then realized - this exact thing could happen - so why should I give it out for free, when my time is involved both in research and in presentation, only to possibly have them "hire" someone else or do it themselves?

          Their answer: Do it as a paid consultation for starters.

          I charged an hourly rate for "most" of the time (I actually worked a few hours more than I billed them for, but I was okay with that).

          Did a full powerpoint presentation on what they "have" done, and what they're totally missing (a lot, and I didn't even go into everything)... but it was enough that they were even without being overly technical, a little overwhelmed by all that they needed.

          At the end, they thanked me for it, and the boss was a little hesitant about all the work still involved, then asked if there was someone who could do this all?

          My associate piped up before I could even speak and said, "Amber does this!" (Gotta love him LOL).

          So they asked me to give them a quote for services - I gave them three options in a formal letter... he thought about it, asked questions, and then they asked me to come in to "sign the deal" another week later.

          Did so. And when I was there, he LIKED that I had given him three options, from the "budget" to the highest level - it allowed them to choose what fit with THEIR budgets at the time. (They chose the mid range, but told me to tell them when we've completed that and they're ready to move to the highest one).

          So - in my opinion/experience - don't give "TMI" (Too much information) at a free presentation.

          As my husband always says when people ask him to SHOW or EXPLAIN how to fix a computer issue (that is typically above their heads), he basically reminds them that this is what he trained for... he can fix it for them for $50 an hour, OR he can teach them how to do it for $150 an hour.

          Why? Because then THEY have the knowledge to do it themselves, and he's out of that work.

          So just like this case - this was my knowledge - and its YOUR knowledge.

          Don't just give it away free.

          I suggest maybe giving ONE tidbit they could do free, because it gives some valuable info for them, and they see that you are legitimate.

          To the OP: Perhaps you could give them a 3 option/choice? i.e., start at $599, list what you would do for that... then give them two higher choices.

          See, the problem is - if you go 'too low' (as you're wondering), that company might even see it as a "too low how can he be good" OR.... that they'll think they can take advantage of you and have you work for much longer than that (but since its a quote, you have to work within that).

          Give 2-3 levels of choice.

          I can't remember who said it - but it was totally recommended to give 3 choices, not extremely hugely different in cost, but so that they actually make the mid-top level ones a no-brainer.

          Hope this helps.

          Amber
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          • Profile picture of the author James Morris
            Originally Posted by dimeco View Post

            Give 2-3 levels of choice.

            I can't remember who said it - but it was totally recommended to give 3 choices, not extremely hugely different in cost, but so that they actually make the mid-top level ones a no-brainer.

            Hope this helps.

            Amber
            It's been my experience that when given 2 choices, most go with the lesser choice but when given 3 choices, most people will go with the middle one.
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  • Profile picture of the author rrram2
    a great man once said, there are only two reasons anyone (prospect) does anything (buy):

    1. to gain a benefit (as has been pointed out)
    2. to avoid a loss (we overlooked this one buy it is a powerful motivator)
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  • Profile picture of the author Summertime Dress
    personally, I would set up an initial free interview to find out specifically what their needs are...then tell them you can present to them your plan/ideas after payment of a non-refundable deposit -- applied toward the project should they decide to move forward. If their not willing to pay for your time, I'd be curious what they want with a small fish, too.
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  • Profile picture of the author Summertime Dress
    p.s. this is how high-end lanscape companies do their quotes...initial free consult...charge $500 for landscape plans...applied toward the job. That way they get paid either way.
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  • Profile picture of the author Amir Luis
    Note to self... revisit this thread in the morning. It is late but I have soooo much I want to say...
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  • Profile picture of the author beckyjjackso
    like a land whale, unattractive sometimes and pretty low. How where you at this stage?
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  • Profile picture of the author sandalwood
    Tiger,

    I think MichaelHiles gave you some great advice. As an offline biz owner wanting to increase my marketing effort, I'd probably entertain your proposition. Why? Cuz you relieved me of one hell of a headache.

    sandalwood
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