FULL ON AGREE.

People are always undervaluing their expertise.

Live by price, die by price.

Be a commodity, and you'll be treated like one.


There are people making $99 websites, and people making $9,000 websites and people making $90,000 websites (yes, there are). What's the diff?

Positioning and perception.

"Oh they must have a lot more experience, expertise and references than I do."

Nope.

They merely position themselves as top-flight experts...and they get treated like it.

Do you think your prospect has a clue how much difference in knowledge there is between the $99 site designer and the $9,000 one? IS there a difference?

Probably not. Probably not.


You can bust your butt trying to serve 100 clients at $99 to make your $10K, or you can get 5 clients at $2,000. And you'll do a much better job for those 5 clients, let me tell ya. You'll be treated better, they'll mess with your designs a lot less, and your self-esteem will thank you.

Your efforts are bringing in a steady stream of qualified inbound leads for your clients. How much are those income streams worth? A LOT more than a piddly $99.

Get out there and act like your an expert. It constantly appalls me how much more I seem to know about web design, fan pages and other crap than the so-called experts...and I don't even DO those things. YOU profess to be the expert. ACT LIKE IT. CHARGE LIKE IT.

Uggghh. I whore'd myself out this month. I admit it.

Guy calls me after finding me online (a little local SEO for myself). The guy has a 1 page vistaprint site and wants SEO done. We talked and talked - must have had 3-4 phone calls and a 2 hour face to face meeting. I sold him a new website (1250) and a local SEO package at 360/month. My usual prices would be 2250-2850 for the website and 500 startup/400/month for local SEO program.

He beat me up on price and I didn't hold my ground.

Worse - he already seems like he'll be a demanding customer.

A few weeks ago I talked to my wife about this prospect... I was saying "I shouldn't take this job." Uggghhh... tough being self employed. Tough to walk away.

Maybe he'll turn out okay, but I still feel like a cheap hooker.

I 100% agree, people think lower prices makes it easier to get client.

Realizing (the hard way) that its not the case, in the end only a few of the bunch are even interested in what you offer. No use selling them $300 when it can be much more.

In a potential clients mind their is a psychological connection between "Price" and "Value"

Because of this the lower the cost, the lower the perceived value.

Enter the axiom "You get what you pay for"

There is a tipping point in terms of when does "Price" no longer support a realistically perceived "Value"

Fortunately Customers don't buy based entirely on "Price", if they did we would all be screwed!

It is up to us, as Professional Marketers, to establish a perceived "Value" with our Prospects that justifies the "Price" we charge our paying customers.

Only when we accomplish this do we convert our Prospects into Paying Clients...

$6500 and no contract in place protecting you from something like a chargeback? I don't take money til they sign the dotted line that binds us to working together.

Change your mind? F*ck you, pay me.

Someone else has a better offer on the table? F*ck you, pay me.

Don't want to pay up? That's ok, I won't lose sleep over it because I paid my lawyer to build the iron clad contract you signed, and he'll be contacting you before the day is over.





**** you, Pay me - a discussion of adventures in contracts, negotiation, and payment | dvafoto


Good stuff.

I'd still fight the charge back.

What "reason" did he give the CC company. Also was this a business or personal account? And is he local to you?

If he is local to you I would get on craigslist and hire some $10 a day protesters to picket him. That kind of behavior is unethical.

Also the CC company doesn't want to deal with fake chargebacks. Fight this. He is abusing the process and it hurts your rating with your processor.

so this cheapo guy is nicking your input and ideas too. O well, watch them both crash and burn , maybe work with his main competitor and destroy him (for the right $$$), else move on and dont use up any energy on the negatives

Bump.

Truly the perfect offline business model is a directory site. It incorporates everything offline marketing is about, it is consistently effective for the customer, it is the least responsibility and the most money.

Also The best chance for upsell. to customers with no website, google places...

For example:

If you can close two people per day at a flat $97 per month, first month free, cancel at anytime...then you have a $500k per year residual income built within 12 months. It doesnt matter if one falls off here and there.

You also have an opportunity to survey these customers and upsell them other services offering package deals... But for now, lets just look at the $97 per month:

If you could simply sell one per day, 20 days per month at $97 (an easy close), then you would build a quarter of a million dollar residual revenue stream within 12 months, and be replacing ten customers for every one who falls out perpetually.



Lets say that two days per week you dont sell at all, but on another two days you get two $97 sales instead of just one... It works out the same.wrong, its still a great result.

"Expectations Management" is the key. Lowball things so low that if they go insanely "not according to plan"... the projections still work and come out lucrative.

Here is what one measly $97.00 sale per daymeans:

20 sales per month = $1940. per month residual built.

x 12 months = $23,240 per month residual income - around 120 customers...

= $278,000 per year residual income, and you are still selling and creating more.

This is really the perfect business model.

I would rather have that than a handful of $6k per year customers. Makes 6k seem kinda cheap really.

Yuck. I hate that.

People are constantly calling/emailing my clients with low ball offers. It's so annoying. That being said, I use the same tactics that were discussed earlier (1/4 the value). With new clients, it's harder to do (no relationship, like you said).

Also, you may want to talk to your guy about how the payments are handled. I stopped accepted credit card payments from new customers for this exact reason (very similar situation).

All in all, I've been there and I feel you. The only comfort I've found is that these types of "lowballers" generally don't stay in business very long.

What a wasted post I made here today... really.... Deserves a thread of its own.

I think people may be missing that the $300 guy has seemingly been 'told' all or most of Kens ideas by the 'client' so the $300 maybe doesnt even know jack**** but will just steal Kens ideas that he'd already talked through and agreed with the 'client' . IP rights and morales dont mean a thing (maybe they been watching Dallas re runs)

The client is a two faced ass for spilling the ideas , the $300 guy is 'possibly' a bit of a con job not up to scratch but happy to steal ideas and run with them.

Having said that, wouldnt waste any energy on either of them , plenty of proper decent genuine business people out there who wont crap on someone first chance they get .

Or, theres always reverse reputation management ;-) if you do want to waste energy

but if you act like a 1000$ whore, you are still a whore kidding aside, I agree whith you

Hey Ken,

Here's something to consider. Whatever you were providing in terms of services could be broken up.

Start with something to gain credibility and trust and continue provide additional services over time that would far exceed the $6500 one time hit.

I don't know how you offer your services or the history you have with this client.

Even if they are a current customer, you might want to look at how you are escalating them through your product offerings. For instance, going $150 to $6500 might make a regular customer fell uneasy.

Maybe having the contracts with penalty clauses, paying up some or all the money upfront along with instilling trusting value in the mind of the client will prevent this from happening again.

This is one you may need to let go of. If they don't receive the value from the lower price provider, they may come back to you in the future.

John Durham and ShayRockhold provided great posts above.

Much success!

Should be,
"and since I failed at educating him about the hacks out there that don't have a real business set up and charge next to nothing for any project and find out its more work then they expected for a measly $300 bucks then end up not doing much of anything but continue to take your $300 bucks until you wise up and cancel."

Ken, with all due respect isn't that a little more accurate?

PS: Oh yeah and did you fail to mention that you are constantly getting new clients requested to fix the crappy coding and screw ups from the $300 a month guy?

I am a 2 Dollar whore...

I recently got into Internet Marketing and a lot of what I do is working from templates or outsourcing. I started work with two clients... one doing Social Media and the other SEO. I charged a reasonable $1000 for a two month backlinking campaign with the one business who has a lot of onsite SEO and good history.

The other client I charged $400 for Social Media overhaul and one month of coaching to help them get more engagement..... MISTAKE!!!

The $400 client is an acquaintance is setting up weekly 2 hour meetings where we accomplish next to nothing while the $1,000 client is happy as can be and hasn't even asked a couple weeks in if there are any changes to the rankings.

I know this might not be on par with what you guys charge or what have you... keep in mind I am very new to this...

but I am realizing very quickly based on my first two clients....

$1,000 client - Very easy to Deal with not a ton of work/headaches/gouging
$400 client - Pain in the butt/headache/constantly trying to get more for free

John, if you're serious about directory sites, I'll partner with you and build you as many as you want with all the bells and whistles. I'll handle all the techy stuff. You simply fill them up and we'll both profit.



PM me or email me if you want to discuss this further. I've gone down the directory site route in the past and my stumbling block was getting "asses in the seats". I spent 5 years as a financial advisor doing cold calls and came out completely shell shocked. I know it works, I know it's a numbers game but I can't lift up the phone anymore personally to do it. I totally respect anyone who can as they've got skills I don't anymore.

Getting back to the OP and on topic. It does stink to have this happen, no doubt about it. But you've got to examine why and how to avoid it in the future. Possibly educating your new client on what to expect. Use this situation as a "story" to tell them about how you got undercut and how you felt about it. Tell the future clients that you felt sorry for the person as they just went from driving a Bentley to driving a Pinto.

Ken another thought that other have brought up as well.

Why was yours worth $6,500? What were you doing that made it a premium product? I will tell you right now our website didn't cost $6,500 but if we didn't use a service for the backend a custom coding of what we want done would have been at least $5k if not $10k. But the company we went with deals with our industry and can do it all for Less than $500 a month. In fact these guys are lower than the last company that we worked with(before I came on board) and does more. More for less always rocks.

The key with a $6,500 sale is they have to understand the value. Might even want to offer $300 solutions so you can sell against yourself in proxy for the low ballers. There are all sorts of sales tractics you can use to solidly lock in a client.

On another note why didn't you just refund this guy back or did he never ask for a refund?

Also to John I agree I with your idea I never want to be the cheapest in the market nor do I want to be selling expensive stuff. Expensive requires work and you can't afford to lose them. if everyone is paying a relatively low and fair price you get enough customers that you can "fire" the PITA ones.

In my business I would rather sell 30 travel trailers vs one motorhome. In the end the 30 take me less time often and pay me more. Plus I now have 30 people to send more customers our way. And since RVs have a 3 to 5 year buying cycle it pays to have more customers coming in as i can't expect the one I sold back for years.

I think in business as a whole too many people try to hit home runs. They never notice that base hits get more runs and take less time.

I will bet when ebay empowered buyers by letting them have a say in what was worth what to them, , that alot of companies thought it wouldnt have an impact, but now every pawn shop in America rates all of their buys and sells off what the ebay market says it will pay. It has changed the way we buy and sell tremendously.

When a business owner is paying you thousands of dollars per month for the same ROI someone else gets at $97 in a directory ... Then of course he is going to wonder...Also its easier...they dont have to headaceh with meeting you over design plans, and meetings, involving their staff... They just want to pay the $97, tell you the basics, let you write the copy (most of the time) and forget it, and hopefully your listing is good... if not, they let it go for three more months because its only $97., and things could pick up anytime in the first year...

70- 80% dont cancel at all EVER, and 90% never call you back even once after the sale. Most will continue for years based on the "chance" that the site may start ranking... because at 97 its worth a chance.

I like that.

I think most small business owners prefer to deal with people who arent making big parades, or requiring alot of energy, let alone finances. Some buy ONLY because you are high priced, its true...but they are "generally" the exception, not the rule.

I promise hannah montana sells more ten dollar pink plastic purses than versace sells $10,000 boutique ones People who can spend 10k on a purse happen, but they are few and far between..

Good point. Note taken.

@ Shay. I think so too. I just try to speak plain so they dont have to scratch their head.

I make these mistakes alot with writing (typo's, errors...long sentences), but everytime a person gets "hung up" on something you said they dont move forward in the conversation with you until they get past it... So being easy to assimilate is better than being impressive but hard to understand.

You want your customer to be able to keep up with you and following you in real time, or else your presentation is ineffective.

Alot of folks are just repeating info they heard here on the WF and are WAAAAAAAAY out of touch with how biz owners talk offline.

Apparently I'm still not charging enough because I just lost a proposal I submitted that was for a custom WP designed theme, custom facebook fan page and a mobile site. All of which as we know isn't that hard to do.

My bid? Exactly $6500 for design and only deployment, it didn't include content creation and seo.

Who did I loose it too?

Another company who bid MORE!

Nothing more to say, I'm raising my prices even more now.

interesting thread, ive set up a web design agency, and my own brother told me I was really underpricing myself...i've also started to notice a pattern with some clients adding to specifications after a price is agreed upon, and since I don't take deposits, I've had to respectfully decline alot of projects I was working on after el cheapo clients tried to pile on features that weren't in the original plan. ..so dont lose out on the moolah cash-wise, but time-wise, I'm taking a pounding.

as a benchmark, can some warriors tell me how much they would charge clients for this store - ekbeauty dot co dot uk , i cant post links yet because I have less than 15 posts or whatever.

I think my pricing structure is doing me more harm than good. ...im a coder, not a businessman, so my good intentions with reasonable prices may be coming across as too cheap with clients, making them think twice, or think my deals are too good to be true?

Any ideas?

Man, Tom, you are concise and full of goodness... You communicate so clearly. Love that style, you share it in common with Paul Myers.

What an awsome post. Yeah I got hit awhile back...and the next week, I had MORE than 10, literally, Attorneys pumping my mailbox full of better prices than the next guy. Im sure they dont do this for no reason.

In fact, DM can appreciate this; It seems that "law" offices, are increasingly becoming more like Sales offices. They spend more energy upselling and trying to get new clients than servicing the ones they have it seems and actually practicing "law".

Tom. this is off the subject, but you should really have a link to your agency in your sig... I know thats not your bag but, with all the great advice you dispel around here it seems like alot of us would want to get Insurance from you.

If you had a site up I would be taking my son in law to it right now to get an auto quote. I have often thought that if I were an agent I could specialize in individual health for homeworkers and probably help alot of people in forums like this. It may just nix the whole need for other advertising. I may be wrong but it seems like it would generate prospects every single day.

Off the subject again, but when people are interested in your posts, they DO click your link. It seems like you may be leaving some Biz on the table... of course there is always the risk of being called a whore for advertising something you are good at. Lol.

With your sense of professional ethics that I have come to know over the last year or two, you could probably really help people. Especially home workers with limited options...

Do you know that Insurance is one of the main reasons alot of people stay at their job even though they make enough money to live otherwise?

Just food for thought, not to cheapen the perception of the valuable things you are sharing. I know thats not your bag again, but it should be one of them IMO.

[DELETED]

Darn, out of thanks for the day. Thanks though.

Im still wondering if someone would pay you $1,000 to act like a 2.00 hooker. You know like role playing? All the benefits of feeling cheap and dirty but not actually "getting" that way?

Maybe a niche? Is that Hooker a USP?

@ Shay, prob will do that tomorrow. I have posted my tail off today... lol Thanks for the reminder. Its a good topic.

Some people choose to dine at fine restaurants paying £100 + for the experience, others will look at the menu prices, gasp and go choose a BOGOF deal and only dine out then .

Both eateries make profits ,both have regular clientelle, the point is, the fine dining restaurant knows who its targets are, they know there are people out there happy to pay £100+ for a meal experience, and these people are well aware they are paying the high end prices, they know they can get a meal for £5 , but they choose to spend the £100+ .
So if you charge $6k+ , you have to find the businesses that know they can get it for less than £1k but understand why its worth paying you the $6k + , just like the fine diners, these people are out there . But if you hook a BOGOF deals level of business , charge them $6k + and then they discover they can get it for < $1k , dont be surprised when they get up and leave before you've delivered the starter

For those of you who insist on selling your expertise for an hourly rate that ignores the specialized knowlege value backing it up, I give you this.

There was a company who was getting a boiler installed on a ship. They could not get it to fit properly, no matter how hard they tried. The fitting simply would not go together. An old timer sat, watching their troubles with a smile on his face.

Eventually, one of the supervisors noticed him, and asked him what he found so amusing. He said that they had a full crew trying to install the boiler, yet after half a day's work, they could not not manage to get it to fit together correctly.

The boss asked him if he thought he coul do better. He said yes, tat for$10,000, he would be happy to put it together for them. The man in charge reflected on the labor they'd already wasted up to that point, employing a full crew of men for half a day with nothing to show for it, and agreed to the old timer's terms.

He walked up to the boiler, still sitting on the fittings, picked up a large hammer, and struck it hard on the side of one of the pipe flanges. The massive units crashed into place perfectly. The old man turned to the boss man; "That'll be $10,000."

The boss protested. "But that only took you a few seconds." The man shot back, "Yes, but it would have taken your crew the rest of the day."

The moral of the story? It's the value of what you know, how long it took you to acquire it, and what it is worth to others, not how long it takes you to apply it.

My .o2c

I think its apples and opranges as was suggested earlier. Clearly a person with more business acumen is going to be drawn to something where they can use it... Those are the apples.

The oranges are a big group of people who dont feel so presentable , nor that they have developed enough business acumen to be consultants, so they go into a different kind of sales... and its not a bad kind, itss not even the "less money" kind...its the kind that makes the world go round and reaches masses instead of select customers.

I initially took to phone sales because I HATED face to face sales, and failed at it initially... In fact I had my self esteem beaten so bad by it that I couldnt even sell on the PHONE the first month I started... but after that wore off...the "quick pithces" on the phone I found were easily assimilated, I picked up a new peice of the puzzle with almost every call, and there were lots of calls... and I learned all the other stuff really fast once I got traction, eventually I was able to make more consultative type sales and face to face...

Never would have happened were it nbot for getting on the phone doing quick pitches for a year.

Thats why I love teaching telemarketers, because it gives me the chance to do the same for them... Alot of people arent really failures, who feel like they are, they just assimilate information in smaller amounts at a time, and they need to start with something easy to assimilate...

That doesnt make them dumb either, just a different personality "type".

In any event, as an adult salesperson, I still prefer the quick pitch because I dont like scmoozing a whole lot, and Im not looking to have coffee with my clients 3 times per week or stop in and say "hi" everytime I drive by... They dont want to come to my house either. lol

Ps. Kirb I agree with everything you said... Also, cool story about bein the top producer, and not just beating everyone else but DOUBLING them... Awesome.

You guys are right about price. But the problem comes from more then one place. We as Americans are getting attacked and or emails everyday from other countries (India, China, etc.) willing to do what we do for pennies.

The new guy wants to build his name and product, and the instant....right now have to have everything today mentality fuels these things.

I say, the best deal is the "NO PRICE LIST" deal! Find each customer, review their needs and make it work with their budget and what your time is worth. I feel that in the end you have won and your customer will feel they have won too.

YEAH! Sometimes the $100 whore is better than the $1000 one! What gives?

I was thinking the same my-self....if both biz do the exact same qulaity of job. But Chinaman does it for $500 and USA man does it for $5,000. Guess where I'd spend my money?

Usually the difference is between Apples and Oranges.

Apples being those who've created jobs for themselves.
Oranges being those who've created businesses for themselves.

The twain shall never meet due to disparity.

I agree with what you're saying! all I can say is shyt happens move on it's a hustle at the end of the day and sometimes you'll just get out hustled it's happened to me more than once, what's funny is every time it's happened to me the following month I made more money than I made the previous. Don't cry over spilled milk!

Reflects my thoughts exactly.

Totally Agreed.!!!

Jordan Godbey made a great blog post today about this very topic in the SEO space.

Don’t be an SEO – Be a teacher - ZoomSpring SEO