Does Anyone Know the Secret to Charging More?
I’m regularly asked the secret to charging clients more money. Developers, designers, sales, and account folks all have the same question.
This presumes three dynamics (which may or may not be true). The first presumption is that there is a single strategy, which once learned, will open the door to riches. The second is that it’s a simple strategy that can be adopted by anyone. The last presumption is that I know it and am willing to share it.
Like I said, I don’t know if those three dynamics are all true. Given that pricing falls into the domain of really tough questions that have no perfect answers, maybe the truth is that all three dynamics are incorrect.
That said, my answer would boil down to two things.
The first, which I’ve shared often, is to listen more effectively. And to listen slowly.
Listening slowly is an odd phrase, but I use it on purpose, because most of us rush the intake process. Tell me if this sounds familiar.
You sit with a client (or jump on a call with them), and they start telling you about the work they need done. If they’re like most of the people I talk to, they’re actually telling you about the work you will do—and by that I mean the actual work, the actual tasks.
If you’re like me, you’ll ask them to back up and have them tell you a bit more about their objectives and the context of their business. But even then, let me ask you a question—where’s your brain going?
Is it like mine?
By default, my brain moves directly to how I’d go about solving the problem. I start thinking of the solution. But there’s a problem with that approach, right?
Because the faster I move to the solution, the less I’ve listened. The shorter I’ve listened. Basically, that’s what I call listening fast.
And the problem with listening fast is that it’s not really listening. And it doesn’t give you enough time to learn all you can. You miss out on nuance. You miss out on context. You miss out on features that you’ll discover later—which will cost you (and lose you profit).
The slower you move to the solution space, the more you steep yourself in the problem space. And this is what I call listening slowly, or marinating in the problem space.
It helps you “really” hear. And really hearing helps you understand real value—which translates to better quotes. If I hear that this is the CEO’s pet project, I know that translates to way more stress, way more risk, and likely tighter deadlines (and more phone calls). All of that has to get priced into a quote—pushing the number up.
My other tip is a bit counter-intuitive, but don’t write me off just yet. To help you see what I’m talking about, let me put two options in front of you and see which you’d like better.
Option 1 – Fixed Bid
I hear you share what you want. I think I know what it means. But there’s a lot we haven’t stepped into, in terms of details. That’s ok, because I know your budget and so my plan is to fix my services in detail.
Everything outside of scope will cost more. Like an à la carte menu. But that gives people choice, and it protects me from all the places where I didn’t have enough detail.
Option 2 – Initial Discovery Project
I hear you share what you want. But I highlight to you the numerous things we’ve not covered. I highlight some of the challenges depending on which route we take. I also highlight some of the nuances that could shift the size (or scope) of the engagement.
Instead of giving you a fixed bid (that has to protect me from you), I suggest breaking off a small part of the budget for a discovery project where we work out some of the unknowns.
This helps us document a more clear picture of the work, helps us get a quote that’s more accurate in place, and helps us both mitigate all the risks that had earlier been in the project.
As a client, which would you pick?
The first often feels like a simple way to nickel and dime someone. It’s not a great feeling. But I get it because we’re trying to mitigate risk via the scope document.
The second case mitigates the risk with an initial (small) investment. It also helps both sides figure out if it’s worth working with that person further. In essence it gives you a chance to step away (and for them too).
When I write “start cheap” what I mean is to eliminate the decision-making risk of asking a client to put an entire project into the hands of someone they don’t know.
By breaking off discovery (which I find some people do for free) and charging for it, you create a much smaller (cheaper) decision point. And assuming you’re a rock star, you’ll delight them and they’ll be more ready to hire you for Phase 2.
Additionally, you’ll have a much better understanding of the project, which often has positive consequences for your quote.
Want More Tips?
So there you go—I’m sure others have additional tips on pricing projects, and hopefully this is just the start of a dialogue that you can have in the comment area below.
Do you have any other advice on pricing projects?
Chris Lema is the VP of Software Engineering at Emphasys Software, where he manages high performers and oversees product development and innovation. He’s also a blogger, ebook author and runs a WordPress meetup in North County San Diego. His coaching focuses on helping WordPress businesses, or businesses wanting to leverage WordPress.