Anchor the value but not time

Value based pricing is easier said than done, most freelancers still quote by the time to be spent, even they do not disclose that.

As I listed in the About page, for potential clients, there are two ways to work with me, one is hourly billing (5-hour as a unit) and the other is a monthly retainer for $3k. Both require the client pays upfront. I didn’t explicitly address it, but the monthly retainer offers a full refund, while the hourly billing doesn’t.

It should be obvious, in my opinion, if you choose the hourly billing, you’re buying my time, so I bill by the time I spend. On the other hand, if you choose the monthly package, you should be receiving the value I promise when we agree on the collaboration. If I fail to do that, I offer full refund.

In the early stage of my freelancing career, I quoted each individual project and it’s very time consuming. So when I firstly knew that I could simply bill by hours, it was very tempting and I quickly switched to it.

Time is a limited resource

Many years passed, but now I have a new issue: time is a limited resource and I don’t have that much time for sale.

To increase the revenue, I will either need to increase the hourly rate, or lie about the time I spend. Both are not feasible. Lying is of course just kidding but why is increasing hourly rate not an option, you may wonder?

To me, billing by hour is ultimately hurting my productivity. It feels like you get punished when you can get things done very quick. By very quick I mean something the others do with days but you do in an hour. I don’t want to disclose every detail to my clients and say for this and this it’s $1,000 per hour and for that and that it’s $120 per hour. That is tiring.

The second is you have so many hours you do not clock it but you keep thinking about it, you even dream about it. But those are not trackable and so they can’t be billed.

Fixed package price for a month

I currently think it is the right way to approach almost every client once you decide you can trust them. That being said, you may start with a standard hourly rate and then migrate them to this tier.

The benefit in doing so is obviously I don’t have to clock the tasks anymore. To be honest, I still do, but I don’t have to send the timesheets to the client, it’s just for my own reference. And also the monthly pricing helps the client to clarify what they need and what they’re looking for.

In the freelancing market, we all know the same task, one can quote for $500 and the other can quote for $5,000. And the best part is, the person who acquire the service with $5,000 can be as satisfied as the person who spends $500. It’s just like MacBook Pro users are as happy as ASUS customers.

People who want to buy a MacBook Pro will look no further than an Apple Store, while ASUS customers know where to buy their products in the best bargain.

Pick the right price to start

The price tag can vary. It also doesn’t mean you need to sell everyone the same package. The point is, if the client is looking for a service that you can reliably provide, you should make it easy for them to make the decision. How? By scoping it and price it.

The most famous example is DesignJoy. Brad offers two packages and scope what’re included. My goal is something similar, not anchoring his prices though, but something as straightforward as his.

I aim to offer the best developer collaboration experience my clients can find in the WordPress space. It’s like nothing you can find elsewhere. I’m professional, experienced; I know what I’m doing, I love what I’m doing, and I make things easy for you.

Keep up the great work

Once the packages are defined, and clients have made the decision. The rest is to keep up the great work. No excuses.

At the end of the day, I want to look in the same direction with my clients, understand their business, and make their investment in hiring me at least 100% ROI.

That’s the only way you can build the win-win relationship in the long run. And I plan to stick with my clients as long as they’re still in the business and need my services.

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