{
  "$type": "site.standard.document",
  "description": "Four practical strategies to charge more: raise your rates, increase your minimum billing unit, offer tiered proposal options, and use in-project upsells.",
  "path": "/articles/charge-more/",
  "publishedAt": "2017-12-07T19:41:46.000Z",
  "site": "at://did:plc:jznynyzgerlqmdbbj33o7wfs/site.standard.publication/3mnll3icujb2z",
  "tags": [
    "Positioning and Pricing"
  ],
  "textContent": "Let’s look at four different ways to charge more for your work.\n\nRaise your rates\n\nCharge more. Take your prices. Now raise them.\n\nIf you’re writing Proposals...\n\nIf you send proposals, on your next proposal, raise the prices you’re quoting by 20%. Just raise ‘em. That’s it.\n\nSee if the new prices stick.\n\nIf they do, great, that’s your new minimum rate. If they don’t, understand the objection the customer had and adjust.\n\nIf you’re billing hourly...\n\nIf you have an hourly rate, raise it. Here’s how I did it whenever I raised my hourly rate:\n\nI took my hourly rate\nI increased it by 25% on my websites and in all new proposals\nI kept billing my existing clients at the existing rate\nWhen someone approached me for work, I quoted them the new, higher rate\n\nIf you have fixed prices for your services...\n\nIf you have fixed prices for your services (Example: /services/), then increase them. Edit your website and raise your prices.\n\nAll new work is at the new prices.\n\nWhat happens if someone says “Hey, a month ago your price for this service was $750. Now it’s $1,000. What’s up with that?”\n\nYou simply say:\n\nYes, I raise the price due to demand and overwhelming positive response.\n\nHow much should you charge?\n\nI don’t know. It’s your business.\n\nHow about this: You should probably be charging 25% more than you’re currently charging.\n\nI remember talking with Patrick McKenzie (Patio11 on the interwebs) on Hacker News years ago.\n\nI mentioned I was going to raise my hourly rate to $100/hour (from $75/hour) at the start of the next year.\n\npatio11: What will change between now and then justifying the higher rate?\nKai: I don’t know.\npatio11: Then raise your rates now.\n\nIf you are waiting for permission to raise your rates, first, you don’t need permission from anyone. It’s your business, friend! Raise your rates! Charge more.\n\nSecond, if you feel that you do need permission, then I give you permission.\n\nYou have permission. Charge more.\n\nRaise your rates.\n\nMinimum Billing Units\n\nHow do you bill your clients?\n\nHourly? $X/hr for each hour you’ve worked?\nDaily? $X/day.\nWeekly? $X/week.\nPer-project?\n\nOne question that freelancers often ask is “How can I attract better clients with bigger projects.”\n\nWhat I’ve discovered is that by increasing your minimum billing unit (the smallest unit you bill in), you’re able to better pre-qualify prospects and projects and work on better, higher paying projects.\n\nWhat does this look like in practice?\n\nGo from billing hourly to billing in half-days or full-days or weeks.\n\nLet’s talk about making the jump from billing hourly to billing half-days.\n\nIf you’re billing hourly, you can start quoting a half-day rate to your prospects. Just take your hourly rate and multiply it by 4!\n\nThat’s now your minimum project size and minimum billing unit.\n\nWhen someone asks what your rate is for a project, you can say that the minimum project size you accept is a half-day project and you bill in half-day increments.\n\nThis small adjustment to the minimum project size that you’ll accept has a range of positive effects:\n\nYou’re pricing yourself for the larger projects that you want\n\nBy positioning yourself as accepting half-day (or day, week, etc.) projects, you’re positioning yourself for larger projects.\n\nIf someone needs, say, a logo uploaded on their site, great! You can help with that. You have a new rate for this work and the client gets to decide if they want to work together.\n\nWhich brings us to the second point....\n\nSecond, you’re leaving the value decision in the hands of a client.\n\nLet’s say that someone approaches you with a small task. In all honesty, it will take you 30 minutes to do.\n\nIf you’re billing hourly, you’d quote this as an hour project, do it, bill it, and be done with it.\n\nBut if you’ve followed Kai’s advice, you’ve raised your minimum project size (your minimum billing unit) to, say, a half-day or day.\n\nNow when this prospect comes, if you’re interested in the project, you can say that you’d love to work on the project.\n\nYour minimum project size is a half-day and this will be a half-day project. A half-day is $X.\n\nNow the client is able to make a value based decision.\n\nThe client has two factors known to them:\n\nThe price, which you’ve quoted\nThe value (quantifiable and qualitative) to them in having this project completed\n\nIf Value exceeds Price, then it makes sense for them to work with you.\n\n“But,” you might be thinking, “Isn’t this just a 30-minute project?”\n\nYes!\n\nAnd your minimum project size is a half-day.\n\nSo if the client thinks “Excellent, we need this taken care of, we can afford this price, and the value in getting this completed is very high.” then they have determined that value > price and should move ahead with the project.\n\nWhere it can feel confusing for us, as freelancers and consultants, is balancing the fact that this is a 30-minute project with charging a half-day rate.\n\nAnd that, dear friend, is because you have confused the cost, price, and *value.*\n\nThe cost of a project is the cost, to us, in doing the work.\n\nThe price of the project is what we quote the client to do the work (price > cost).\n\nThe vale of a project is the value to the client in having the project completed (value > price > cost).\n\nAs a freelancer, it is very easy for us to understand the costs and prices associated with the project. 30-minutes of work. A half-day of our time.\n\nBut what we lack is an understanding of the value of the project to the client.\n\nThis small 30-minute project? While it may look small and tiny to us, perhaps it’s something the client has struggled to do themselves.\n\nMaybe they have a high amount of quantifiable or qualitative value attached to this project being completed.\n\nPerhaps they’ve spent hundreds or thousands of dollars already working with other providers and they’re struggling to get it finished.\n\nWho knows?\n\nThe client knows.\n\nWhich is way the decision on working together is in the client’s hands. They’re the party best equipped to compare value and price and make the decision:\n\n“Is there enough value in this project for us to invest in it?”\n\nWhen you raise your minimum billing unit and project size, you’re optimizing for larger projects. You’re charging more by optimizing your pricing and billing for larger projects.\n\nIf someone comes with a small project and you say “Great, it’ll be a half-day, that’s $X.” Now they can decide if the value exceeds the price. If it does, great! You just sold a half-day project.\n\nIf the client decides that the value is less than the price, then they will pass. Great! You just avoided a smaller project!\n\nAnd that’s what you want.\n\nYou want to be optimizing for better, larger projects.\n\nAnd one of the easiest ways to do that is to increase your minimum billing unit / minimum project size.\n\nSo, what should you do now?\n\nIf you want to work on larger projects, better projects, or higher paying projects, raise your minimum billing unit.\n\nIf you’ve been charging hourly, start charging by the day or half-day. When a prospect comes to work with you, say “Great! My minimum project size is a half-day and I bill in half-day increments.”\n\nIf you bill in half-days already, try moving your minimum billing unit to a full day.\n\nIf you bill daily, try switching your minimum billing unit to a week.\n\nWhat will be the effect be?\n\nWhen a prospect comes to you with a project, you can — early in the conversation — let them know that you don’t bill hourly, your minimum project size is half-days/days/weeks. That’s the smallest amount you bill by.\n\nIf the project doesn’t have enough value for the prospect, then the prospect will be able to recognize — early on — that this isn’t the right fit, and go with another freelancer.\n\nAnd if the prospect sees the value in the project, they’ll be saying ‘Sure, we need this done, let’s get started!’\n\nRaising your minimum billing unit makes it easier for you to attract larger, better paying projects.\n\nSo, go and do it today. If you bill hourly, quote a half-day rate on your next project.\n\nOffer Options\n\nIs it a yes/no decision to work with you or a choice between how a client can work with you?\n\nA proposal with one option, like:\n\nWork with us. $X.\n\nIs a choice between two things: working with you or the status quo.\n\nThere is a magic in offering multiple options to work with you.\n\nWhen you offer the prospect different options (a ‘choice of yeses’), you make it easier for them to decide how to work together.\n\nInstead of it being a yes (work with you) / no (do not work with you) decision, it is a choice between different options:\n\nWork with you on a small project, including A and B\nWork with you on a medium project, also including C and D\nWork with you on a large project, also including E, F, G, and H\n\nNow, for the client, working with you is a choice between different ways to work with you, not a choice between working with you — or not working with you.\n\nHow do you incorporate this into your business, your proposals, and your quotes?\n\nFirst, look at your ten most recent quotes/proposals/estimates. Whatever you sent the client to review and approve.\n\nDid you include a single option (be it hourly, a defined project, a weekly rate, etc.) or multiple options for them to decide between?\n\nIf you include just a single option in your proposals, you will benefit from switching to including multiple options for the prospect to decide between.\n\nBy doing this, you will increase the value of an average project for your business.\n\nHere’s how:\n\nIf you go from an option of:\n\nWork with us. $X\n\nto\n\nOption 1. $X\nOption 2. $Y\nOption 3. $Z\n\n(where Z > Y > X)\n\nSome percentage of prospects will see the value in Option 3 and be able to afford it and pick it. Some will do the same, but for Option 2. And some for Option 1.\n\nGoing from offering one option to presenting a prospect with multiple opportunities to work with you, at different values and price points, will increase the value of your average project.\n\nBut how many options should you offer?\n\nIn a recent discussion on Freelance Camp (https://freelance.camp), a community for freelancers and consultants, it came up that 3 option proposals performed the best for a range of reasons.\n\nWhen I write proposals or quotes for work, I always try to write three option quotes:\n\nOption 1: The solution to the core need/problem they’re experiencing ($X)\nOption 2: Something more and different, providing more value in addition to what’s included in Option 1 ($Y)\nOption 3: The big option. Something more and different, providing much, much more value than what’s included in Option 1 or Option 2 ($Z)\n\nWhat I’ve found, most often — and this is a good thing — is that when you send a 3-option proposal, the prospects take the time to ask questions about the options. And, often, they’ll say “We love option 1 and this part of option 3. Can you put together a custom option?”\n\nAnd now you’re having a conversation with the prospect about crafting an option for that’s tuned to their needs and situation.\n\nAt a higher price point than Option 1 alone.\n\nWhat’s to lose?\n\nNothing.\n\nStart using tiers and multiple options in your proposals. Increase the average value of a project to your business.\n\nShould you offer options in your proposals?\n\nReaders wrote back to share their thoughts:\n\nI just wanted to reply with a hearty “YES” to your email about Options. I’ve been doing this since day one of my consulting business and it works amazingly well. The two key benefits I see are 1) I’ve almost never had anyone negotiate with me on price. If they don’t have much money they just choose Option 1 and 2) The exercise of creating the options forces me to think about how I could add more value to the client. — Andrew W.\n\nand\n\nIt’s so funny, ever since I started adding multiple options to proposals (which I only write for projects worth the time of writing a proposal) - people always seem to pick the more expensive option. — Dylan K.\n\nAdding options to your proposals is a solid strategy, my friend. Don’t just take my word from it, Andrew and Dylan both speak to the value of offering your client multiple options.\n\nUpsells\n\nYou may already be familiar with up-sells. Here’s the core concept:\n\nWhen purchasing something from you, the buyer is also presented with the option to purchase an additional thing for an additional fee.\n\n“Would you like fries with that?” is a great example.\n\nThe customer has already decided that they’re going to get a burger. The customer is then presented with the option to purchase an additional item that makes the sale more profitable.\n\nHow upselling can make you more money as a freelancer\n\nWe talked about offering options in a proposal:\n\nWhen I write proposals or quotes for work, I always try to write three option quotes:\nOption 1: The solution to the core need/problem they’re experiencing ($X)\nOption 2: Something more and different, providing more value in addition to what’s included in Option 1 ($Y)\nOption 3: The big option. Something more and different, providing much, much more value than what’s included in Option 1 or Option 2 ($Z)\n\nAnd you can consider options as a form of an upsell, absolutely.\n\nBut what if I told you there were more and different strategies you could use to add upsells to your projects?\n\nUpsell Strategy #1\n\nWhen the client decides on an option for a project, then ask them if they want to add a support plan to the project.\n\nWhat does the support plan look like? Here’s a general example to build off of:\n\nDedicated access to you or someone on your team over Slack, email, or phone\nA fixed duration. “Three Months” instead of a recurring, month-to-month, ongoing engagement\nCalls at fixed, scheduled times (once every three weeks, say) to answer any questions that they have and discuss the results that they’re seeing from the project\n\nDoes this work for every type of project?\n\nNo.\n\nBut some of you reading this are thinking “Hm, you know what, I bet I could have pitched my last client on that!” and this upsell strategy is for you.\n\nIf you’re providing strategic advice or a one-off service that the client then monitors to see how it’s going (say, a website optimization or launch) where your advice/insight/support would help, then this upsell strategy makes sense for your business.\n\nUpsell Strategy #2\n\nPresent the client with new, additional options during the project.\n\nImagine this: the client hires you for a project. It’s going great.\n\nYou have a call with the client, and they’re ecstatic, couldn’t be happier.\n\nIf you said “Hey, would you also like this additional outcome? Because I can make that happen.” what would they say?\n\nMost likely, yes, honestly.\n\nI’ve been in that position many times when I’ve hired consultants, freelancers, and contractors for my business and it has worked on me every single time.\n\nAs the business owner, my mental state at that point is “I have found the golden goose! These eggs are amazing!”\n\nAs the client, if the consultant at that point presents me with a few additional opportunities for investment, I am likely to say yes.\n\nThis is the “In-Project” upsell. You can use this during a project after a big win to present the client with other opportunities to work together.\n\nUpsell Strategy #3\n\nPresent the client with additional options to work together at the end of the project.\n\nAs a consultant, at this point, we’ve had a chance to look ‘inside’ our client’s business.\n\nWe understand their needs, their pains, the additional outcomes they’re looking for.\n\nAnd that puts us in a gosh-darn good position to pitch them on additional ways we can work together.\n\nMy first freelancing gig after I quit my day job started off as a 10-hour/week $25/hr project.\n\nI turned that into a 35-hour/week $55/hour project over 12-months by consistently presenting the client with options for additional things I could do to help them grow, make more money, or save money.\n\n(Looking back now, I can see how I much I was undercharging them. Oy.)\n\nOver time, I found enough recurring work with that client to have built a stable base of work.\n\nSmall project by small project, I presented the client with options to add more recurring pieces to our work together.\n\nAt the end of each project, have a project wrap-up call with the client. (That’s a bonus tip. Start doing that no matter what.)\n\nOn that call, present the client with options for three different projects you can work on next that will help the client’s business.\n\nWill every client say “Great! Let’s start with this one next!” when you use this strategy?\n\nNo.\n\nBut some will.\n\nEven if just one out of ten clients picks an additional project to work on, what would that mean for your business?\n\nIn my experience, when I first implemented this strategy in my business, I had a 1/3 conversion rate.\n\nOne out of every three times I used this strategy, I sold the client on a new project.\n\nThis works best with projects that are related to the main project in some way (“We redid the copy on the landing page — now let’s look at the sales funnel!” or “We built that app, but what are you doing for backups?”).\n\nTry these strategies and see which works best for you.\n\nAnd if you’ve used any of these strategies in your own business, write back and let me know how they’ve worked. I love hearing from you.\n\nExcelsior!\n\nKai",
  "title": "Charge More"
}