Ditching Hourly

Hello and welcome to Ditching Hourly. I'm Jonathan Stark. Today I've got an audio excerpt from an answer I provided on my YouTube channel. You can check it out at thejonathanstarkshow.com and it'll redirect you to YouTube if you're into watching videos. Otherwise, you can just listen to the audio here on the podcast. Enjoy. Hey, Jonathan here. Got a question from Boxxy Socks, awesome name, who asks, you said, quote, why not hire someone from a low cost of living country, end quote. Well, the thing is, at least I personally am from such a country and even though I'm not yet at the point of quoting $18,000 for a project, I am quoting prices that some Westerners deem too expensive. What would you recommend to do in that situation when you can't pull out the I have high living costs card? All right, so what Boxxy is talking about here is it's a reference to when I talk about the why conversation. And the why conversation is what you have in a sales interview when someone is thinking about hiring you and they want to meet you. You say, that sounds great. Those things that you want done are things that I do. Let's jump on a quick phone call to see if there's actually a good fit between the two of us. So I don't want to take your money if I'm not going to deliver positive ROI. Okay, great. They jump on a phone call and they brain dump about the project. And when they're done, you say, fabulous, thanks for that. I've got three pages of notes here. Let's back up for a second if that's okay and get some context on the project. And at that point, you go into these three why questions, these three categories of questions. Why this? Why now? Why me? And why this? Well, I've talked about that before. I won't go into the whole spiel. The last one though, why me, basically amounts to asking the prospect, why would you hire someone expensive like me when you could get someone from a lower cost of living country? That's the reference here. So that's just one example of something cheaper that people sometimes consider in situations like that. It could be anything else, but the boxies getting it reversed. The important thing isn't that you're saying to the buyer in that situation that I live in a high cost of living country, therefore you have to pay me more. That's not what you're saying. That's not what you're trying to get across. You're not trying to project your costs onto the buyer and say, well, I live in New York City, so you have to pay me a lot because I have an expensive apartment. That's not my point. My point is that they're aware that cheap labor exists. Maybe it's in a low cost of living country or maybe it's their cousin Vinny. That was just one example of like commodity labor. They could go on Upwork or 99designs or whatever it is. It was just a reference to a place that people often think of as like, you know, a cheaper option. So why wouldn't you buy a cheaper option? Why are you considering an expensive option? So how do I put this? So you're not trying to convince the person that you're worth more because your costs are higher. You're trying to find out why they didn't consider the cheaper alternatives that do exist. And Boxy even says, he or she, I don't know if it's he or she, is saying like, yes, I know there's lower costs, happen to be where I live, but I want to charge more. That's still fine. You could just change the comment to why don't you go with someone cheaper? There are people who I work right next to who are cheaper. Why don't you go with them? Why would you go with me, someone expensive? So it just depends on how you phrase it. So let me give you an example of, I'm going to tell a little story to kind of give you the feel, the difference between projecting the cost, a cost-based price and a cost-based persuasion versus a value-based persuasion. So lots of times when people are going to become a freelancer, they're thinking about being a freelancer, they go to these hourly rate calculators online. These drive me crazy because they're totally self-centered. So you go in there and you put in your annual expenses and your monthly expenses and your weekly expenses and it tells you how much you spend and now you divide it by the number of hours you think you can be billable per week and now like somehow clients owe you that much money? That doesn't make any sense to me. And here's an example of how it doesn't make sense. Let's say you do that calculator. Let's say Boxy does this and their cost of living, I don't know, I'm just going to pick a number. Let's say their annual income divided by the number of billable hours, you know, it works out to $50 an hour. They have to charge $50 an hour to like get by. So they go to their clients and they say, I'm $50 an hour and they're working, working, working. Then Boxy decides to move to Silicon Valley, moves to San Francisco, cost of living quadruple. You can't go to your clients and say, hey everybody, it's been great working with you at $50 an hour, but now I have to work

At $200 an hour because I moved to San Francisco. Okay, that's cool, right? Everybody's cool with that, right? No, clients are going to freak out. They wouldn't expect to absorb your cost of living increase because you decided to move to San Francisco. And conversely, if you lived in San Francisco and were getting $200 an hour and then moved to the Philippines, should you pass the savings on to the client? It doesn't make any sense. Okay, so the point of me talking about that is that Boxee's question is implying to me that the understanding was that it was basically a misunderstanding. I'm not saying when I say, you know, why not go with someone from a lower cost of living country or get someone from Croatia or Costa Rica or whatever, and I happen to know people who work there at lower hourly than Western, so I'm not picking on countries, but I know people there who charge less for good work, so those are the examples. And I'm not saying that since you have a high cost of living that you are worth more. That's not what I'm saying. I was just saying when you make that comment, what you're trying to do is raise any objections that the prospect might have about hiring someone cheaper because you're about to write a proposal. They're going to get the proposal, and they're going to see the price, and it's going to be high. So they're going to have objections, and they're going to say, well, why is this so high? I could get someone who works in the office right next door to you for half this. So you want to address that before the proposal. That's the whole point. Now, one last thing. If you're quoting prices that Westerners deem too expensive, crying about your cost of living isn't going to help. Like, the solution to this isn't that you move to San Francisco so you can say to them, oh, well, yeah, my price seems high, but I live in San Francisco. My rent's ridiculous. That's not going to cause them to see more value. See what I mean? What you need to do, if people are balking at your price, what they're saying is, I don't see enough value in what I think I'm going to get from you to justify this. So you're asking us for $18,000. We're going to give you $18,000. The thing that we think we're going to get back from you, we think is only worth about $10,000. So why would we give you $18,000? So what you want to do, if you want to charge $18,000, you want them to perceive a value in what you're going to give back to them, the business outcome that you're going to deliver that's way more than $18,000. And if you can do that, if you can find what it is that they're trying, the business objective that they're trying to reach, the transformation that you're going to be helping them with, and you can value, you can get a sense from them of the value of your contribution to that ultimate goal, then you can value price that, and it doesn't really matter where you live because you've got the numbers right. $18,000 is a no-brainer because they're going to get a million dollars annually back from your contribution to that or whatever the numbers are. Even if it was $50,000, it would be a good deal for them. So don't worry about the cost of living thing in terms of proving your value or lack thereof. Focus more on the value that you would deliver to them in their own terms. What expensive problem are you helping them with in their own words? And value that, get an estimate of the value of that from them, and then price below that. And then if you can do that, if you get good at that, and you can with practice, then you'll close deals like crazy because people will be like, oh yeah, this is a no-brainer. This is a great deal. In fact, let me look at this option too. Let me look at this option three. These are a lot more expensive, but this is, if we're going to spend this much, we might as well spend that much, and this is going to be a huge win for us. Okay, so hopefully that helps. I don't know if I made things worse or better. But anyway, I'm Jonathan Stark, and if you have a question for me, hit me up on YouTube, Twitter, or LinkedIn at hashtag AskJonathan, and we will get to it as soon as I can. See ya. Would you like to learn how to get paid what you're worth? How about selling your expertise and not your labor? We work through all of this together in The Pricing Seminar. Pre-registration starts soon, and you can sign up to be among the first to know when early bird pricing is announced at thepricingseminar.com. That URL again is thepricingseminar.com. Hope to see you there. Hey, Jonathan again. Do you have questions about how to improve your business? Things like value pricing your work instead of billing for your time, or positioning yourself as the go-to person in your space, or maybe productizing your services so you never have to have another awkward sales call or spend hours writing another custom proposal. Book a one-on-one coaching call with me and get answers to these questions and others in the time it takes you to get ready for work in the morning. Best of all, you're covered by my 100% satisfaction guarantee. If at the end of the call you don't feel like it was worth it, just say the word and I'll refund your purchase in full. To book your one-on-one coaching call, go to jonathanstark.com.

That URL again is jonathanstark.com/call. Hope to see you there.