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. I've got a question from Dan Moretta who asks, would like to see your approach, if any, on how to raise prices on a project or a monthly-based service such as SMMA, like I have, social media marketing agency, I think? Thanks for the video. So, Dan, I think, guessed my answer already because he put that if any in there. It is really hard to raise prices on a client. The tendency over time is that the most valuable thing you'll do for a client is at the beginning because that's where, if strategy or planning or architecture or any sort of brains work is going to happen, it's almost always going to happen up front and then it moves into implementation and the value starts to go down. And then later it turns into maintenance and the value goes down even more. So the idea that your prices are going to increase with the same client over time, it's not the natural trend. So you're kind of pushing a rock uphill in that regard. My advice is to just, it's easier to just get new clients at a higher price. So as you have these sort of, you know, you've got clients that are kind of paying this much, as they start to tail off, you know, just stop working with the bottom 20%, the ones that are really stressful or the ones that are overly demanding or the ones who are operating, you're paying you the least and just take out, you know, kind of let them fall away, hand them off to other people, introduce them to other people and get bigger clients at higher price points because now you've got more experience, your marketing materials are going to be more persuasive, you'll have more time to build more trust through, you know, online activities like podcasting and so on and so forth and blogging, email lists. So just keep getting bigger and bigger clients over time. I think that's way easier than trying to raise your price on existing clients. And if you, the sort of resistance I see to that is that a lot of people, they are not getting very many leads. They have one whale client where they have, you know, a couple of really big clients and they kind of have a job. They're not really running a successful business. So if you're really resistant to the idea of like, you know, man, like firing my sort of bottom tier clients and getting new ones, that seems impossible. It's probably because you're not, you have no funnel, you have no pipeline, you're not getting that many leads, like you're getting two or three leads a year or the leads you get are like random word of mouth and you just, your business game and your sales game and your marketing game is just not there. So the idea, so it sounds probably harder to get newer, bigger, better clients than it does to raise the price on existing clients because you've kind of got this bird in hand and you just want to make the bird better. But that's really, I don't think that's, it's not as easy as it sounds or it's not as easy as you think it is. It's really hard to raise prices. So on existing clients because it's just set in their mind, you cost this much. Any exceptions? I guess an exception that would be if you offered a, if you come out with a new service and you sort of announce that to your current clients, your past clients, and you say, hey, I've got this new service. You know, it's different than what we did before. Whatever the landscape has changed, there's a new media environment or political climate, whatever. And something's changed, you've created this new thing in response to that change. What do you think? You know, would you like to talk about whether or not it's a good fit? And what you can do there is even if your price for the new thing is the same as, you know, is in the same ballpark as what maybe you did in the past, maybe the cost to you to deliver that new service is way, way lower. Maybe you've productized it and it's a price point that they're comfortable paying you because it's kind of what they paid you in the past but for a different thing. And this new thing is going to have a different sort of profit calculation for both parties. So your new thing, now that you're more experienced and you're better at what you do and you're better dealing with clients, you can come up with something that's potentially more valuable to them than the last thing you did but less costly to you, easier for you to execute. So you can set a similar price but it's more profitable for you and for them than the last thing you did or the thing you're currently doing with them because it's just smarter. Like you're working smarter instead of harder. So I suppose that would be a way to, you're not technically increasing prices on a current client but you're getting more money out of them because you're offering a new thing. So let's see, back to the question. There's prices on a product for a monthly service. Yeah.

To summarize, I think that's all I've got there. To summarize, it's probably easier to get new clients than it is to raise prices on existing clients, and you can create new products and services to sell to existing and past clients that might be more profitable for you and them. All right, that's it for now. I'm Jonathan Stark. If you have questions, just hashtag AskJonathan on YouTube, LinkedIn, or Twitter, and we'll find it and add it to the list. 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 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 slash call, C-A-L-L. That URL again is JonathanStark.com slash call. Hope to see you there.