Ditching Hourly

DH ### Shannon Mattern

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Introduction

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Jonathan Stark: Hello, and welcome to Ditching Hourly. I'm Jonathan Stark. Today, I am joined by guest Shannon Mattern. Shannon, welcome to the show. Thank you so much for having me. Folks, you're in for a treat today because we're going to talk all about pricing at a strategic level, at a detailed level, at a tactical level. But first, Shannon, can you tell folks a little bit about who you are and what you do? Yeah. So I have been working with freelancers,

Shannon's Background

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Shannon Mattern: consultants, strategists for over a decade now, typically women running service-based businesses. And I started off as a freelancer about 10 years ago on the side of my day job and made all of the mistakes that you talk about on this podcast and help people solve. And in solving those for myself, I started helping other service providers like myself stop undercharging, over-delivering and overworking. And that's culminated in just helping mostly women service providers with pricing strategy and helping them overcome a lot of the things that hold them back from implementing things like value-based pricing and ditching hourly and all of those things. So yeah, I describe myself as a stove-toucher. I've been through it all, all of the pain and everything that I've done is to try to solve

Jonathan Stark: those problems for myself and then help others solve them too. Yeah. We recorded an episode on

Overcoming Pricing Challenges

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Jonathan Stark: your podcast last week, I think it was. And I know that folks listening to this show are going to get a lot out of this because we align on so much. It's wild when I meet people. It happens from time to time. It feels like we're all climbing up the same mountain, but from different sides and different trails. But we're all going to the same point at the top, which is price better, have a better life. Exactly. Where should we start? I want to dive in with your package pricing matrix. Am I saying that right? Package matrix. Yeah, the package matrix method. Okay. Yeah. So let's talk about that. It sounds so formal. I love it. Can you break it down for us?

Shannon Mattern: Yeah. So it's a pricing strategy that I started testing and implementing in my web design business

Package Matrix Method

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Shannon Mattern: back in 2018. I met a guest of yours on your podcast. His name is Paul Klein. I think you had him on a few years ago. We met as one does online, finding each other's content. It was back in the Alexa flash briefing days. I had created a podcast called Pet Talks for Side Hustlers. And it was like a mini Alexa flash briefing. And he found it and he reached out to ask me how I did it. We became friends. I learned that he was teaching pricing strategy and doing consulting around pricing strategy. So of course, I invited him on my podcast. And the way he talked about pricing, really, I had never heard it before. And I know that he learned from you, a lot of other mentors and things like that. And he talked about how you can offer fully custom service, customized service, and product tie services. And I was like, wait a second. Hold on. What? Because what I've been doing, I had stopped billing hourly for my web design services. But what I was doing was, I was still undercharging. I was providing first class levels of service at economy prices. It was as if I'm like, oh, you just booked the private jet experience, but you're paying for Southwest tickets. Yeah. Right, right. And so I thought, I still hadn't figured out that I wasn't selling a website. I had started to figure out that I was selling the value of the outcomes and results that that website could help my client create. But I was not even thinking about, oh, but what is the opportunity cost of me managing this whole project for them, wrangling their team, getting all of their stakeholders on board, all of the intangible cost savings of me just doing my job the way that I thought I should do my job. Right. And I wasn't selling those things. And I wasn't incorporating any of that into my pricing at all, even though I'd, quote unquote, allegedly stopped billing hourly. I'm sure you run into people who are like, well, my secret back pocket hourly rate is this. And I think the project's going to take me this. And I think I can mark it up a little bit like this, whatever math you're doing to not really fully make that transition. So when Paul talked about fully custom, is this price? Customized, is this price? Productized, is this price? It changed something in my brain. I don't know if you've ever experienced the click. Yeah. You're like, oh, that's why this is not working. And so that really started me on the path of how could I take this package that I'm selling and put it in this matrix and put that in front of my client and let them choose whether they want the first class level of service from me or they want to fly Southwest. And they're still going to get to their destination regardless, but are they spending their time or their money? And then from that, that changed everything. And then we found like, oh, as I started teaching that to the other women that I was mentoring, we were like, oh, there's another way you can differentiate that. It doesn't have to be fully custom, customized, productized. It can be so many different ways to slice and dice that based on what problem you're solving. And so I'll stop there. But there are so many more magical things that came out of that way of making offers to my clients.

Implementing Package Matrix

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Jonathan Stark: Cool. Yeah, that's great. I love when the light bulb comes on. For people who maybe the light bulb is coming on right now for them, what did it look like for you when you first started, like the first time or maybe the first time you felt confident presenting those three tiers to some prospect that came through the door? Can you get a little bit more specific for like what would be included at each level and what kind of things would be left out and what were the relative prices that you'd recommend? Yeah. So for like a traditional web design project, which is what I was doing, I mean,

Shannon Mattern: at the high end, like at every level, they're still going to get their strategy, branding, logo, copy, layouts, design, revisions. All of those things are standard across the board. But then at the high end, it's like, okay, am I going to make you fill out this workbook on your own? Or are we going to sit for two hours and I'm going to interview you? What can I take off of your plate? Are you going to... How can I make it so that you're spending the least amount of time and I'm taking on the majority of the parts of the project that typically stall the projects out? And how can I frame that to you in a way that it's like, this option is perfect for you if time is your most important thing and the cost of your time spending it here is going to actually cost you more than if I just do this whole thing for you. Versus maybe at a lower level, I'm giving you a workbook to fill out. And maybe at an even lower level, I'm just spinning up a site for you, handing it over. Here's how to update your content. You do that on your own, and then push this button when it's time to go live. So it's really like a level of service, a level of customization, custom strategy. Am I going to sit here and let you tell me all of the things that you want and turn that into a strategy and build something really custom? Or am I going to say, hey, this is my tried and true customer journey for a business like yours. I'm going to take what you have and put it in there and you're going to use that. So that was really what it was. And I wasn't super confident when I started putting together my offers that way. But what I realized is that when I put those 3 options in front of any client, and I was like, hey, here's my premium option. It's perfect for you if you value your time the most. I'm going to do all these things for you. This is the price. It's $20,000. That price is dependent on the business and what it can bear and the value of the outcomes and results that that business can get. Here's the mid-level. At this level, you're going to do more things. I'm going to do some things, but you're going to put some sweat equity in. And it's perfect for you if you want to commit to this project. That one's $15,000. And here at the low end, I'm going to give you basically my tried and true thing. You can think of it like moving into an apartment. We're not really changing much, but you can put your furniture in and customize some stuff. And that's, I don't know, $7,500. Which one of those would you like to move forward with? And when they would choose the middle or the low, I felt so free because I used to charge way less than that and still deliver that high end level of service. And I was like, Oh, they explicitly did not choose that. And now I don't have to ever feel again, like I'm a bad employee or a bad service

Sales Process and Payment Terms

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Shannon Mattern: provider, like whatever I was feeling. For not delivering it because they had a choice and they didn't choose it. And now I am free. And like, that was the biggest thing for me.

Jonathan Stark: Yeah. So a lot of times I hear those levels you described sound very much like something I talk about in my proposals class, which is, you know, one way to come up with three options for a proposal is DIY, you know, at the lowest level done with you in the middle, and then just totally done for you at the highest level. So let me, let's stress test this a little bit because I understand it. You understand it, but it still might be a little bit like, yeah, but for the people listening, and one of the things that has always struck me about web design projects in particular is that if you don't do that top level of service where you're interviewing them to get all the content out and fill out the workbook, as you put it, then the whole thing just stalls. They never get around to it. Like I've seen, I remember I interviewed, um, Diane actually that introduced us. And she had noticed this pattern where, you know, somebody's like, ah, I want, I want you to do my website, but first I need professional photography. And then like a year would go by and they still wouldn't have photos. So I could see someone maybe picking the, the, the middle option in particular, not the DIY, because you're pretty much in control of that. You can just, here's your WordPress site, or here's your Squarespace site. I got the domain set up or whatever, and just put your furniture in there. Like you said, rearrange the furniture if you want, have fun. But the middle one feels a little problematic. And I'm one, because you're engaged still. I, it sounded like, it sounds like you're still engaged, but you're waiting on the client for something. So for people, I could imagine people who bill in arrears or are billing hourly, that that middle option becomes problematic because they, they're waiting on the client. And that means they're waiting on money that they were expecting if they're getting paid after the fact. So in terms of, of your, um, payment terms in terms of your payment terms, what is your policy for, uh, for payment on these things? Is it all upfront? Is it partially, is it milestone-based or date-based? It has to be like a payment schedule unattached to deliverables in order.

Shannon Mattern: And there, so there has to be a few key things for that to work. Um, if the client's going to provide anything that you need, whether they're working with an external brand person or a copywriter or a photographer, or doing any part of that project responsible for any part of that project, one payment terms cannot be tied to any type of milestone that requires, um, that's going to have you not getting paid. If you're waiting on them, it has to be like, it's this many payments. This is the schedule they happen on, regardless of whether you're moving or not, um, to setting up a really good project plan and getting agreement on dates ahead of time, um, and, you know, giving them those dates and picking dates that work for you as the service provider on your calendar, um, and then getting agreement with the client on those dates of here's by when I need these things. And life's going to life, things going to happen. Clients are going to drag their feet. Their service provider is not going to do whatever. Having a, if this, then that situation where it's like, and also, um, I'm not like, if you miss this date, here are the consequences and not like punitively, just very matter of fact, like we are going, you're going to keep paying me and your projects moving to the end of the line. And that's probably going to be some date in the future.

Jonathan Stark: That's probably painful for you. So you're going to actually prioritize this instead of everything else that you're, that you're doing. So we have to still set up. We have to manage the project and manage the person and learn those skills. And a lot of the, a lot of the things that keep you undercharging over delivering, overworking, um, working on your client's schedule, I call that employee mindset. And it's a hangover from if you were ever, if you ever worked at a corporate job, you were conditioned to operate that way. And guess what? Your client isn't your boss. You're the boss of them and you get to decide all of the things and communicate all that stuff ahead of time. And when the communication is clear, the dates are clear. You've both agreed to them. You're doing some project management, you're following up with them. Um, and they're paying whether they're moving forward or not. And the consequence is that we might miss this project deadline. If I don't do my part, then that sets up a way better chance. And then also it's like, Hey, I noticed you're struggling. Do you want to upgrade to the package where I do it all for you that you saw that you didn't want, would you like to pay me for that now? Cause we can do that. You thought you could DIY it, but now you're going to miss your deadline. So. Right. That's fantastic. So I'm going to get super tactical even in inside of there. Cause like what you're saying is like very clear. Um, at what point would you and the client agree to the dates? Is this something that you'd present in the proposal? Like if we start by Monday, then within two weeks you need to have this. And then this there's, are they still deciding whether or not to buy or have they already picked a package, paid you your first payment and now you're saying, okay, here's the schedule.

Shannon Mattern: I've done it both ways. Um, where I'm like, uh, here, here are three ways we can work together at this level, here's what our dates will look like if you choose this. Oh. And by the way, these are all going away. If you don't make a decision by X, so you can kind of see, um, there's a deadline to this. Um, so that's, that's a strategic. Like decision to be like, this proposal is not going to be available to you forever if you want these dates then. Um, and I've done it after the fact when it's like, okay, you booked this package. Let's get everything scheduled. Um, I prefer the first way, but I think it just depends on you, your business model, like what your service even is, how your service works, how you deliver it, um, for you to choose one way or the other. And I think you could, you could experiment with whatever works, you know, with one way or the other and find what works best for you.

Jonathan Stark: That's great. Okay. And what was your actual sales process? What is it in, in selling something like this, the sort of the good, better, best web design thing, um, would, you know, you get leads and have a couple of phone calls with them and then put together a proposal and then get back on the phone with them and go through the proposal with them.

Handling Client Delays

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Jonathan Stark: Or was it more like it was all done over email and then there were really no phone calls. I'm curious, like your, your, the actual sales cycle piece, when somebody is serious and qualified, what level of, did you notice anything about the level of effort maybe before and after, like the way that you used to do it and like now with this, this three options model? Yeah.

Shannon Mattern: The way I used to do it was someone would be like, oh, Hey, I heard you build websites, I need X, Y, Z. And I'm like, great. Tell me right now, everything you need, or here's my email address. And I would just be an order taker, pixel pusher, you know, whatever. And then try to figure out how much to charge. And that was like in the very, very early days. Um, once I started to figure out like, oh, I need to take control of this conversation from the very, very like first moment when I'd have that conversation, I'd be like, great, here's a link to book a call with me on my calendar. And, um, so then they would book on my schedule when I'm available taking calls. Cause I'm setting the tone that like you're on my timeline. I'm not on yours.

Jonathan Stark: Yep. Um, if you let them push you around in the sales process, they're going to push you around in the delivery process.

Shannon Mattern: And then have, I would have an intake form in the beginning where I would ask a lot of the questions of, you know, the preliminary questions and really that was like trick, like training wheels for me. Cause I didn't feel super confident in, um, I wanted to know what we were going to talk about before we got on the phone. Cause I was like nervous. I'm like, I don't know what if they blindside me with something. I just wanted to feel like it was like a security blanket or something. Um, but as I got more confident, I started removing questions from that form because as we know, like the more questions there are, the less, you know, people are like, I'll get around to filling that out. And then, you know, you're like, what happened to that lead? Then I would have a consultation before it would be a fact finding scoping mission after it was like, tell me more about your business. What are the challenges you're experiencing? Um, tell me, um, like what would business look like for you? If we fixed these challenges, what is like, tell me what it looks like for. to come work with you. What's your average order value? I'm asking business questions, not website questions. And just even that conversation being so different than what anybody else was asking. They're like, Oh, wait, this is different. She's not asking me like, what vibe do you like? What's your style? Show me some websites you think look cool.

Sales Cycle and Proposal Strategy

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Shannon Mattern: And so from there, I'm planting seeds that, Oh, we're going to actually build something that's going to help you reach these goals. So at the end of that conversation, I'd always be like, Thank you. I'd set it up at the beginning. I'm like, Listen, I'm going to ask you a bunch of questions about your business. And then I'm going to go away and put together some options for working together. And then you're going to hear from me by Friday with all of those options. And you can make a decision on how you'd like to move forward. Sound good? And then I do all of that. And then at the end, I'd say, Amazing. I'm going to go away and do this. Do you have any questions for me before I do? Usually they'd be like, Give me a ballpark. And I didn't ask them about their budget or anything. And I'm like, I really need some time to sit down and crunch some numbers. I don't want to give you a number that's not going to be accurate. And then if they are cool with that, I would move on. If they're like, No, but just tell me. I'm like, Do you have a budget in mind for this project? Yeah. And only when we start talking about numbers, if they pressed it, because I don't want to set a low anchor for the project. And then if they give me a number, if it's so not even close to what I would ever do anything, I'd be like, Thanks for sharing that with me. Early on, I would not have the bravery to say I actually don't have anything close to that. So I'm going to decline to give you a proposal. I wouldn't say it on the call. But I would send that email afterwards if it was like $1,000. And I'm like, No, we can't. We're not. We're so far apart. But I also wouldn't ask that question on the consultation because I don't want to set a low anchor in the consultation form. I see a lot of people putting like, What's your budget with all these price ranges? And I'm like, Well, you're asking this question too soon. Because if you're designing a different decision than cost versus value, their perception of their budget is going to be completely different by the time they're done talking to me. Right. It's so wild, right? The psychology of this. The budget thing is...

Jonathan Stark: Here's why I don't... I'm the same way. I'm the same way. I don't really care what the budget is, because the budget is the amount of money that they've decided to spend on what they think is a series of activities that will be undertaken on their behalf. But that's probably the wrong list of things. So not only... In order for them to come up with a budget, they've also come up with a self-diagnosis and a self-prescribed solution, and then assign what they think is a fair amount of money to it. But it's probably the wrong thing. There might be a much easier way. It has happened plenty of times to me where someone comes like they're expecting this big, huge project. And I'll be like, Well, why don't you just write all of this stuff down in a three ring binder? You don't need a software workflow solution for your internal employees. You just need to get organized. So I can help you do that. And it'll only be $10,000. And they were planning on spending $100,000 on some workflow system. And it's way more profitable for me to interview... You know what I mean? It's just like the budget is just a... It's a red herring. But it does... It will give you a sense if they happen to share it. I never asked for it. But if they happen to share it, it does give you a sense of scale of how important this is to them. So it's a data point, but I kind of ignore it. So I'm totally with you. I want to see if you could speculate a little bit. Why do you think everybody always asks for a ballpark? One, they're trying to create certainty for themselves. Our brains love

Shannon Mattern: certainty. So it's this big open loop in our brain. And our brains hate open loops. Just psychology-wise, our brains hate open loops. So they're just like, that's the big missing piece of information here as I'm getting off of this call with you. So they're like, they just need to know. Then there's this budget conversation. It's like, people are coming in and your clients maybe are coming in thinking they're making a cost-based decision. They think they're buying a service or a product. But you know, and I know that we're gonna actually flip the script on them and put a value-based decision in front of them. We're designing a different decision than what they're expecting to make. And that's a process. So when they get on the call, they're like, well, I'm making a cost-based decision. And a budget is a data point to make a cost-based decision. And we're like, oh, but I'm actually leading you through a process and I'm designing a completely different decision for you. I'm not telling you that that's what I'm doing. But I'm asking you questions to design a different decision. And then also, some people are investment-minded. Some people are expense-minded. And then there's people in the middle who I call hustle-minded. And that's how we map our options in our package matrix. You know, some people are like, I'm gonna make a decision based on ROI, not money leaving my bank account today. And the people who are typically asking about budget are the ones who their default pricing paradigm is how much money is leaving my bank account right now, versus I'm not super concerned about how much money is leaving my bank account right now, as long as you can demonstrate to me that what's on its way back is more than what's leaving. And so that's... I think so many service providers need to understand that. That you don't know how the person across the screen or room from you thinks about money. And that's why I'm always like, I'm always going to speak to the investment-minded version of you first. If it's somewhere in there, that's who I want to talk to. I don't want you making a decision from that expense-minded version of you, but if that's who you are, there's an option on the table for you. So I think that that's kind of where that budget question comes from.

Jonathan Stark: Yeah, I like that. Your point about the open loop is true. They're just like, they can't stand the feeling of that open loop. Even though a ballpark, the premise is that it's a guess, but they're still gonna... It's gonna close that open loop for them and it's gonna become concrete in their mind. And anytime I've ever done it, and this was way early, like in 2006, 2007, maybe, I regretted it every single time. And it didn't take long to learn that that was a mistake because then I would go through the pros and be like, I totally lowballed myself. And then you're in that, you come back and you're like, yeah, it's actually... There's some options. None of them are as low as what I ballparked for you. So then I started turning it into a joke and they would ask me for a ballpark and I'd be like, yeah, somewhere between 5 million and 5,000. And they're like, can we narrow that down? And it's like, yeah, let's narrow it down. That's what I'm going to do when I write the proposal. So anyway, it is a huge mistake to ballpark it in the meeting. Some people are total black belts at this and they can actually price it right. I mean, somebody like Chris Doe or something, I've never been comfortable doing that. So let's switch into that next part of the sales cycle. So now you've gotten off the phone with them. You've judged the ballpark question

Presenting Proposals

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Jonathan Stark: and you need to sit down and come up with the options. So when you're doing that, either back then or now, if there's a huge difference, then you can give us the before and after. How are you thinking about... How different would one proposal be from the next? Because it's websites, but I don't... One client and a totally different kind of client business like somebody who does power washing and someone who's like a fractional CTO. It's 2 different kinds of businesses. So how boilerplate would it normally be for you or how much are these really custom proposals? Yeah. I mean, it's going to vary. But I think for a web designer or even a fractional

Shannon Mattern: CTO or even a power washer, it's like you have 80% that you're always going to be doing for every single client. That stays the same. You probably are customizing 10% to 20% of the deliverables based on that unique situation. I always start with what's my mid-level option? And then how can I package matrix those deliverables? What's the mid-level and how can I make a higher version of that and a lower version of that? But what's always going to be different... It could be that you are putting the exact same deliverables in front of every client. But what's really different is when I talk about that high-end package, I'm going to be like, this one's perfect for you if... And I'm going to tie it back to something that they said that makes me think, here's how I'm going to speak to the investment-minded version of them. I'm like, this one's perfect for you if you don't want to touch any part of this because you're taking your kid to college and you need this done. I'll get really personal and tie that back to them. And then I'll also throughout as... I'm explaining everything. I'm saying, so that you can get these outcomes, create these outcomes and results so that you can. So it'll be perfect for you if these deliverables, so that you can, so that you can, so that you can. And not options, $25,000. And then the next... And so that's where I'm taking the time to customize it to what they told me, what their challenges are, what their goals are, all of that. So the proposal, what I'm going to do, usually the same, but I'm not trying to sell this package to them. I'm trying to connect the outcomes and results they'll get to what they really want. And I think that's the biggest difference between... I see a lot of people do this, but I'm like, Oh, I'm going to list my packages on my website and my process, whether you're a web designer or not. And I'm going to try to sell this package to you. And it's like, they don't want to buy your package. They want to buy the thing that that's going to do for them. So stop trying to sell a product. It's not a product.

Jonathan Stark: Yeah. It's like, nobody wants a drill. They want a hole.

Shannon Mattern: Yeah. You said that on my podcast. I was like, yeah, exactly.

Jonathan Stark: So that's actually a jobs to be done thing from Clay Christensen, where I heard it first. But yeah. And it's a deep rabbit hole because nobody wants the hole either. They want to be able to have the picture and nobody wants the picture. They want their house to feel a certain way and nobody wants the house to feel a certain way. They want their kids to love them. So it's like, where do you get off that train? But okay. So this is all great. You've got the proposal. The deliverables piece is pretty predictable because that's what you do. But the custom part is probably the pricing and also the connection of the deliverables to this specific person who you talk to. Connecting the benefits to that specific person. So that piece, I review, I don't know, I've probably reviewed hundreds of proposals from students and people in Ditcherville. And that is the thing 100% of the time that could be improved about the proposals. They never, not never, but they could almost always do a better job connecting the stuff they're going to do or the deliverables that they're going to deliver with something the person sitting across the table said they wanted. So if you say, I'm going to do, I don't know, I'm going to interview all the stakeholders in each department and put together a series of analysis findings and recommendations. So that what? So that's something that person said they wanted. It's not, it's like, look at all this work I'm going to do. That should cost a lot of money, right? No, it's got to be so that we know that when we roll out the software that it's going to be aligned with everybody's, you know, users will accept the new software and not revolt because they like the old system better. It's like, oh, right. I didn't even think, yeah. We tried to do roll something out previously and Karen in accounting just refused to use it. She sabotaged the whole thing. Right. And that totally happens. And if in real life that happens, and a lot of times you'll meet clients who have had the experience. So if you can connect that bad experience with the remedy, then that, that the piece after so that you can is critically important. Everybody could do a better job of that. Me included probably. Okay. Now the thing that we might disagree about, but I can, I can already tell like there's a difference that, that makes it make sense. So you present, well, you tell me what happens when you've got the proposal written, it's customized to the situation. Do you email it or do you get on a zoom call? Do you go into their office? Like how do you present the proposal?

Shannon Mattern: I never suggest emailing a proposal to someone. They're going to read, they're going to skim it. They're going to just skip to the price and that's how they're going to like make their decision. So, I mean, most of the time. So I'm going, I typically make a loom video of myself just walking through, going through it, anchoring high in the, in the value of the outcomes and results. We start with the investment minded, the high end option first, and then go mid and then go low. Like we take away and take away as, as the price decreases. And I send them that video. And then with loom, you can tell someone's watched your video, which is pretty cool. Sometimes I link to the actual proposal below that video, but you can also put a link on the end card of the video to be like, Oh, and here. And at the end of the video, you can download that and read through it. So I force them to as much as I can, hear me go through it. I don't want to... I typically, I think probably it would depend on price point, maybe if you present it like in person or something, but I do think that you have to present it because there's an art and a science to presenting the proposal that they don't know. So they're going to read it wrong.

Jonathan Stark: Okay. So you actually have come up with a third way that is really cool. So I never did it that way. I never presented a proposal ever. I always emailed it. And this is a huge debate. It's a thing that people debate. Blair ends, he's like, No, no, no. One sheet, present the one sheet, get the conceptual agreement, get them to pick right then. And it's a little bit more of a... To me, it's a little bit more high pressure situation for the client. And then I'll send over the contractual stuff after. That's what Blair does. But I never did that. I knew at the end of the sales call whether or not they were going to buy. Like 85% of the time, I could tell that they're invested in this. They're leaning forward. They're saying we, they're talking about we already. And I'm like, they're going to buy. Unless I completely give them sticker shock, they're doing this. And that's the way I wanted it. I didn't want to feel like the proposal was in any way manipulative or salesy, or I wouldn't put like testimonials in there. It was like, they're already sold by the time we get off the phone call. They just need the price to pick the option. And the thing that when we were on your show, I saw coming for this one is in a narrative style proposal, a written narrative style proposal, I used to try and put the highest option first. But it's very difficult to say... It just breaks your brain if you're like... And in option two, it's just like option three, except for it doesn't have these things. I found it very difficult to write. It was much easier to write, here's option one, but I wouldn't put the price with it. I just say, here's option one, and this is what it includes. And then the next one, everything from option one plus I'll do this, that, and the other so that you will get these other benefits that you're not going to get from option one and then option two. It's really difficult to write a narrative proposal in a subtractive fashion. So I never did it. I always did it, even though that goes against the psychology of anchoring high. So what I would do is anchor high on the first page of the proposal and say, based on what we discussed, back to the napkin calculation, the annualized financial benefit from this engagement is going to be $100,000 or a million dollars, or you're trying to break into Europe and open up a $50 million market or something like that. So I'd have an anchor high in the proposal and then I'd start low to high. I never wanted to do the in-person presentation of the proposal or the live presentation of the proposal, because I knew there was a risk of me getting salesy. I knew there was a risk of them being silent and me getting like, no, no, no, but it seems like you don't understand, just getting desperate. Because now I'm like, I've got this sunk cost of I've had a sales call, maybe two sales calls. Now I've written this proposal. It probably took me a couple hours. Now we've got another meeting and I'm presenting it. And I'm like, no, there's too much sunk cost there. I send it and forget it. That's my rule. Send it and forget it. However, you found a third way, which I've never heard anybody say, which is if you can make that video, you could record it 10 times and get it just right. It forces them. It makes sure that they listen to it and understand it. And at the end, you can do it in this. I like your particular phrasing. I haven't heard before either, which I really like, which is this is perfect for you if. This option is perfect for you if. And then they can immediately decide if that's who they are in the moment. Like, am I? Yeah. Really, really cool. That is nice because it allows you to anchor high with your options and it increases the odds that they're going to get the message. The message is actually communicated and you don't risk getting salesy again. So that's really cool. Applause. Much applause. Thank you. Yeah, that's good. Okay. So once the sale, you already said that you put a deadline on the offer. Yeah. So after that, after you send over the loom, you see they saw it, you don't hear anything. How big of a shelf life do you put on the proposal? And what do you do, if anything, to follow up before that expiration date? Yeah. So I would usually put 7 days on a web design

Follow-up and Decision Deadlines

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Shannon Mattern: project. And just because they know whether they're going to move forward or not. Do they need...

Jonathan Stark: Thank you.

Shannon Mattern: at 85%. They know, we both know at the end of that sales call, whether they're moving forward or not. I usually say seven days. And I think it's just, I really do think it depends. Like, who are you pitching? This is for web design, but the package matrix method applies to like, so many different, you know, types of businesses, like who are the stakeholders? What conversations do they need to have to get approval? So there should be a deadline. Cause I don't want you coming back in a year and being like, okay, I'm ready. And I've raised my prices by three X. Um, so I will let them know, like, great. I'll look for like, here's, this is good through. I never say negative words in anything that I'm doing. Like, even when you were talking earlier about like option one and adding, I'm never like anchoring high and being like, and then here's what you don't get. And here's what you don't get. I'm just like, here's how this will work. Here's how this will work. And here's how this will work. Um, so that's kind of how, and so I'm, I'm never saying like this will expire or anything. I'm like, this is good through this date. Cause I don't want to trigger any of that. Like anxiety, worry, fear, fight, flight, freeze. Like, I just don't want to like do that to your brain and take your higher level thinking offline and have you being like all, Ooh, I need to get away from her as fast as I possibly can. So I'm just going to ignore that. I'm just going to be like, great. And then I'm never going to respond to her again. So, um, you know, I'll say this is good. Um, through Friday, I'm going to check in with you if I haven't heard from you, um, in a couple of days to see what questions you have. Um, and then in a couple of days, I'll be like, Hey, have you had a chance to look through everything? Even if I can see that they already have, um, cause that video tells me that they watched it. What questions can I answer for you before Friday, before this expires or before, um, I don't say expires, but before Friday and they will usually respond one way or another. Thanks so much for following up. Not, you know, this isn't for me, but more often than not. Oh, I've been so busy. I've been meaning to get back to you. Yes. I definitely want to go forward with this. Like, um, and I usually tell them to like, let me know which option you want and I'll send over next steps. Okay. Um, and I just assume they're going to pick an option. I'm never like, let me know if you want to work together. I'm like, which option do you want to move forward with? Yeah. Yeah. And I just assume they're going to be a yes. And so that's, that's how that works.

Jonathan Stark: What happens if they, this is, I get this question all the time. So I'm curious what your answer is. What happens if they come back on the Wednesday after the Friday and they say, I want option two.

Shannon Mattern: I would totally say yes. If, but the dates might like, it might change things, right? Like if, if I put it, usually I put that deadline because I like penciled you in, but I'm going to erase you and put someone else in your spot. So I can be like, yep, we can absolutely get started. However, these things are no longer because you missed, you know, we can do this now. Yeah. Um, but I'm not going to say no most of the time. Um, unless I really did fill the spot. Right. Exactly. Yeah. Unless I did fill the spot. Yeah. Like usually I'll make an exception. I'm not gonna. Um, but if it's like one of those things where it's like, oh, they missed the consultation call. And then they, like, if they're giving me a series of red flags and I'm like, actually, no, like, I'd be like, sorry, you know, that spot's gone, but I've never actually had to do that.

Jonathan Stark: I only, I think I only had to do it once. Yeah. The, the way that I put it is, uh, you know, after Friday, I can't guarantee my availability or the price. Yeah. And it's not like I penciled you in. Yeah. Right. I like the penciled in. Cause that, that makes total sense. It's like a pencil this in, I'm holding a spot for you until Friday. After that, maybe I'll still have a spot. Maybe the prices will still be the same the week after. Yes. Probably the price will still be the same, but I do want to plant that seed that they can't come back in six months and expect that these prices are still going to be the same. It's not like sitting there on the shelf waiting for them. So, yeah, so that's really good. Super duper aligned. And that was the, you know, the, the high price first, low price first thing was the thing we talked about last time. I was like, I don't know if I agree about that, but you actually convinced me. Uh, that's a really, really good approach. Uh, one last thing about the deadlines for people who are sort of taking notes here. Um, and you alluded to this, but like a lot of, I usually would use 14 days and sometimes 30 days because the projects I were, I was doing were like a lot of times in the six figures and they were fortune 50 or fortune 500 companies anyway, and they really did have to talk to a bunch of people and it was corporate environment and everybody's like crazy busy. So I would give them a couple of weeks to, or, you know, if I knew they were going to, somebody was on vacation, some decision maker, I'd be like 30 days and I'll follow up on a schedule. Uh, if I haven't heard back, I'll check in on, you know, date seven days from today, whatever. So yeah, but critically important that you do have some kind of data in there because it allows you to follow up without seeming desperate because if you don't put a date in there and you're, you're like, geez, I haven't heard back from these people and I, you know, I haven't had any sales calls and then you email them, you're just like, Oh, you're going to do this or not? You know, it give off those sort of desperation vibes. Uh, you don't want to do that. So if you have an expiration date, you can be, you can write that email in a way that's sort of generous and professional because it's like, as you know, following up as promised, it's, it's already Wednesday. Can you believe it? Uh, yeah. Do you have any questions that I can answer before, you know, about which option or whatever? So that's really good. And it, it, uh, it's so easy, but people just don't think to do it. And they're just like, send the proposal and they're like, or they present the proposal and then it's like, let me know if you want to move forward. And then, you know, it's just open. It's too open ended. Yeah. Having a deadline is, is to compel a decision. If you never put a line in the sand, like you, you need to make a decision one way or the other, but this is your deadline for making a decision. They're just going to defer making the decision until whatever situation they're in is painful enough for them to prioritize this and they come back to you. However, many months later, just had one of our web designer academy students had someone come to her like eight months later, um, when they're fine, they're finally ready to prioritize this. And we don't, you know, that's great. Like she can work with her, but like we want a sales cycle that's shorter than that. So when you put a line in the sand, you, you compel the decision. And like you said, it makes it so much easier to follow up. I'm not being like, will you work with me? Will you work with me? It's like, Hey, I'm just letting you know that you have a deadline. Um, if this deadline, if it goes past this deadline, you've made a decision. So do you want the deadline to make a decision for you or do you want to make the decision for you? So good.

Shannon Mattern: And I never worked with like huge companies in my, um, in my day, but you know, there were times where I'm like, okay, well, what, by when do you think you can make a decision?

Final Thoughts and Resources

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Shannon Mattern: Okay, great. Now I'll write that down. That's the deadline. And I'm going to, um, follow up with you. And I always say never end an email, um, to a followup email or an outreach email with a period. It should always end with a question mark. And like a yes or no question and never start it with, let me know if, like just remove that. It just be like, would you like to move forward with this? Which option would you like to move forward with? Yeah.

Jonathan Stark: Like something, yeah, this is, this is closely related. This might sound like a different topic. It's a, it's a more general topic, but it applies heavily to sending proposals or just, just the sales cycle. Don't ask like five questions in an email because that is a homework assignment and you want, you want them to be able to reply with a number or a thumbs up or a thumbs down. No words. I'm not saying they will reply that way, but you end that email with a question mark that could be replied to just as easily with an emoji as a sentence. Just one question. The most important thing that you want an answer to. The other thing is you might not have a question. It might be one of these. I've had a couple, it's very rare, but I've had a couple of clients who were blocked, who had a project that was just blocking the thing that we were going to do. And it was just spiraling out of control. They were just, it was out of control. I wanted to work with these people. Um, but there was a long, it was a particular example of a month's long follow-ups, probably the longest sales cycle I ever had. And I didn't have a question for them really, but I did want to check in. And every time I, you know, Oh, it was just, you know, as promised it's I'm checking in on this date. Oh, can you believe it's been a month since our last project update, just checking in on that other project. And I'm going to check back again on date if I haven't heard from you. So I always plant that seed for the next email. So it's always like me keeping a promise and being professional and kind of managing them a little bit. So they don't have to worry about it. They know they're going to hear back from me. It's going to be on a date. And, and eventually that worked and turned into a ton of money, but yeah, I totally agree. And with a question mark, not just like it, but not thoughts never ended, never asked someone the questions thoughts, but yeah. So that's really, really good advice.

Shannon Mattern: I love it. When I was in corporate. And I was on the other side of the table, the buyer of a huge software initiative. I had the best sales team project manager ever who would... Because I had to get RFPs. I had to take them to the management team, take them to the board, all of that stuff. And they were like, great. Tell me when that management meeting is happening. August 15th. Excellent. They'd follow up a week before. Hey, are there any materials I can get to you in preparation for your management meeting on the 15th? Yeah, actually. And so it was like, they were right there with me, holding my hand to take this proposal to the stakeholder because they were very invested in getting it all the way through to the end. And they weren't going to just leave it to me. They were going to equip me. Can we come sit in on this and present for you? How can we support? Here's some cookies and pens. They were really excellent at those types of things. And so I learned a lot from just the good sales experiences that I had that then I was like, oh, you know what? I really hated this job. I wanted to leave and start my own thing. But I learned so much working there that I've been able to carry through with me and growing my own business and now helping other people with the same thing.

Jonathan Stark: Killer. Great. Well, I'm looking at the clock on the wall. We need to start wrapping up. So what's the best place for people to go to find out more about the matrix or whatever

Shannon Mattern: what you're doing? Yeah. ShannonMattern.com is the best place to go. So if you're any type of service provider, there's information about the package matrix. If you're a web designer, there's a link to go over to our Web Designer Academy site and learn more about that. But ShannonMattern.com is the place for all the things. Great. Thanks so much. This has been

Jonathan Stark: fabulous. I know people are going to get a ton of good information out of it.

Shannon Mattern: Thank you so much for having me.

Jonathan Stark: All right, folks, that's it for this week. I'm Jonathan Stark, and I hope you join me again next time on Ditching Hourly. Bye.