Episode 038: Value Pricing – How to keep your prices competitive with higher competition

Aired: 11/22/2016

We have all heard that anecdote about value pricing. The designer / engineer / etc. consultant invoices $10,000 for 20 minutes of work. The reasoning being that it was 20 minutes of work, but 10+ years of experience so they could accomplish what they did in 20 minutes.

With the WordPress consultant community growing every day, and more small businesses are moving away from WordPress to SquareSpace and Wix, how do you keep raising your prices in a market flooding with competition? How do you justify your price?

What is Value Pricing?

While I took a more “knowledge is power” approach to adding value to his price, both Maxime and Josh agreed that “Value Pricing” is more what you can bring to the business as a whole. Do you understand what they really need? When they say they want something, can you argue against it if it doesn’t match what they actually need? Those are the values they add to really help a business, and how they define “Value Pricing”

“If you are only looking for a developer, don’t hire me”

Says Maxime, who really takes the time to dig into the business of his clientele to learn what they need, what they have done, and how to improve their business to meet their goals.

“If you want me to challenge your business, challenge the solutions, challenge everything…I’m the right fit”

Continues Maxime, who really has a strong understanding for what clients he wants to work with, and how his value pricing really appeals to them.

“Strong Agreement”
Josh exclaimed jubilantly

“Its also about value to me”

Value pricing to Josh includes the value to Josh, meaning while “Value Pricing” may alter up or down based on what Josh can get out of it. Something I’ve never thought about before, but actually do in practice consistently. As I said,

“I discount a good challenge”

Do you need to stay ahead of the curve? Do you charge to learn?

You don’t have to stay ahead of the curve. There is definitely a business plan around constantly being ahead of the curve and knowing the new and greatest things, however you do not need to.

Absolutely charge for learning, I charge even if it is something I want to learn, I charge double for things I don’t want to learn. Always keep in mind that being a developer or a web expert allows you to learn a little more efficiently since you have a base knowledge. This efficiency means you will learn whatever it is quicker than the client, but it still takes your time. Yes you may discount it for a technology you want to learn anyway, but it is still going to take time that you should be billing for. Want to learn? Check out our “Level UP” series.

How do You Use Experience to add to your consultant price?

The more you work on websites, the more you learn, and the more you can justify charging more, simple!

Well there is more to it than that. Think about the quick, semi-easy brochureware websites that we think gauge in the $1,000 range. As Josh said, developers or consultants who work on these need to be as efficient as possible to make sure they aren’t wasting or losing time to keep the hourly at a good rate. On the other hand, someone charging more per hour can afford to mess up on a piece of a project and do it over, knowing that they charged enough to cover the time lost on the re-do.

As a developer I relate heavily to the second part of that, I charge a lot but then don’t re-charge when something doesn’t fit quite right, or I need to spend extra time re- tweaking something. I know I have enough wiggle room in my hourly to be comfortable so that when things do come up, I can go and do them.

How do you say competitive with the competition

It isn’t easy to stay competitive in today’s market, people are constantly starting their own freelance business or learning new things to try and compete to get the same clients. What you bring to the table as far as expertise to their business can really set you apart.

“I do not compete with lowballers, I do not compete with them on pricing and I don’t compete with them on the work they do”

Said Maxime, who really does bring more to the business, he only looks for projects that need expertise, not just a developer or someone to put a solution together with duct tape

“If you’re looking at your website as an expense, I mean there is nothing I can do for you…”

Preach it Maxime.

 

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