Pricing Is Branding – Using the Psychology of Pricing to Attract Better Clients & Shape What They Believe About You
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In Episode #4, Austin L. Church takes you back to April 2009 when he first started his freelance journey. Two weeks after getting laid off from his job at a marketing agency, a potential client named Andrew asked Austin this question:
"What do you charge?"
He chose $40 per hour as his rate because his agency had billed out his time at $85 an hour. If he charged half, then maybe clients would feel like they were getting a good deal.
Does that describe you now? Are you one of the many freelancers who think clients only want a good deal?
Chances are, you're charging less than you could be.
This episode will give you the chance to ponder your current pricing, identify your mental traps, and start upgrading your limiting beliefs.
To get paid what you're worth, you’ve got to take your head trash to the curb.
“When you’re in a vulnerable moment, you really appreciate people who don’t take advantage of your vulnerability – but instead take that opportunity to elevate you.”
“When you’re coming out of any type of job where your work has been commoditized or devalued, you may have already gotten into the habit of devaluing your work yourself.”
“You’ll find it easier to build a profitable business with value-focused clients who will like the quality, experience, and professionalism you deliver.”
The Great Recession and My Journey Into Freelancing
April 2009. That is when I first started my freelance journey. And it wasn’t by choice.
I got pushed forcibly out of the 9-to-5 nest when my boss called me into his office and let me know that I no longer had a job.
Just to give you a quick history lesson…
This was 2009 when a lot of the recession in 2007 and 2008 was starting to become evident. A lot of people had known about the recession for some time but the trickle-down effect was starting to hurt marketing and digital agencies.
I couldn’t really blame my boss. I couldn’t really be upset at him. He was just making a business decision. But that suddenly meant I was out of a job.
And to make matters worse, I had only $486 in my bank account.
That number seared into my memory because when I actually looked at my bank account, I freaked out thinking I’m so stupid. I’ve made more money than this, where is that money now?
You have that moment where you are beating yourself up when you shouldn’t be beating yourself up. You should be proactive. You should be pounding the pavement looking for your next job. But my head was just spinning.
I packed up my things, went home, and got to soak in all of that uncertainty over the weekend.
Learning About Value-Based Pricing From an Unlikely Source
Fast forward a couple of weeks later...
I got a meeting through a mutual friend with an agency owner named Andrew Gordon.
I was thrilled because it’s not like I had a lot going on, right?
I had plenty of time on my hands and the idea of having a meeting, any meeting, with someone who could potentially pay me to do some writing work for them, was a very exciting prospect.
Anyway… Andrew had asked me to bring my writing portfolio with me.
How cute, right?
I had 6 months of experience working at an agency. Before that, I had taught high school English, gone back to grad school, and had gotten a master's in Literature with a focus in creative writing. My thesis was a collection of my poems.
How cute that this little writer showed up with his portfolio – which I actually printed out.
So I get into Andrew’s office. He was nice and did his best to put me at ease but I could just feel all that energy and adrenaline in my body. I was jittering having these thoughts:
- “I really need this to work.”
- “I really need something to happen here.”
- “I really need some money.”
- “I’m desperate.”
I sit across from Andrew watching as he thumbs through my portfolio. And if you have ever been in this position, you know it is agonizing watching someone else review your work.
I’m sitting there with my legs crossed trying to feel some semblance of professionalism.
Andrew nods his head, looks up, and asks me the question: “What do you charge?”
I thought “Oh, here we go.”
I was maybe 2 weeks into freelancing at this point. In terms of what I charge, there was a rate that I gave my old agency – $40 an hour – to finish some projects for them that I was in the middle of when I got laid off.
But I would have taken $10 an hour. I would have taken $15 an hour.
I did not know what the “going rate” or competitive market rate was for copywriting.
Again, I was desperate.
But because I had already thrown out $40 an hour to my old agency principal, that’s what I told Andrew.
He nodded, thought about that a little bit, and said, “Can I give you some advice? Your work is actually pretty good but at $40 an hour, you will not be taken seriously in larger markets like Atlanta, Charlotte, and DC. So if I were you, I would raise my rate to $75 an hour effective immediately.”
The Most Important Lesson I Learned From This Experience
Andrew Gordon surprised me.
I don’t know what I thought he was gonna say but I was gobsmacked. I was shell-shocked. I thought he was gonna try to negotiate me down.
Again, I would have said yes to anything.
I think when you’re in a vulnerable moment and you know how vulnerable you are, you just really appreciate people who don’t take advantage of your vulnerability but instead take that opportunity to elevate you.
I now call that experience with Andrew The Golden Suitcase because he, in effect, loaded a suitcase full of gold bullion and pushed it across the table to me.
That’s how valuable the advice was.
Here's the lesson: Pricing is branding.
When you’re coming out of any type of job or project where your work has been commoditized or devalued, you may have already gotten into the habit of devaluing your work yourself.
You try to compete based on price, not based on value. You try to give people a good deal. You think that what clients want is a good deal.
You think that everybody’s primary motivation is saving money, so if you want to get a project and you quote a price of $1,000, and the client says “That’s too much”, what do you say?
“How about $750?”
Because isn’t that what everyone does – you come down on price when the client pushes back?
Andrew helped me realize that there are other people who are value-focused, who think in terms of Rolex vs Timex. People who are not just thinking about how to save money or how to get a good deal.
They’re thinking about value. They’re thinking about quality.
If I were to charge $40 an hour in some of the larger markets in the southeastern United States where I live, I’m sending out a very weak signal to people who want high-quality work, to people who want their freelancers or consultants to be confident.
I’m suggesting that:
- I lack confidence.
- I lack experience.
- I lack expertise.
- I lack talent.
Here I was thinking that Andrew was going to negotiate me down because he just wanted a good deal. But he looked at a fledgling copywriter and said,
“No, you’ve got the talent but your price needs to send a signal to match the level of talent that you have.”
Price-Sensitive vs Value-Focused Clients
Pricing is branding.
That pricing is branding lesson is the golden suitcase because now, 13 years later, I look back and think, “How much money did Andrew Gordon make me that day when he taught me that if I want to have really strong positioning as a freelancer, I cannot afford low rates?”
I can’t afford low rates because low rates send the wrong signal. They will attract the wrong type of client for me rather than a value-focused client.
You’ll find it easier to build a profitable and sustainable business with value-focused clients who will like the quality, experience, and professionalism you deliver compared to price-sensitive clients who, if they find a lower price elsewhere, might say “It’s been nice knowing you but I can get it 20% cheaper down the road.”
What Signals Are You Sending With Your Prices?
Pricing is branding.
Are you positioning yourself as the capable, premium, talented, professional, thoughtful, brilliant option?
Or are you blending in because you believe that competitive prices will help you grow your business?
Juicy offers, strong positioning, and value-focused clients, that’s how you grow your business. Not competitive pricing.
If you do nothing else, follow the advice Andrew gave me: raise your prices.
Links and Resources from this Episode
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