3 ways to earn more money from client work

work smarter

“Mainly, the thing working against us is fear. We’re afraid that if we charge too much, it’ll backfire and we’ll lose clients. We’re afraid that we’re not as good as we think we are. Or worse, that others will see right through us and realize we’re frauds.

The other obstacle is that we only want to focus on the work. Raising rates and negotiating pricing? That’s for sleazy salespeople. But counter intuitively, pricing has everything to do with the work. You pour your time and energy into work that you can be proud of — work that can make a difference. So it is in service to your talents and the work that you maximize the value you receive.

Never forget: Clients are looking for someone to help them solve a business problem and they’re more than happy to pay top dollar when you help them solve that problem. Not to mention that charging a fair price teaches them to value you and your work.

Ok, so how do we get there?

1_Master the art of up-selling

Up-selling lets you make more money by providing clients with additional services. It creates a win-win situation, but only if you’re willing to take the initiative and ask. Up-sell only natural extensions to your service, not unnecessary add-on products. A lot of people try to up-sell unrelated services, which make their proposals longer and clients hesitant. Smart up-sells —like a logo redesign to complement a homepage redesign— point out needs clients hadn’t even anticipated themselves.

Don’t present your clients with too many options. Sheena Iyengar, a professor at Columbia University, conducted a study at Draeger’s Supermarket on two consecutive Saturdays. On the first Saturday, she set up a tasting booth offering 24 choices of jam. Only 3 percent of the shoppers who tasted jam made a purchase. On the following Saturday, Iyengar set up a booth with only six choices. This time, 30 percent of the shoppers who tried the jam made a purchase.

The same goes for up-selling. We recently conducted research of over 25,000 estimates and proposals. That research revealed that up-selling with just one or two options converted the best. Additional options decreased conversion rates.

Finally, resist the temptation to up-sell in your initial conversations with clients. Up-selling at the point of decision – when you present your services and price within a proposal – is ideal. Up-selling in your proposal doesn’t pressure clients like up-selling right away does, and it gives them complete control to accept or reject your recommendations.

2_Make your competitors’ prices irrelevant

When you go shoe shopping, you have a general idea of what you expect to pay. Unless you’re shopping somewhere like Gucci, seeing “$795” on a price tag would probably make you run for the exits.

Your potential clients do this too. Dan Ariely calls it “arbitrary coherence”. Making past purchases (or seriously considering purchases) influences how similar decisions will be made going forward. Understanding how this works is the first step to avoid getting lumped together with bargain-basement competitors in your potential clients’ minds.

“Similar” is the key word here. Arbitrary coherence only kicks in when the decisions are close enough in the prospect’s mind to trigger the previous price point. Starbucks customers don’t use Dunkin’ Donuts prices as anchors to consider how much coffee should cost at Starbucks. Why not? Both sell coffee, but each business creates a completely different experience. Dunkin’ Donuts is a blue collar, hurry to work place. Starbucks is a nice environment to lounge and relax.

Crafting a unique experience for your clients can make your competitors’ prices irrelevant. When you start out, you may be tempted to emulate the language of more established players, but check their price point. Do everything you can to create a distinct experience from people charging less than you.

One of my favorite examples is the proposal process. Take a close look at what lower priced competitors do when someone asks for an estimate. What does that experience look like?

Maybe, you see that it’s something like this:

  1. Client submits web form asking for a price estimate
  2. There’s a brief email exchange nailing down project requirements
  3. A quick price estimate is given through email

Compare that to higher-end competitors:

  1. Client submits web form asking for a price estimate
  2. A brief client questionnaire is sent back and minimum budget expectations are set
  3. Email exchange and/or phone call to nail down business objectives and project requirements
  4. A professional looking proposal is sent for approval

For high paying clients, the proposal process of higher-end companies is more inline with what they expect.

Look at everything from messaging on websites and emails, to the way they position their services.  You’ll avoid preconceived notions of what your price should be and make clients more receptive to paying what you’re worth.

3_Use persuasive words to command higher rates

One tiny word can make the difference between winning and losing a client. In a Carnegie Mellon University study, Professors Scott Rick and George Loewenstein tested phrases to describe a fee associated with shipping a DVD box set by overnight delivery. Here are the two variations they tested:

  • “A $5 fee”
  • “A small $5 fee”

Just by adding “small,” the second phrase improved the response rate by 20 percent. Pay attention to how you word your estimates and proposals. Using words like “small,” “minor,” and “low” might not seem like a big deal to you, but they matter enough to clients to justify higher rates.

If your proposal offers “Design Services” and a simple price quote, you aren’t separating yourself from your competitors. You blend into the pack, which increases the likelihood of clients relying on price anchors set by lower-priced competitors and rejecting your bid.

Reframing your services as solutions to clients’ problems helps them focus on the value you can deliver instead of the price. “Increasing Customers Through a Redesign” is more persuasive than “Design Services”, and is more likely to justify higher rates.

“Rebranding for Company” doesn’t demand top dollar like “Rebranding to Enter Billion Dollar Market” does. Or if their goal is to double online leads and they want a new design to help accomplish that; instead of “Website Design for Company” you’ll be a better match if you say, “Doubling Online Leads with a Website Design”.

You’ll also want to make sure you use the most persuasive words you can. What are the most persuasive words a client can read? Their own words.

Use the client’s own language when describing what you’ll do for them. This can be a very powerful technique if you’re using words that have a lot of energy behind them.

You can do that by asking the following two questions:

  1. “What’s the biggest concern you have with this project?”
  2. “What’s most important to you about the person/company that you hire?”

Listen to their answers and pick up on the words that they use. For example, a client may answer: “We’re looking for a reliable company. We had a terrible experience with another company. They kept missing deadlines and our project kept being delayed”.

From that answer, you’ll get a better idea of what they’re looking for, and you’ll have several persuasive words you can use in your estimate or proposal (reliable, deadlines, and delayed).”

Ruben Gamez founder of Bidsketch (a web app that helps freelancers create professional looking proposals in minutes)

posa un antropòleg a la teva empresa

personal thoughts

S’ha descobert que a l’hora de decidir qualsevol cosa, la cadira on seus -si és més dura o més còmode- influeix molt més del que a priori es podria pensar. I tot es deu a que el nostre subconscient té un paper molt més destacat del que es creia fins ara en la presa de decisions.

A la llum d’aquest descobriment, si jo tingues una empresa que fabriqués productes en massa no dubtaria gens a contractar un antropòleg per així poder comprendre millor el comportament dels meus clients i usuaris.

20 business lessons you don’t want to learn the hard way

work smarter

“Here are 20 reminders that just might save you a headache:

  1. You can’t do everything on your own. Building a team is essential because there are only so many hours one person can devote to a business. Exactly when you reach that limit depends on your other obligations. If you’re a young single person, you might be able to do everything for a year or two. But if you have a family, your dedication will eventually hurt those relationships. Build a team that can carry on when you’re not around.
  2. You may think your product is perfect, but your clients won’t. Listen to user feedback: Your opinion may not be the best one. The key takeaway here is “release your product early and release it often.” You won’t know if you have a great product until it’s in the field and users are beating it up. It’s like some of the contestants on American Idol. They think they’re talented, and their friends and family think so, too, but when they get on a bigger stage, their flaws become obvious.
  3. Do one thing really well. Entrepreneurs try to be everything to everyone, but it’s hard to be the store that sells bait and baby toys and vintage Beatles albums. Specialize, and you can charge for what you do provide. That said, if there is a skill or service that would make your core product better, provide it.
  4. Get paid before you hand over a project to a client. This is especially important if you provide a service. Once you turn over that contract or website or design project, you won’t have much bargaining power. When I was a graphic designer, I watermarked all my projects and hosted websites on a private domain until the bill was paid.
  5. Undercharging is not sustainable. You think, “I don’t need to charge $150 an hour, I can charge $70 and make way more than I was making as an employee!” But you might find out a short time later that your “great” rate is unsustainable. By the time you pay taxes, employees, business licenses, insurance, etc., that $150/hour is looking more realistic. Compete on quality, expertise and your niche focus (see #3) instead of price. When competing on price alone, the clients who are price-shopping will always leave for the person or company that undercuts you.
  6. Patience and flexibility help you survive the lean times. ShortStack started out as a side project at my web and graphic design studio. We weren’t a software development studio, but when a client asked us for a software product, we didn’t say no. We were patient, scaled slowly — partly out of necessity — and it allowed me to build with company without debt.
  7. Build for your actual market. All of my software-building experience so far has been in answer to a demand. It is purely opportunistic. If you’re an app developer and you think “Wow, I think xx industry could use xx,” you might be disappointed. Put another way: I would never start a restaurant without having worked in one…for a long time!
  8. Never enter a partnership without a buy/sell agreement. No matter how well you think you know someone, you just don’t know when he or she will want to retire or do something else. Even if it’s on amicable terms, know how you can get rid of one another when it’s time for one of you to move on.
  9. Be grateful. Appreciate loyal customers who show you there is a demand for what you do. There is no dollar amount you can put on brand advocates. Good will translates to loyal customers.
  10. Look after those who look after you. We offer referral commissions at ShortStack, but it’s very much under the radar. We want people to recommend the product because they like it, not because they’ll say anything for a dollar. If we notice someone said nice things about us publicly, we might send them a t-shirt as a thank you. If they do it again and again, we might say, “Hey, you should become a referrer and earn a percentage of the business you send our way.”
  11. It’s not a sale until it’s paid for. This sounds obvious, but I’ve known small business owners who get very excited about orders and/or meetings with prospective clients. But until the money for those products or services is in the bank, it doesn’t count.
  12. You’ll make more money being “wrong” than proving you are right. Rather than fight with an unhappy customer and say, “You’re using it incorrectly,” or “You don’t know enough CSS to use our product,” we just refund their money. In the long run, these people consume so much of the support team’s time and energy that it’s more cost effective this way. They’re not our ideal client, and that’s OK.
  13. People don’t leave companies — they leave management. This lesson goes for both employees and customers. A manager will lose staff if the employees think they’re not being listened to or valued. Customers will stop using your products or services if they are dissatisfied with them. The quality and reliability of your products and services is a reflection of management.
  14. The way you present your business should be a reflection of your audience. If you have serious clients, be serious. If you have hip, fun-loving clients, have a sense of humor. You have to find your niche and build your content to suit them. For example, Constant Contact and MailChimp do essentially the same thing, but their marketing content reflects very different client bases.
  15. Agree on scope in advance. Have a clear contract before work begins. Once a project goes beyond the documented plan, charge for it. If you agreed to build a website with 10 pages, but soon the site is 20 pages, the client should pay you for them. If your contract makes that clear at the outset, it is easier to control scope creep.
  16. If your company sells a variety of products, make sure you know how to use/operate every single one of them. It might sound like a tall order — depending on how many products your company sells — but learning to use what your company sells will help you look at things with fresh eyes.
  17. When you think you’ve tested your product enough, test it some more. Never release a product until it has been tested and tested and tested by people who don’t work for you.
  18. Understand how social media networks work. When Twitter was first available for businesses, I’d see people use it like an ad in a newspaper. If you go on a channel and use it the wrong way, it could do more long-term harm than good.
  19. Save up. You can operate at a loss for a number of years but you can only run out of cash once. Have a rainy day fund that has at least two or three months’ operating costs in it. And have a line of credit available, even if you don’t plan to use it. Having a CPA look at your books once a quarter is also a must.
  20. Always let the CFO pay for drinks. Cheers!”

Jim Belosic co-founder and CEO of Pancake Laboratories

l’enunciat de la missió corporativa de JMDM

personal thoughts

“Treballar cada dia per fomentar la cultura del disseny, obrir mentalitats i despertar inquietuds, aportant coneixements i experiència per crear un món millor on tothom hi surti guanyant, sumant nous clients i nous reptes que impliquin conèixer gent interessant i apassionada de la seva feina, i aprendre coses noves.”

JMDM  |  Jaume Mitjans Design Management

tothom és usuari

personal thoughts

En el món empresarial es tendeix a parlar de clients o consumidors en comptes d’usuaris, donat que no només es tracta de qui paga els productes o serveis, sinó també de qui en treu profit (que no sempre és la mateixa persona). Però també hauríem de tenir en compte a tots els intermediaris que participen directa o indirectament en la venda dels béns, com són els transportistes, els majoristes, els detallistes, etc., ja que, de fet, tota la cadena és l’usuari.

innovació

quotes

“En moments de crisi cal pensar en ajustos i predicar austeritat. No obstant, hem de parlar més d’innovació i de com servir millor a clients actuals o potencials; és més barat, és positiu, il·lusiona a tots i, a més, acabarà tenint un major i millor efecte a llarg termini .”

Jordi Canals professor de l’IESE