#282: Are You Lowering Your Fee to Get in The Door?

Welcome to the High Income Business Writing Podcast, helping you propel your writing business to a whole new level. And now, here's your host, Ed Gandia.

Hey there. Welcome to another episode of the High Income Business Writing Podcast, the number one podcast for business writers and copywriters who want to earn more and less time doing work they love for better clients. With over 1 million downloads from listeners just like you across 101 countries, a very common strategy writers use when trying to get in the door with a new client is to price the work relatively low, sometimes even very low. Maybe the prospect drove a hard bargain, or maybe they didn't do that at all. But you assume that you'd have to go low in order to land a deal. And either way, the hope is typically that you'll be able to get in there. And once you land the client and that client sees the quality of your writing and how great you are to work with, they'll be open to higher fees on feature work. But the truth is, this strategy never works. Sure, with skill and with planning, you might be able to get some clients to accept an occasional price increase. I teach a number of ways to do that when I'm working with coaching clients. There are ways to do that. There are effective ways to do it, but it's still an uphill battle considering the marginal income boost it will give you. The fact is that there's a natural human resistance to price increases. I mean, think about your personal life, and it does carry into the business world as well. You know, Netflix raises their fee from $15 a month to $17 a month. $2, and the world goes absolutely nuts. Who do they think they are? $2? That's insane. Okay, so we lose perspective very, very quickly, especially with something like a service like Netflix. The amount of content that's in there, is it worth another $2 a month? I mean, you have to be the judge. But people get very, very irrational when they see price increases. And the problem here with your work is that if you start low with the hope that the client will easily agree to higher fees down the line, you're going to be very disappointed. Not only that, but when you charge lower fees, you're communicating to the marketplace that pricing is your competitive advantage, that low fees are your competitive advantage. And that's always a losing strategy. Now, it might work for businesses like Walmart, but you're not Walmart and you should never compete same way Walmart does. There are much better approaches to getting in the door with a client. So don't fool yourself into thinking that a short term win, meaning landing the client, will lead to a profitable long term relationship. Because in most cases it simply won't. Of course, that's only one problem with getting in the door with low fees. There are other serious problems when you take this strategy. So let's talk about some of them because I find that this is such an emotional issue for most of us that the deeper you understand the dynamics, the better equipped you'll be when making pricing decisions. Okay, so you need to understand the problems with this thinking at an emotional level. That way you can make the right decisions at the right time. So low fees attract problem clients. That's another huge problem. They really do. I want you to think about if you've ever solicited quotes from contractors for a home improvement project in your home, and let's say you got three quotes and one company came in way lower than the others, what was your reaction? I know in my case, my first reaction is not joy, it's concern. It's like, why? Why are they 40% cheaper or 30% cheaper? Something is wrong. There's okay now, I don't know what it is, but immediately my reaction is negative, not positive. I don't get excited, I'm worried. Clients who jump at your low pricing are too often problem clients. I mean, again, if their reaction was positive instead of negative, that should make you wonder. In many cases, I find, in fact, I would say in most cases, they have unreasonable expectations. I want you to think about if some of your most nightmarish clients ever were you charging premium fees. I bet you weren't. I bet those are your clients where you're charging the least. These people complain when you won't do more work for the same or lower rates. They constantly bombard you with questions and requests. They continually push the boundaries. They want you to do rush work all the time. They have a ton of revisions. Just overall, they're a pain to work with. On top of that, they usually are slow pay. They delay payment as long as possible. Which leads me to the next problem with quoting low fees as a way to get in the door, which is that low fees repel or scare off high quality clients. Again, for most high quality clients, low fees are a red flag. For bad clients, they're a positive thing again. But if you're dealing with a good client, they see a low fee as a potential red flag. It shows a lack of confidence in your work and raises questions about your abilities. As a result, you just scare them off before the conversation even starts. Before you can really get into a deeper discussion. Especially if you're doing this over email, which I never recommend if you're having the conversation, if you will, about their project over email instead of having a zoom or phone conversation. Now, higher fees alone don't automatically attract better clients, but it's challenging to attract better clients with low fees. That's really the key point there. Low fees also attract low commitment clients. Because clients who say yes to low fees typically don't see the value in what you bring to the table. Instead, they see your services as a necessary evil. And they think that any other writer, copywriter, or marketing consultant could do the job just as well as you. So they treat you like a commodity, which means that there's little to no loyalty. If a better deal comes around, in many cases, they'll drop you in a second and go for the other provider. They don't value quality. They don't value your skills, experience and expertise. What they do value is their pocketbook. The next problem with getting in the door with low fees is that low fees lock you into a dangerous cycle. Because when you charge low fees, you start thinking differently about yourself and your value. You start seeing yourself as a lower value resource, maybe not right away, but over time. And that will negatively impact your psyche. And then it starts showing up in conversations with your prospects. You have lower confidence and it shows. And that in turn keeps you at a lower pricing level. It's just a negative spiral that doesn't end well for anybody. And once you're stuck in that spiral, in that cycle, it's just very difficult to get out. It just becomes your new reality, little by little by little. Finally, low fees means that you have to work harder when you're competing on price. You need more projects, more clients to earn a decent income. And I see this all the time. Sometimes I get folks who come to me for coaching and I'm asking them some questions about what they're charging and what their typical projects consist of. And very often see people who are working 60 hour weeks doing a bunch of $100, $200 projects, you know, to make a good living. 7, 8, 9, $10,000 a month based on very low fee work, low price work that requires an incredible number of projects, that takes up an incredible amount of headspace. That's exhausting. Managing clients comes with some fixed costs. So the more clients you have, the more projects you have, the higher your fixed cost, if you will. You know, there's a certain amount of, again, headspace, creative energy, just mental energy. Required to manage a single project and a single client. Multiply that by 12, 20 and it's insane. I mean, you will burn out. You'll have to spend a lot of time trying to land new clients and projects just to be able to meet your income goals. So it just, it keeps you stuck in that cycle and that will just put you on the express train to burnout town. So, so the question remains, are there scenarios where it does make sense to get in the door with low fees? And there are, I have to admit that. But those are rare exceptions. I want to emphasize that rare exceptions. Here's one of them. Let's say you're launching a new service and you want to test it out with an existing client. The value proposition is simple. You're being honest about the fact that you're experimenting here and you'd love to try it out on them, and you're discounting the service by a huge margin in order to make it an easy yes for them. So why do this with an existing client or existing relationship? Well, that's because there's typically a lot of trust there already. You have a good relationship, you can speak honestly, so you can be honest about what you're trying to do, why you're doing it, and they'll know you're being completely transparent about the situation. So in those cases it can make sense to get in there. But it's a one time thing and you're explaining and you're justifying your pricing and why you're doing it this way. Another exception, when you think about it, it's very similar to the one I just mentioned is when you're starting out as a freelancer, the early days at those stages, the early days of getting your business off the ground, it's all about buying lots of lottery tickets. You're just trying to get out there and trying to get a bunch of at bats. And it's about saying yes to everything, okay? Because you don't know which lottery ticket is actually going to hit the jackpot. So if you need to do it with low fees, if you need to do, especially the first two, three projects, if you need to do them pro bono, I'm all for that as long as you know why you're doing it. But you need to get out of that cycle very quickly because as you grow, instead of saying yes to everything, you need to be much more selective about what you say yes to. In fact, you should be saying no to a lot of things. But again, that would be the only other. Well, it's not the only other, but it's another common exception. But again, I want to emphasize this. These are exceptions, and I don't want anyone thinking, well, okay, well, what about this one? It sounds like it could work as well. Eh, probably won't. I would automatically assume that if you're thinking of something that could work that doesn't fit the mold of the ones I just gave you, probably a bad idea to get in the door with low pricing. All right, so, you know, you get in there with premium pricing, and then you think you're going to land this deal, but then you don't. And when you follow up with a prospect, you find out that you've lost the project to a cheaper competitor. What do you do? You know, what does that tell you? What do you tell yourself when that happens? That's really, really important. Because, you know, it's not just about being brave and quoting higher fees. It's about how to deal with the setback, if we want to call it a setback, how to deal with losing an opportunity that you finally mustered the courage to quote higher. And then you don't get it. And you don't get it because the client tells you that your fee was too high. What do you do? I know. That's the kind of news that will often make us wonder if maybe we overdid it. If we're pricing our services too high. In many cases, imposter syndrome will kick in at that point. And that nagging voice inside our head will start with the negative questions. Ah, who do you think you are pricing that work as high as you did? You shouldn't have listened ahead. You're not as good as you think you are, and the prospect could tell you're not worth those fees. That's why they went elsewhere. Or maybe you'll start hearing really negative stuff like you're a fraud. And this just shows that prospects are starting to see that. I've seen this many times before. Listen, I'm not immune to the imposter syndrome. We all struggle with this at some point. It's not about getting rid of it. I've said that many times before. It's about knowing how to manage and tame and control that voice. But it bears repeating because this is the sort of message that requires repetition. So I'm going to say something is very important and it's, look, we all question our value. We all question our pricing decisions, myself included. And all it takes, honestly, is one or two prospects going elsewhere under the guise of lower fees for us to Question ourselves. So here's what you need to hear from me, okay? This is important. If a prospect goes elsewhere because they found someone to do the work more cheaply, that's not on you. It's on them. So let me say that again. If a prospect goes elsewhere because they found someone to do the work at a lower fee, that's not your fault. That's not on you. It's on them. Now, of course, this assumes something very important. It assumes that you qualified them well and assumes that through that qualification process, you understood their objective and had some idea of why this objective was important. It assumes that you did your best presenting yourself and your value, that you show them what you bring to the table, what makes you different, why those differences would matter to them. This is important because that's what gives the right context to your fee. Okay? A fee is just a number. So without the context, it's going to be difficult for the client to understand why they should pay you more than they should pay the other guy. Thomas Keller, the owner and famous chef of restaurants like the French Laundry in Napa Valley, I'm sure, does not get offended when someone looks at the their prices and decides not to eat at his restaurant. He's not apologetic about the fact that a party of two will easily pay 600, $800 or more, not including gratuity, to eat at his restaurant. There's a time and a place for a $5 hamburger, and there's a time and a place and an audience for an $800 meal. Neither is good or bad. Neither is right or wrong. It's all about the context. So if someone turns you down because they want to pay less, that's okay. There are plenty of others who will pay your fee based on the context you provide. So don't budge. Don't question your worth. Stick to the plan. Along with that, there's something very important you need to understand, and that's the fact that you simply can't close an opportunity that's not closable. You might want it really bad. This might be like, oh, my God, the best thing ever, and I need this. You know, you might be so attached to it that you absolutely have to land the deal. But look, if it's not closable and you insist on trying to close it, meaning, like, bring it in, you'll almost always regret doing so. Remember, the goal is not to score every time. This is not a soccer match. You're not trying to land every deal. The goal for you is to keep moving the ball. Downfield. As you're discussing the opportunity with a prospect, with a client, you're just trying to move the ball downfield. And if at any point it doesn't make sense to keep doing that, for whatever reason, you start seeing that this is not a match. The expectations are unrealistic. They don't really understand value. You're worried about how they're thinking about whatever it might be you need to walk away. The goal is just to keep moving the ball downfield until it doesn't make any sense to keep doing that. The other thing to understand and keep in mind is that there are three pieces of intel that you must walk away with at every discovery call. Now, sometimes, and this might be the case in many of your scenarios, you're just not going to be able to make it work. If all the prospect or the client is seeing or focusing on is price, is your fee, that means he or she sees you as an equal to another writer, to all the other writers. And that's where understanding why they decided to contact you, which is one of the questions I urge everyone to ask a prospect early on in the conversation. Hey, how did you find out about me? Why me? Why did you reach out to me? That's where that comes into play. As well as knowing more about the nature of their challenge. Okay, what's bothering them? What are they trying to solve? What are they trying to overcome? What are they trying to do? Because if you know their challenge, if you know their goals, then, and if you know that this is something that's best solved or dealt with by a writer with your specific background, experience, knowledge or perspective, you can then make a case for yourself, or at least a much better case for yourself. You can also highlight why going with someone else who doesn't have that kind of experience or expertise is a riskier proposition for the client. Sure, they might be cheaper, but what will end up costing them at the end if they go with a cheaper person, the cheaper resource. Now, if that doesn't work, then winning the deal is going to be an uphill battle. If you can't get the prospect to understand that, it's going to be very difficult. You could try and see if stripping down the scope of work will help, sometimes by offering to do less work for less money. So just again, narrowing down the scope of work, reducing what you'll do, you'll be able to secure the job. But I found that with prospects who are just looking at the number, that's difficult to do because in their mind they feel like they can get the whole scope of work for a lower number from someone else and they're just not going to be able to let go of that thought. Now, I'm not saying or suggesting you should give up in situations like this where you forgot to talk money during the discovery call and now the prospect is just comparing numbers. I would still try to better understand why he's trying to compare apples to oranges, especially if you get the opportunity to have a discussion about your pricing. Because in situations like this, it might be that the prospect just thinks that the writers are the same and then it just came down to price and maybe they just didn't understand your value proposition. But again, you need to step back in all these situations when it starts becoming hard. And you need to decide how hard you're going to try here and when and where you're going to draw the line and when to walk again. When are you going to stop trying to move the ball downfield? Because, and I'll say it again, you can't close an opportunity that's just not closable. So look, the bottom line is this. First, don't use low fees to get in the door with a client hoping that you'll be able to raise them later. That's a fantasy. Next, don't look at losing a deal as your problem. If you've scoped out the work and presented your fee as a high value proposition, you've explained why you're the best person for the job and why you're going to be able to help give the prospect exactly what they need, then the prospect was either not a good fit or you'll need some more practice qualifying opportunities more effectively. That is, of course, if after doing all that, you lose a deal. It could also be a positioning problem. Like I mentioned, maybe you didn't present your value well. Maybe you're not presenting yourself well in the best way possible in your conversations, on your website, in your quote or proposal. But at the end of the day, even when you do everything right, some prospects are simply going to go with somebody else. And that's just the way it is. That's just life. So don't beat yourself up for that. And don't tell yourself some story that if you had priced it lower, and that's the key point I'm trying to make here, don't shift the thinking back to something that's not going to serve you, that, oh, if I had priced it lower, the deal would have been mine. That's fiction and it's counterproductive and finally accept the fact that some opportunities are simply not closable. The sooner you recognize that fact in the discovery process, the better off you'll be, because you'll be able to disengage before you waste a lot of time thinking about and quoting the project. Well, that's it for today. I hope you enjoyed this episode. And just a quick reminder to grab your free copy of my latest book, Earn More and Less time the Proven Mindset, strategies and actions to prosper as a freelance writer. You can get your free copy@b2b launcher.com where you'll also find the detailed show notes to this and to all my other episodes. Enjoy and have a great rest of your day.