This Should Be Every Writer's Pricing Strategy

This should be every writer's pricing strategy. You should avoid the middle. You should either be very cheap or very expensive relative to the tier that you're in, depending on what product or service you're selling. So today, what I'd like to walk you through are the different business models that work best for writers and how much you should charge, depending on which business model you pick and how to think about pricing. Because what I found is that most writers, when they sit down to come up with, how much should I charge for my service? Or how much should I charge for whatever digital product I'm trying to sell, their pricing strategy is effectively to sit back in their chair, close their eyes, wait for a random number to pop into their head, and then they go, that's how much I should charge. Or what most people do if they don't just randomly come up with a number is they look around at all the other people who are charging whatever they're charging for their product or service, and then they go, hmm, I should probably just do that, but maybe do a discount. And both of these are really, really bad ways to think about pricing. And so what I want to walk you through, it's a really easy hypothetical example. But I see this happen in every single industry. Whether you're a freelance writer, you're an editor, you're a project manager, you're a designer. Everyone makes the same mistake. So I'm going to walk you through this example that shows how and why the business model that you pick has such a drastic impact on your earnings. Almost nothing else impacts your earning potential as much as the business model that you pick and how you choose to monetize your knowledge, whether, whether it's through a service or a product, it's the value of your value. And so, hypothetically, let's say you're an editor. I was thinking about this the other day. Let's say you're an editor. You've been working in journalism for a long time, you have a great skill set, you have some credibility, you've worked for some major publications, you're really, really great at editing, you're a proficient writer, but you would call yourself an editor. Okay, well, here are some different ways that an editor, for example, might monetize the value of their value or the knowledge that they have. So the first one is, maybe you would just charge people hourly. You go, hey, I'll edit whatever you need. You want me to edit your book, you want me to edit a white paper, you want me to edit new company documents, my hourly rate is $100 an hour. I'm happy to edit whatever you want or need. Well, this is something we talk about in our premium ghostwriting academy all the time. If you are charging per hour, stop. Effective immediately, you should stop charging per hour. Because the problem with that business model is you are tying your earning potential to time and effort. So you only make more money when you work more hours. And you essentially aren't being rewarded for creating efficiencies, right? Because if you get the work done in half the time, you make half as much money, which is a huge problem. And then on top of that, whenever you anchor yourself to per hour, the problem is, for the customer or for the client, they associate that hourly rate with every other person in their life that also has an hourly rate. So they go, my gardener charges me per hour. You know, my. My dentist charges me per hour. Whatever it is, my lawyer charges me per hour. And so the problem then is you sit in the context of literally every single other vendor that charges per hour. And most other people who charge per hour are typically not charging a premium, right? Even relative to how much you could charge by charging per asset or per outcome. Even lawyers are way underneath the market of what they could make. But the thing is, everyone price anchors to hours, okay? So you don't want to do that. You don't want to associate yourself with that. And so even if you were to notch your hourly rate up to 500 bucks an hour, $1,000 an hour, you would still be leaving a ton of money on the table. So here's a different example or a different business model. So let's say instead of charging per hour, you charge per project. So you go, hey, I'm not going to count how many hours it takes me to edit your book, for example, but I charge. And then because you're priced to the value of the asset, the success of the project, and whatever that project is worth to the client, well, now you can charge a lot more. Instead of charging $100 per hour, you might say, I charge, you know, 10 grand to edit your book. And even if it took you half as many hours, right? If you were to charge per hour, maybe that would come out to you earning five grand. But you can get away with charging twice as much or three times as much, because you're not pricing yourself relative to time and effort. You're pricing yourself relative to the value of having the project completed, right? And that's what the client really wants. That's. Or that's what the customer really wants. It's the same thing if they're buying a digital product. It's the same rationale. So that's why one of the big things I talk about is not pricing relative to time and effort, but pricing relative to assets. You always want to find a way to package what you're doing and sell it as an asset. For example, I just had a gardener come by, look at our backyard. He goes, I charge a hundred bucks an hour. Like, okay, if you had come to me and said, hey, you have all of these dead plants, you have all of these weeds, you have this tree that needs to be unrooted, you have all of these problems, and as a whole project, I can clean this whole thing up for you. You, for three grand, I would have said, okay, well, I need to do it. So I guess that's what I need, because that's the outcome that I am trying to buy. I actually don't care if it takes 2 hours or 10 hours or 30 hours or 3 hours. The only thing I care about is that the backyard looks nice. Right? And so many writers don't understand this when they price their services, or not even writers, I mean, literally every single vendor makes this mistake. And so what you really want is you want to understand what is the outcome that the person really cares about, and then price yourself relative to the success of that outcome, the completion of that outcome, not how much time and effort did it take you in order to get to that outcome. Okay, so those are sort of the basic ones. But then let's say, and I see this pop up all the time, let's say during a sales call with a client, you. You're still the fictional editor. The client asks, well, instead of hiring you to edit my book or my white paper or my internal documents or what, and instead of charging you per hour, could you create a document for me and my team to understand all your editing principles so that we can edit it on our own? And I cannot tell you how many times I see solopreneurs, creators, writers, they make a massive mistake in this moment because what they think and the question they ask themselves is, hmm, how long would it take me to make that document? And right back, they fall into the trap of thinking, well, it's only going to take me an hour or two to make this document. That seems pretty easy. Okay, client, sure. I'll create this document that basically shares everything I know about editing for you, and your team can do it, and I'll charge you a couple hundred bucks. It won't take me that long. But what you're not realizing, and this is where you start to leave a tremendous amount of money on the table. What you're not realizing is that in that moment, the client is not paying you for how long it took or takes for you to create that document. What the client is paying you for are all the years you had to acquire knowledge in order to be able to create that document in the first place. They are paying for all of your pattern recognition. That's what they're buying. And so if you think that the way to be compensated on this information, the value of your value, is how long it takes for you to create just the document or the template, you're leaving 10 years of value on the table because that's how long it took you to be able to create this thing in the first place. So I also see this all the time with designers, right? Instead of going, hey, instead of paying you 100 bucks per hour, do you mind? Can I just pay you to create a template for me so that me and my team can use it moving forward? And the designer goes, yeah, sure. That shouldn't take me too long. It'll take me like an hour. Why don't you just give me a hundred bucks and I'll create a template for you? And what they don't realize is that in that moment, they are giving away 10 years of knowledge for a hundred dollars. And that is a problem. That is a mistake. And so when you recognize this, what you should do in that moment is go, sure, I am happy to create this document for you, and I'm happy to crystallize all of the value of my value for you so that you can leverage it internally. But it's even more expensive because you're not buying an hour or two of my time to create this document. You're buying 5, 10, 15, 20 years of me accumulating all of this knowledge. So if you don't understand that, you are going to end up leaving a ton of money on the table. Okay, but then here's where you could push it one step further. Let's say on the sales call, the client goes, you know what? I would love that internal document, and I would love your help implementing it and training my team on it. Okay, well, if you don't understand the thing we just talked about, the problem gets compounded when you go, oh, sure, that shouldn't take me too long. It'll take me a couple hours to create this training document, and then, yeah, why don't I just hop on, like, a zoom call or Two with you and your team and walk you all through it, right? What is that, like four hours of work, charge 100 bucks per hour, call it 400 bucks and we're even. And you don't realize you just left tens of thousands of dollars of value on the table. Because what you need to recognize is that the reason the client would want you to a create that sort of document, think anything where you're crystallizing your knowledge templates, anything tangible plus implementing it to their team. So help me train people on my team to then take all of this knowledge and do something with it. Well, the reason the client wants that is because they would expect to make 5, 10, maybe even 100x on whatever they pay you. Okay, so let's say, and I've had this happen in the past, let's say the client goes, you're really talented editor, would love for you to create this document. We want to use it as an internal training document and I would love for you to do some sessions, hands on training our entire content marketing team. Well, if you were to implement what you know and what you know really, really well into that company's content marketing team, let's say they have 10 people, 20 people, 50 people, 100 people. I've worked with companies where their content marketing team is like a thousand people. What do you think the outcome and the value of that outcome is going to be for the company? Well, if they implement what you know really, really well, they would expect to make 100x on whatever they pay you. And so you have to think, all right, so what's really happening here? I am passing along 10 years of knowledge to someone else's organization that they expect to make tremendous upside from. I need to start there and then reverse engineer what my compensation should be. And you're, it's going to sound crazy when I say it, but why wouldn't you charge something like 50 grand for that? Because 50 grand, you have to, you have to remember, 50 grand might seem like a lot for a quote unquote project for you, but really 50 grand is the equivalent of like a fairly entry level slash mid level employee. And so they're basically hiring you quote unquote, as a entry level slash mid level employee. Except that's not really what you are. You have a tremendous amount of knowledge and information to share and then the company would expect to take that value and go, well, we'll pay you 50 grand. But our hope would be that you would power level our entire content marketing team. They would be way more effective and inside the engine that is our business, we would hope that our content marketing team makes 500 grand from that or maybe 5 million from that. And not just in the first six to 12 months. Right. Because they would take that training and then they would continue to use it for potentially years into the future. So when you really understand all of the things that happen from the value of your value, then in hindsight, charging a couple hundred bucks to create a document and then charge 100 bucks or 200 bucks or even 500 bucks or even $1,000 for an hour or two on Zoom with their team, you're leaving tens of thousands of dollars of value on the table. And I see writers and editors and designers and project managers and solopreneurs and creators make this mistake literally every single day because they don't understand the impact these different business models have on their earnings. And I think the root of the root there is they all are terrified and cannot fathom charging more than whatever little baseline hourly rate the world has told them is fair. And I promise you, when you start to understand how higher level decision makers make these pricing and packaging and buying decisions, they have no problem spending significantly more than you think, because they're playing a different game. And they are not concerned with the time or energy or effort. They're concerned with the outcome. And if you can help them achieve that outcome, and I mean, if you're the one saying you can do it for 500 bucks, they're not going to correct you. They're going to go, all right, this person's literally going to give me 10 years of all of their expertise for $500, I will take that trade all day long. Right? But if you were to say, hey, I understand the value of my value and it's going to be five grand for this project, the client is going to go, got it. I understand. And in many cases, if it's your expertise plus hands on training and there's a clear vehicle and upside for them, you could charge 10 grand, you could charge 20 grand, you could charge 50 grand, you could charge 100 grand. And the only thing keeping you from charging more is A, understanding these business model differences and B, feeling, and I'm going to use this word very carefully, confident in yourself to charge that much. And when I say confidence, I do not mean puffing your chest out and using a bunch of sales techniques that everyone says is how you like trick someone into buying something high ticket. That is not what I'm saying at all. Confidence comes from your understanding of the value of your value. That is it. It's not about proving yourself. It's not about showing that you're the alpha in the room. It's literally just you understanding, hey, I know what I have and I know why it's valuable, and I know why it's valuable to you, and I'm happy to share it, but I would like to be compensated appropriately. And that is all. Okay, so huge asterisk next to that word confidence, because I find a lot of people misunderstand it. So couple really easy takeaways here for you. Because pricing is such a rabbit hole. Business models are such a rabbit hole. It can be very easy to get lost in, you know, business model soup here. So a couple really high level easy takeaways. First is depending on what tier you're in, you want to avoid the middle. Okay, so I made a really great video on this. I wrote a really long form piece on this, you know, 10 lessons from selling over $10 million worth of digital products. If you haven't read the piece or watch the video or listen to the podcast, I encourage you to go do that. It's full of gems. But depending on what tier you're in is going to change how you think about pricing your services. And whichever tier you're in, depending on what you're selling, service, or product, you want to avoid being the middle option. You either want to be the cheapest in that tier or the most expensive in that tier. So if you're going to be cheap, be the cheapest, and if you're going to be expensive, be the most expensive. No customer who wants a bargain cares about the second cheapest option. They go, I want the cheapest, right? And no customer who wants the highest end option cares about the second or third cheapest, highest end option, right? If you want a Ferrari, you want a Ferrari. You don't really care about getting the car that's slightly less expensive, but isn't the car that you want, right? So if you're going to be cheap, be cheap, and if you're going to be expensive, be expensive. Another way of thinking about this is which business model works best for you, AKA which game do you want to play. So typically, the cheaper the thing that you're trying to sell, the more volume you need in order to sustain a certain run rate. So for example, if you go, I want my business to be selling $20 books. You need to sell a lot of books in order to make a certain amount of money, right? If you want to make 10 grand a month, 20 grand a month, you gotta sell a lot of books. Whereas the more expensive the thing that you sell, the less volume you need. Right? And that's why one of the things that I talk about a ton is as a writer, the fastest path to accelerating your income is not to go to a vehicle that is lower priced. Everyone races to I want to sell $100 course, because you need a tremendous amount of volume consistently over time in order to sustain a certain run rate. Right. It is much easier to go up the ladder. And instead of playing a volume game, playing a quality game, you're looking for the customer that would be willing to pay you a premium. One person to do one specific thing. So that's for example, why in pga, what we train writers on how to do is to go find a ghostwriting client, educate them on a problem they didn't know they had or a problem they know they have in their business they just haven't gotten around to solving. Sell a packaged asset and sell it at a premium, because it is so much easier to get one client to pay you five grand rather than selling a ton of volume of $20, $50, $100 digital products or books or whatever the low ticket product is. Now, if you want to play the volume game, and let's say you've built a huge audience and you're really good at generating attention, there's something to be said for that. Just understand that's the game that you're playing. Okay? So this is a really important distinction is do you want to play the volume game or do you want to play the quality game? I will tell you from personal experience, I've sold millions of dollars of digital products and services, and I have done both. The quality game and getting fewer people to pay you a premium is significantly easier than playing the lower ticket volume game. It just is. I understand that there's a ton of hype around being a creator who sells $100 courses, but it is way harder, takes way longer. Building an audience doesn't happen over overnight. If you want to power level your earnings, if you want the actual fastest path from 0 to 10k a month, I would really, really encourage you to consider ghostwriting and thinking of it as a dividend on your talent because it's way easier to get one person to pay you rather than to go find 100 people to pay you every single month. Okay, so the way I like thinking about it is, you know, would you rather be McDonald's or a Michelin star restaurant like the French Laundry? Right. You want volume or you want super high end quality. Three things I want to leave you with. Okay? First, if your pricing strategy is to just close your eyes and randomly come up with a number, you're completely missing the point of the game. Okay? The number that you pick says a tremendous amount about your business. Okay? Another great example would be if I said I had a Ferrari for sale. And everyone knows a Ferrari costs quarter million dollars. You know, 300k, 400k, 500k, depending on what the model is. If I said I have a Ferrari for sale, but it's $500, you don't think, wow, what a steal. Your first thought is, what's wrong with the Ferrari? Because there's only one reason I would be willing to sell you a Ferrari for $500. It's probably because it's busted, right? And so a huge part of pricing is actually understanding how the price affects the customer or client's perception of what you do. And more times than not, I find that people default to, if I make this less expensive, more people will buy it. And that's almost never the case. Whenever you try and make something less expensive, relative to whatever tier you're in, depending on the product or service that you're selling, whenever you try and make something less expensive, you actually end up signaling the opposite. Fewer people buy. And people assume that you aren't the best. They assume that you probably aren't a great option. There's a reason that you're trying to sell a quote UNQUOTE Ferrari for $500. There's probably something wrong with it, right? And so, as a general rule, you want to think hard about why you're pricing the thing that you're trying to sell the way that you are, and what that price is unconsciously communicating to the customer or client. Second is if you sit there and you go, cole, this all makes sense, but I could never charge that much, okay? Trust me, whatever number you have in your head, and you say, I could never charge that much. The true ceiling is 2x3x5x10x that. And I'm telling you because I've lived it. When I was building my ghostwriting agency for the entire first year, we had the most outrageous offer in the worst way. We. I think, if I remember correctly, it was something like two or $3,000 a month for three articles a week. That was 12 articles a month. It was a tremendous amount of volume. It was. It was horrible. Clients couldn't even sustain it. And the only reason that we weren't charging more and lowering the workload was because me and my co founder sat there telling ourselves, there's no way we could charge more. Eventually, it ended up becoming so much work that by necessity, we had to fix the offer because we were drowning and we weren't making that much money. We were drowning in work. And it took us another year to realize that we could have doubled, almost tripled the price, and lowered the volume of work by 2, 3, and nobody batted an eye. And in fact, it was almost the opposite. It was. Clients were actually happy that we were doing less volume. So we started by going, we could. We can't charge more than three grand, and we have to deliver 12 articles a month. And where we ended up was charging five grand a month, only providing two articles a month. That was the. That was the highest. You know, two years later, that was the highest version of our offer. And it. And the reason it took us that long wasn't because it was a true statement that there's no way we could charge more. It was because we had faulty beliefs within ourselves, and we didn't think that we were, quote, unquote, worth it. So whenever you're faced with a pricing problem, speaking from experience here, 99% of the time, whatever you're telling yourself about the market won't be. Won't be willing to pay. That is not true. The real issue is that somewhere within yourself, you have a faulty belief, saying, there's no way that I could charge that much. And so the thing to work on is examining why you believe that, not blaming the market and going, no one would be willing to pay that. I can't tell you. Every single day since we started pga, I get an email from someone saying, I just cannot believe that someone would be willing to pay me $5,000 for an educational email course. I see it constantly. Every single day, new people are joining pga. I see that first, faulty belief. I'm having a really hard time understanding how I could charge $5,000 for an educational email course. And then, sure enough, four weeks later, eight weeks later, 12 weeks later, it happens. And a client pays them that, and their brain explodes and they go, I don't understand how for all these years, I thought that this was impossible. And I'm telling you, it is not a pricing problem or a true hard skill deficiency. It is a faulty belief within yourself. And then third, the last thing I want to leave you with is that if you're sitting there going, I could never charge that much, you want to ask the question in the opposite direction. You want to ask in order for me to charge that much, what would I need to provide, what would I need to do for the client? What would I need to give to the customer? And when you ask that, you have so much more control over the creation of the product or the service. So instead of starting from a place of, oh, there's no way I could charge that amount of money, you actually want to ask the opposite question, which is, well, what would need to be true such that I could charge that amount of money? And then you just go do that, right? You just make a big list of what are all the things that the client would want, what are all the things the client would value, what are all the things the customer would be over the moon, ecstatic for me to tell them or answer for them or give them. Great, go do that. And then the price point rationalizes itself. Okay, so final closing thought. Whatever you're charging right now, I can pretty much guarantee is nowhere near the ceiling of what you could charge. And the reason that you're not making more is most likely because of a business model problem. You've picked the wrong vehicle or the wrong way to think about charging for the value of your value. And. Or they almost always go together. Some sort of faulty belief that you think you aren't worth it. You think, there's no way someone would be willing to pay this. You think, I've never seen someone else around me do this, so there's no way I could do it either. And I'm telling you, if you solve those two problems, nothing will have a bigger impact on your earning potential as a writer.