Category Archives for "Articles By Lynn Swayze"

Jun 03

Fix your Operations, Make More Money?

By Lynn Swayze | Articles By Lynn Swayze

When small business owners come to me, they usually cite the same problems: wanting more leads, sales, and revenue. These entrepreneurs claim that if they could only sell a little bit more and get more clients, that their business problems would all be solved. For these entrepreneurs, they believe the lack of clients is the cause of their problems.
And yet when I come onto the scene, I find that the lack of consistent sales is the symptom of a deeper problem, not the cause.
These businesses tend to have other symptoms too:

  • They can’t seem to get marketing launched on time (or at all)
  • They have haphazard marketing efforts, such as starting and stopping social media posts and sending emails erratically
  • They are falling behind on completing current client work while still hoping for (or needing) new client work or sales to fill the revenue gap
  • Clients are consistently not a good fit (personality, readiness, follow-through)

When I first became a copywriter, I ignored these concurrent symptoms and focused on the marketing and copy. I figured, it was someone else’s job to fix the operational problems. And if I got my client a lot of sales, well then great… they could figure out how to fulfill on their own.
But that plan didn’t fly when Mr. Success became one of my clients. Mr. Success, as I call him, was very good at what he did. He had a few famous clients on his roster… the kind of high profile clients most of us would LOVE to be working with. And yet, he could barely remain profitable. Clients resisted paying for his fees and he couldn’t keep up with fulfillment.
So how was it that a consultant with high profile success stories, a number of awards, and regular speaking engagements could have such problems?
The answer, I found, was in what I call the Profit-Operations Factor.

The Profit-Operations Factor

The Profit-Operations Factor says that how profitable you are is directly correlated to how solid your operations foundation is at all three points in your business:

  • The Front-End Lead Generation
  • The Core Work Fulfillment
  • The Back-End Product Development

And each of those areas can cause major profit loss if you can’t complete the work required for each. So, you can have the lead generation down pat, but if you can’t fulfill, you’ll still experience profit loss. Or, you can have the client fulfillment down and not have enough time to get more leads or create more products.
And most small business owners suck at at least one of them, if not all of them, without a solid operations foundation.
Mr. Success, it turns out, sucked at all of it. When I came on to do copy, he changed his campaign multiple times, up to and including changing his business name. And when it came to fulfillment, he didn’t have work systemized enough to consistently churn out work. And when it came to new product development and upsells… he consistently spent time creating products no one wanted to buy, rather than selling what people actually wanted.
His problem wasn’t that he didn’t have good marketing assets or copy. It’s that he didn’t have the operations foundations necessary to stick to a plan and follow-through to completion. It is for this reason that I created the Scale Fast System.
In my Scale Fast System, we tackle all 5 areas of your business:

  • Delegation, or your team structure, cohesion, and role splitting
  • Documentation, or the knowledge management about what you do and how you do it
  • Conversions, or your sales and marketing processes and success
  • Automation, or your ability to systemize and automate parts of work fulfillment
  • Optimization, or consistent process improvement

And we incorporate the mindset and project planning steps you’re likely missing so you actually get projects done, rather than starting and stopping a million projects.
And if Mr. Success was a client today, I wouldn’t have started with the copy. I’d instead have addressed the Visionary Chaos causing him to start and stop projects first, and then I’d address his quarterly planning, and then I’d address the copy.
If you’re thinking about hiring someone for marketing, first ask yourself:
Is this really a marketing problem, or a follow-through problem?
And if it’s the latter, I suggest focusing on building a complete funnel you won’t have to change in six months or a year, rather than worrying about lots of little things which won’t move the needle.

Want to know how I plan and create complete marketing funnels with hundreds of pieces of copy? Then you’ll want to download my “Marketing Asset Tracker” Template and Mini Training today.

Jan 13

Do You "Nice-Price" ?

By Lynn Swayze | Articles By Lynn Swayze

Hey there Dahling,
Do you “Nice-Price”?
You know…
When someone you know, admire, or otherwise really want to work with asks you for your price…
And you throw all your price mantras out the window and charge like 1/10th what you should.
Ugh.
Did you really feel good when you were working on the job or delivering the service?
Were you excited about the payout when you counted your dimes for gas at the end of the month?
And more importantly, how did this person receive your work?
If your experience has been anything like mine, the result was lose-lose for both sides.
Never, EVER, have I had a client I gave a “Nice-Price” to come back and be like,
“Oh man, that was the BEST job ever! I’m going to refer you to everyone!”
Nor did they respect me for giving them a “great deal”.
So, I’ve charged as little as $500 and as much as $20,000 for a sales page.
And yet…
Some of the clients who got the low prices treated me the worst, referred the least, and sometimes even refused to implement. (Which is one of my biggest pet peeves ever, aside from decaf coffee.)
What changed between $500 and $20,000?
Did the quality change all that much? Not as much as you’d think.
Did my personality or the project experience change? No.
What changed was the client’s perception of my work. (And of course, my ability to take more time probably helped, too!)
And it’s not just me who has seen this.
This phenomena has been proven over and over again. And in one case talked about in one of Dan Kennedy’s “No B.S.” books and in this podcast episode on Scientific American… 
A group of scientists hooked people up to machines which measured their brain waves. And then, they gave them several wines to taste… sometimes twice in the same study.
The subjects were asked to rate each wine they tasted.
But there was a catch. The scientists also told the subjects how much each wine costs. Prices ranged from $5 to $90. And again, the same wines were presented to subjects more than once, but under different pricing.
The result?

Subjects actually reported higher pleasure and greater satisfaction when told the wines were higher priced.

HEYO!
Did you hear that?
Prices directly influenced the perception of quality. On the taste buds.
How is that even possible?!
The same has been proved in all industries and across all products… including pharmaceuticals.
The brain is absolutely amazing, isn’t it?
What this should tell you is that your “Nice-Price” is hurting you AND your client.
And it should tell you that you’re probably charging too little.
And this is exactly why I’m building a program to help you walk through your pricing and finally … once and for all… figure out what you should charge. And feel GOOD about it, too.
If you’re interested in getting your hands on it when it launches, just go here and fill out the form. I’ll put you on the list. I might even slip you a super-secret special bonus, too, when I launch.
All the best,
~ Lynn Swayze
Direct Response Copywriter
 

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Jan 13

The REAL Reason Copywriters Have Books and Courses

By Lynn Swayze | Articles By Lynn Swayze

The other day, a copywriting friend of mine declared that he couldn’t possibly write a book.

The reason?
“I just don’t have enough experience!” he complained.
I laughed and explained that not being at the top is the best time to launch an information product.
Listen: the copywriters at the top got there by writing a book, starting a course, or launching some other information marketing product.
The top copywriters… at least the well-known ones… began their major upward swing when they launched marketing.
And that marketing allowed them to get even better gigs, for better pay, with better results.
Few became well-known experts, gained expert results, and then said, “Oh, I should probably teach this to others.”
And among those who did, many became famous AFTER being involved in someone else’s marketing. (A podcast or two, an industry event, a conference, etc.)
So the correlation is still the same.
Let me repeat that:
If you want to join the upper eschelon in your field…
Be it copywriting, dentistry, consulting, or anything else…
Then you want to become a teacher. 
Think about it: let’s say you have a project which needs a copywriter and you need the BEST.
Before you are two very similiar copywriters who specialize in your niche. Both have similar results. The difference is that one of them has trained 5,000 others to do what they do… with similar, stellar results. And as a result, this second person is well-known by many, many people and came highly recommended.
If you need and can afford the best, who do you pick?
The copywriter who spends all his time alone in a bungalow, or the copywriter who’s generous and ultra successful in marketing his own products as well as those of others?
There’s a reason that people with books and courses have full calendars — and a high price list to boot.
THIS is why copywriters have courses and books. (Of course, aside from the fact that books and courses are great marketing tools in and of themselves.)
Books, courses, newsletters, trainings, and other information products set you apart as an authority. An expert.
And experts get to charge more… and receive fewer complaints at the same time.
For the exact same service as people charging 10x less.
Unfair? Absolutely.
Effective? You betcha.
That’s just how it works. Either you complain about it, or you do something about it.
Which is why I’m creating a program which walks you through the 10 (or so) elements needed to build a unique, competition-proof persona and charge what you deserve.
And just like writing a book or creating a course, ALL of them can be done even if you’re “at the bottom”.
If you’re interested in hearing more, click here to be first to know.

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Oct 20

Price to Win: Why Price Objections Are Never About the Price….

By Lynn Swayze | Articles By Lynn Swayze

 
 

Have you ever heard the following from a customer…?

I can’t afford this.
Your [product/service] is out of budget.
You are too expensive.
I’m going to go with a cheaper option.
If you’ve seen or heard any of these, then this post is for you.
Here are the sobering, heart-stopping truths about price psychology…

Truth #1: Price issues are never about price.

When I first started freelancing, I had a hard time selling myself. I kept getting caught up in the usual things that tripped me up… namely, I kept focusing on me and my skillsmy experiencemy background.
Thing is… no one cares about that. No one cares about me personally. They don’t care how I do my copywriting, or what I used to train for it, or any of that stuff.
They don’t care about the technology.
They don’t care about the tools you or I use.
They don’t even care about the superiority of a method.

Your customers only care about how wonderful their life will be once their problem is solved.

The only thing your customer wants to be sold on is how great their life will be post-solution. They don’t want to know how you did it, really. Even if they’re buying a how-to guide, they don’t want to hear you talk about how you produced that lead magnet using a voice-to-speech software and then published it via a premier publishing company and then shipped it via Samcart. They don’t even care if it’s 30 pages or 150. They want to know how well whatever it is you’re offering will tie into their results.
There are three things you must prove:

  1. You are trustworthy
  2. You understand their problem exactly
  3. Your service / your product can solve their problem better (read: faster, more ROI, less work) than doing nothing, buying from a competitor, or doing it themselves

So if your entire pitch was about you… 
…how you would technically execute the solution
…your years of experience or certifications
…how much passion you have about the job
Instead of about your prospect’s end result…
…the kind of life he will live using your product or service
…how easy he would solve his problem using your service (as shown through testimonials)
Then you are likely losing sales.
 

Truth #2: There are three reasons people use price as an excuse

There are only three reasons that people have when they use price as an excuse.

Reason 1: They cannot actually afford your service.

Sometimes, people will look into your service because they do have a problem, but they’re still in research mode.
They don’t know anything about you or your price or what you do.
Sometimes they’re just looking.
They may not be ready to buy. So if they say they can’t afford it…maybe they literally cannot afford it.
Or maybe, they’re not your ideal buyer.
If you’ve built out a buyer persona and you’re targeting a specific customer, then your price will fit that buyer persona. By definition, a person who cannot afford your service is not your ideal buyer. Period.
Stay top of mind with this person (through retargeting, lower-price hands off products, and regular email marketing) but DO NOT lower your price because then you’re lowering your value.
They will not value you more because you gave them a discount.
Therefore, do not lower your price to win a sale.
If you really think this project or customer is a good fit, the best thing you can do is to continue to offer proof.
Offer hope that will get them thinking about their life after hiring you. Plant that seed.
Let them see your product as a sure investment in their future.
So let’s say someone cannot afford a product, but you know that they will make the money back quickly. If you can absolutely guarantee that they’ll make money, make sure that you’re reducing their risk so it’s a no-brainer that they will no matter what make that money back very, very quickly. Make sure you’ve highlighted your guarantee. Offer them payment plans.
But don’t ever, ever reduce your value by discounting.

Reason 2:  They do not value your service or the end result.

Some prospects want results without investing anything. They expect the moon but don’t respect your time or expertise.
These prospects haven’t done their research about what you do or how you help.
They don’t know how much work it takes to become an expert in [whatever you do] like you have.
They don’t know (or care) how long it takes you to do what you do.
And they certainly don’t want to invest in their own end result.
So they want to 10X their income but don’t want to put in the 10% it’d take up front?
In my mind I’m pretty sure they don’t want it bad enough.
Let’s take a look at my own story, shall we?
So far I’ve invested $25,000+ in my copywriting training, in website building, books, etc. I want to be a full-time copywriter that makes millions for my clients more than I’ve ever wanted anything in my whole freakin’ life. Is $25K worth the seven figures I’ll make? Hell freakin’ yes.
Your prospects should be the same way. If they want the moon, they better be willing to pay for a rocket ship.
If you see these prospects…RUN.
These types of clients and customers are terrible.
They…

  • Will question you constantly
  • Will redo what you’ve done or disrespect your time and effort
  • Don’t actually know what they’re talking about but will talk down to you anyway
  • Will ask for refunds unnecessarily
  • Will complain constantly about the very things others gush about
  • Won’t recommend you to others or provide a referral

The best thing to do here is not sign them up.
And if you can, figure out what attracted them in the first place and disqualify them faster and earlier in the sales process.

Reason 3: You have not proven how what you do ties into their results and how it’s worth what you charge.

The good thing about reason number three is that it’s in your control. Unlike the other ones which rely on your prospect, this one you can fix.
So if you’ve built a buyer persona and know your prospect well…. You shouldn’t have this problem.
If prospects who have the budget and value the outcome are not choosing you it’s because you haven’t sold yourself well.
What do you do?
 Go back through all of your sales materials, your website, and your proposal and pull out every selfish, I-focused bit. Pull out all the feature-only content and rewrite it so that every “feature” has a so what attached to it.
Because remember, people buy for emotional reasons and justify with logic.
 Honestly, this is why copywriting is so freaking hard and is so expensive. Copywriting which pulls the emotional strings and sells without turning someone off is very, very difficult.

Truth #3: Price is a marketing strategy, so use it like one

Your pricing tells the world more than you think. It tells the world what you think of yourself. And it tells the world who you help.

First, pricing tells the world what you think of yourself

If you believe actual core that what you do is valuable and will benefit your customer then it is your obligation to sell it and if you believe that what you do is valuable and you will charge a price that is commiserate with that value when you charge to low you’re saying that you don’t believe that it’s any good.

Second, your price tells the world what you think of money.

If you’ve never made more than $1000 a month in your entire life, you’re going to feel shame selling a product or service for $1500 or $3000 or $10,000. Have you only made $250,000 as an entrepreneur? You’d likely choke at pitching a $350K project.
Your price reflects your own inner barriers if you let it.
This is why most of the top names in the industry raised prices incrementally….
…and also why each of them will recommend mindset books such as “Think and Grow Rich” and what-not to new followers.
Your mindset is everything.
Pricing fails happen when you get stuck on yourself.
Most people price to please themselves instead of the prospect.
Let’s say you sell to enterprise customers:
Do you think a company like Microsoft or Dell is going to take you seriously when you charge $150 per white paper…. Instead of the $1500-$7000 the industry charges?
Or $15 per hour to consult on business marketing?
The answer, of course, is no.
Your client knows that if you really understood the market….
and really understood the amount of work it took to produce a white paper….
And you really knew what a good white paper could do for a company’s lead generation efforts…
That you’d charge a good rate for it.
While you personally might not be able to afford to hire someone at $3000 to write a lead magnet, it doesn’t mean that your prospect can’t.
By focusing on you and your limitations instead of who your prospect is, what their budget is, and what their expectations are, you are missing out.
Your pricing must reflect the your ideal buyer’s expections.
Note, that you won’t meet everyone’s expectations. You shouldn’t!
Your goal is to sell someone very, very specific buyer a very specific outcome. That outcome… that happiness… has a price tag.
Find it, prove it, and then own it.
Remember, your price is not about you.

Third, your price tells the world who you help.

Let’s go back to the example of Microsoft. If you are a white paper writer, your market is pretty wide. Companies of all sizes need white papers written:

  • Small startups just barely launched
  • Enterprise IT companies who make millions in revenue
  • Software Development firms who’ve been in business for 25 years
  • Etc…

Now, if you price at $10,000 white paper you are essentially saying that you only work with clients who have a big budget and who get big revenue out of the lead magnet that you generate. You’re also saying that you’ll only work with clients who deeply value and need what you produce.
See how that works? It’s not about how hard or easy it is for you to write it. It’s about the results and how your customers perceive you.
Your price should be one way that you disqualify bad leads so you can qualify good ones.
Your price is a marketing strategy. Use it as such.

Aug 10

Five Common Consultant Website Problems

By Lynn Swayze | Articles By Lynn Swayze

TL;DR: Over the course of this article I’m going to describe the most common website flaws for consultants. There are many (including some that yours truly engages in), but these are the most likely to harm your long-term profitability. These are: a lack of an about page, no email list, no lead magnet, blogging for the wrong audience, and no selling. Read on to get the full scoop.


Table of Contents:
I. Why do I need a website?
II. Common mistake 1: No About Page
III. Common Mistake 2: No Email List
IV. Common Mistake 3: No Lead Magnet
V. Common Mistake 4: Blogging for the wrong audience
VI. Common Mistake 5: Not Selling
VII. Conclusion & Resources


Why do I need a website?

What’s the purpose of a website for consultants?

  • Is it to help with Google search results?
  • Is it to generate leads?
  • Is it to sell your products/services?
  • Is it to showcase your expertise in your field via media (articles, video, audio)?
  • Is it to link to your social media?

If you answered all of the above, you’re right!
And if you struggle with your website, you’re not alone. And also, I want to tell you right now that it’s not your fault. Website creation is purposely made complicated by designers, web devs, and people who make their living selling websites. If they made it sound easy, they’d be out of a job. So if you have in your head that you need to spend $10,000 in order to put up a blog, then you can blame them.
Should you spend some money in quality graphics? Absolutely. Is it necessary when you as a consultant aren’t profitable yet? No. it’s not. Spend money on other things like ads, direct mail, etc., but not on your website. Not at first.
Think of your website as your marketing real estate. It’s the one corner on the internet that you own. It’ll be yours no matter what social media platform is popular or how big you get. It will grow in usefulness the longer it remains in effect. And all of the information on the site is under your control. The layout, the content, the pages, the design. All of it.
Over the course of this article I’m going to describe the most common website flaws for consultants. There are many (including some that yours truly engages in), but these are the most likely to harm your long-term profitability.

Common mistake 1: No About Page

The most common mistake that I see is a lack of an about page or an ineffective about page. Your about page is the one part of your site where you can really talk about yourself. You want to tell your story and through the narrative answer the following questions:
Who are you?
I mean the real you, not your “business persona” version of you. As a tech consultant, do you have a degree in networking, or did you come from a liberal arts background? As a copywriter – did you start off in a different field altogether? What makes you uniquely qualified to do your job?
What do you do/sell?
What do you sell? Do you sell products, like books and courses? Do you sell services, like monthly retainer consulting about something specific? Why do you sell what you do, and not something else?
How do you help your customers?
Here’s an example I came up with on the fly just now for this blog post based on the “60 Second Sales Hook”, a template created by  copywriting mentor Kevin Rogers:
“Hi, I’m Lynn Swayze. I’m an independent copywriter based out of Charleston, Illinois.
For years I watched businesses I worked for struggle to make sales and generate leads. It seemed like everyone had the same problem: they spent entirely too much in advertising, got too few results, and ended up with clients that weren’t a good fit for their services. I knew that their had to be a better way for B2B companies to sell more of their products and services.
In my searching I discovered direct response copywriting. It was the piece that companies were missing! After spending thousands in training from the industry’s top copywriters and internet marketers, reading dozens of books, and hundreds of hours spent reading and hand copying time-tested ads, I learned what worked and what didn’t for B2B companies. 
Now I spend my time helping others apply time-tested marketing and copywriting techniques in their business. I write landing pages and website content, develop marketing funnels, and create lead magnets for companies of all sizes.
If you’re interested to see how I can help you, opt in to my waiting list and then HIT REPLY to the email you’re sent. Or, send me an email at lynn (at) lynnswayze.com and let’s get started.”
See… it’s not so hard! The hard part is opening up in the first place. Note that my about page example as a call to action that isn’t some version of “contact me”. It offers a low-threshold way for people to get more information without directly contacting me.

Common Mistake 2: No Email List

Okay my tech consultants out there… this is probably your #1 problem. You hate spam and so instead of using email to foster conversations and build relationships with your prospects, you avoid it altogether. And you don’t sell. No one uses your “contact me” form. And there is no direct link between website visitors and sales because you didn’t build one.
Mantra: Your website = lead generation tool
Let me ask you really quick…. how many leads does your website generate? If you’re like many consultants, it’s well under 500 total. For one of my best clients, the answer was ZERO. So, let’s say that your website receives 200 views a month. How many of those views translate into prospects, let alone customers? You need to get this number to at least 3%, if not 10%. Ten would be awesome for most consultants. How do you do this? Well, you get a list.
Think of your email list as your future customer database. 
If you do it right, your email list is comprised of people who are your prospects. So, let’s say that you build a proper lead magnet (ebook, worksheet, white paper, etc) and it attracts your ideal client. Your ideal client wants the information and signs up. Now you have a list of individuals who have enough of a problem that they’re willing to exchange their email address for it. That’s a big deal!
Email doesn’t have to be spammy.
Now you can start to build a relationship with those clients. Show them your personality. Offer them value. And more importantly… you stay TOP OF MIND by emailing them at least weekly, if not daily. They won’t forget your name. When they think of a consultant who does what you do, who do you think they’ll think of? If they’re reading your emails every day, then they’ll think of you. They’ll forward your emails to friends. And they’ll refer you to others if they don’t hire you directly themselves. And when it is time to sell (a book you’ve launched, an opening on your waitlist, etc), it won’t come across as spammy because you’re now the friend who’s reaching out with something that’ll help them and not another cold emailing salesman.

FREE course -> “Charge What You’re Worth” by Brennan Dunn

I recommend Aweber  or Active Campaign for email management, but there are others that’ll do the job too, like Drip or ConvertKit or even Mailchimp. Note that you’ll need an @yourdomain.com email address instead of a public one like Google or Hotmail or Yahoo.

Common Mistake 3: No Lead Magnet

In order to get emails, you have to have a lead magnet. A good lead magnet can be used for PPC ads and for email signups on your page. A good lead magnet will provide value (just enough!) without giving away the whole farm. And it will help establish you as an authority in whatever it is you do/teach/sell.
TL;DR: You are offering something of value you have (information) in exchange for something of value they have (an email address/their information, their time). You are looking for those website visitors who raise their hand and are essentially saying, “Yes, I have this problem!” You are starting a conversation with potential prospects.

Common Mistake 4: Blogging for the wrong audience

Okay guys…. you know who you are. Those of you writing about the latest technical tool instead of about your customer’s needs. When you do the former, you are blogging to the wrong audience. So, let’s say that you lead magnet provides value to your ideal customer. Great. But if your blog posts (SEO magnets!) talk to your peers instead of to your prospects, do you think you’ll get opt-ins to your email list? No… no you won’t.
Talk to your prospects. Talk about how you’ve solved a client problem. Address a common question you get. But don’t talk about technical stuff no one but your peers care about. Save that content for where it matters – tech blogs and magazines where you can guest post. Your site should sell you.
Exception: if you want to sell books or training to your peers, then by all means blog about the technical, profession-related stuff. But in this case you’re still following the rule to blog to your customer, because your customer has changed. See where I’m going with this? 🙂

Here’s Jon Morrow’s secret for blogging success (from : https://smartblogger.com/stephen-king/):
“You want the formula for writing popular blog posts? Here it is: Jot down a list of blog topics you could write about. Circle the ones at least 80% of your readers would find irresistible. Write about those topics and nothing else.”

Common Mistake 5: Not Selling

This really goes back to mistake #1 and #2… many people hate selling. For some reason, it’s a big taboo to like selling. I don’t know why it is, but we all think of the sleazy car salesman when we talk about selling. It’s such a wrong mindset to have, though.
If your product or service actaully helps people, it is your OBLIGATION to sell them on it if they’re a good fit. (e.g., they can afford it and they’re ready for it). Why would you deny prospects the ability to grow their busines, improve their IT infrastructure, make more money, or whatever it is that your product does for them?
I think people get caught up in themselves and forget that they’re bringing value. They think, “No one would pay me $150 an hour to do this. I don’t know as much as [insert expert]!” Thing is, you know more than your prospects and clients and you will get them results. That’s what they’re paying for. Not for YOU, but for the RESULTS.
On your website, therefore, you have to sell. Make it easy for people to opt in to your list. If you sell a low-priced product (a book, for example), make it easy for them to buy it. Advertise it like you would someone else’s product. Talk about it at the end of your emails. Make sure that everyone who comes to your site is VERY CLEAR on what you do and how they can buy from you. Because people buy when they’re ready, not when you’re ready.

Conclusion

You’re probably making at least one of these website mistakes, and that’s okay! It’s never too late to fix a website that isn’t working. And if you get stuck, please reach out by commenting below. I love hearing from my readers.
Now go thee forth and make more money!
If you found this post helpful, you should get on my mailing list. And please… share this with someone who needs kick in their website booty.
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Jun 28

Why I Don't Ever Recommend Hourly Billing

By Lynn Swayze | Articles By Lynn Swayze


Table of Contents:
I. Why do we engage in hourly billing?
II. Why don’t big names engage in hourly billing?
III. What’s the risk of hourly billing?
IV. Price Anchoring
V. How to Sell Using Price Anchoring (Quick 3 Steps)
VI. Conclusion & Resources


Why do we engage in hourly billing?

Tell me: What do all the “gurus” say you should focus on when you go about pricing your services? They talk about pricing per hour.
It’s not your fault. You believe it because when you started working, you were paid per hour.
A “job” = exchange of hours for money.
So then when we go out and start software consulting companies, marketing consulting companies, freelance businesses, etc.,…. we think about hours. Even when many bill “projects”, they still compute the price based on the # of hours it’d take and charge that.
Example: 3 x $100 an hour = $300 for a logo
Nooooooo…….. 

Why don’t the big names engage in hourly billing?

Look… there are consultants charging $50-100 an hour and there are consultants charging tens of thousands per day. Don’t believe me? According to my copy of Dan Kennedy’s Magnetic Marketing*, Dan charges something like $19,000+ per day to fix their marketing and build a direct mail funnel.
Why don’t they engage in hourly billing? They don’t because they would never get as affluent as they are charging hourly rates. I mean, some of these guys charge tens of thousands just to speak at an event. How do you think it would sound if they actually talked to people about what they made per hour?

What’s the Risk of Hourly Billing?

There are three risks associated with hourly billing: Commoditization, Profit Loss, and Inefficiency
Commoditization
The thing is, when you charge by the hour, you’ve essentially made yourself a commodity. A commodity is something that’s just like everything else. So when you say, “I’m a consultant who does X and charges Y!” Well, your client is only thinking about the rate. They’re not thinking about why you’re different or the results you’re going to bring compared to what anyone else can bring them. They’re only thinking about the rate. So they’re going to compare you to the next person who does X but charges Z, and they’re going to pick the cheapest one. Or, they’ll go with you until they decide they don’t want to pay your fee anymore.
Profit Loss
And then there’s the profitability ceiling…
Here’s an example where hourly billing goes wrong as applied to profitability:
Let’s say that you are one of the tens of thousands of IT consulting firms who charges between $100-$150 an hour to do IT stuff. (Software development, network infrastructure, whatever.) Now, when it was just you there was a lot of money to be made. You were bringing in 200K a year and had negligible business overhead (let’s say $12K a year for office space and training and such.) Great.
But you wanted to make more money. How did you do that? Well, you got more contracts at $100-$150 an hour, but you outsourced some of the work for $50 an hour. So now you have people underneath you making $100K a year and you pocketed the remainder.
The problem? As you hire people, you expenses go up and your profits go down. Now you have to hire people to do all of the business stuff, like accounting and sales and HR.
And the only way to make more money? Take on more contracts and hire more people. You can’t charge more, because that $100-$150K is the market rate for what you do. Your clients know that what you do is a commodity and can and will go elsewhere if your rate is too unjustifiable. So you just keep taking on more clients, hoping that eventually your costs will stabilize. Or maybe you pay people less, taking on more junior employees. Or maybe you make your employees work more while pocketing the rest.
Either way, it’s a quick train to burnout land.

In short: your profitability has reached its ceiling. Congratulations.

via GIPHY
Instead, what this company (and I swear there are tens of thousands out there like that fictional one I described) should do is focus on the end result they’re creating and point pricing to that. Instead of making only $200K for a year’s worth of work, they could anchor at $250K… $350K… $450K… and actually make a profit that doesn’t revolve around billing employees at 4x what they’re actually getting paid.
Efficiency
When you know that you have 10 hours to do a job and you’ll only get paid if you sit there for 10 hours to do it, do you think there’s any incentive to work faster or get better at what you do? No. It puts you at a moral dilemma. If you weren’t paid by the hour, you could buy tools or do things in such a way that you get your client’s work done faster and better. Instead, you are tied to hours because otherwise you can’t pay the bills. So will you buy a tool that will do the job better, or get the job done quickly so the client can reap the rewards quickly?
The answer is no, you don’t. Instead use up the hours you’re allotted because that’s the only way you make money.
There are only three ways to make money at that point:

  1. Charge only what time you spent, but over time be forced to take on more and more clients once you’ve reached the per-hour ceiling. (You become more efficient so your per-hour becomes less profitable.)
  2. Charge what was quoted, whether you actually used all that time or not. (Cheating and lying to your client – that’s bad mojo.)
  3. Take all the time allotted to do the job, and never break away from the working-all-the-time wheelhouse you wanted to get away from in the first place. (At this point, you might as well go back to your j-o-b.)

Instead of all of that drama, you could just price according to the project’s value, do the job in the time it takes, and deliver value quickly so your client can reap the rewards. No killing yourself, cheating yourself or your client, or being inefficient. Just work you want to do at a rate that pays your bills.
Sounds good, right? Then let’s look at price anchoring and how it affects your billing.

FREE course -> “Charge What You’re Worth” by Brennan Dunn

Price Anchoring

Price anchoring is the idea that the first piece of information you receive about something will create a bias that colors the rest of your experience. This is why it’s so hard to change your prices with existing clients, and why you have to anchor it to something else (e.g., your posted rates are now significantly higher than they’re paying, and you don’t want them to feel like they’re getting second-rate work from you because they’re paying less. Etc). 

How to Sell Using Price Anchoring:

Look at my previous post on pricing for more details, but here’s the shortcut version:

  1. Find out what their most painful problem is
  2. Discover and discuss what that most painful problem costs them or is worth
  3. Talk about your pricing in relation to solving that problem

The best way to achieve this is to price per project. What value are you giving in exchange for your fees?

Conclusion

Summary:

  1. Hourly billing reduces your total income and makes you a commodity
  2. Price according to value, not to yourself or market rates
  3. Use Price Anchoring to your advantage

I want to add something here: Something magical happens in your head when you stop thinking about hours. The first is that you become more efficient. The second is that you stop working so darn  much and you stop sweating it. If you’re bringing the value and end result you promised your consultants, then you’re doing your job. Who cares if it only takes you 20 hours? That’s your business. And if it takes you a ridiculous amount of time to do a job? Well, that’s your business (/problem) also.
The results are what you’re promising and what your clients pay for. Anything else is just a golden handcuff and a focus on the wrong thing (e.g., labor instead of the end result).
You want both you and the client to be on the same page and focused on getting a very specific end result. 
Got it?
Now go thee forth and make more money!

via GIPHY

If you found this post helpful, you should get on my mailing list. And please… share this with someone who needs kick in their pricing booty.
Useful Resources:


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Jun 28

How to Figure Out What You Should Charge

By Lynn Swayze | Articles By Lynn Swayze

Table of Contents:
I. Why is Pricing So Hard?
II. Pricing is all Mindset
III. It’s Not Your Fault
IV. Price Anchoring
V. How to Sell Using Price Anchoring (Quick 3 Steps)
VI. Conclusion & Resources


 

Why is Pricing so Hard?

One of the most burning questions I had when I first got started in consulting was, “How much do I charge?!” I would go into cold sweats every time I thought about raising my rates to even close to what I knew I could charge.
Maybe you’re like I was. If you keep asking the same thing, you’re not alone. So many copywriters, consultants, and even service providers I meet ask the same thing. It’s a difficult thing to price correctly, and the reason is because you’re thinking about it all wrong.

Pricing is All Mindset

Pricing really is more art than science. There really aren’t any magic numbers that work for every person, market, or problem. Let’s look at the consulting realm:
There are consultants charging $50-100 an hour and there are consultants charging tens of thousands per day. Don’t believe me? According to my copy of Dan Kennedy’s Magnetic Marketing*, Dan charges something like $19,000+ per day to fix their marketing and build a direct mail funnel. Why such variability in what is essentially the same service?
The truth is, making more money as a consultant is entirely a combination of mindset + price anchoring + confidence. And the confidence in your rates is probably the most important of all of them.

It’s Not Your Fault

Look, it’s not your fault. What do all the “gurus” say when they talk about pricing your services? They say something like this:

“Price what you’re worth!”

But “Price What You’re Worth” leads to a line of thinking that goes like this:

  1. Last time I worked for a client/had a job, I made $X per Hour
  2. In order to pay my bills, I need $Y per Hour.
  3. The other guys I’m competing with charge $Z per hour, therefore I have to charge Z.
  4. I can’t get work quickly despite advertising my rates, so I must be too high. I’m going to charge closer to $X.

Yiiiiiiiikes people. This is bad. This is why we get that race to the bottom that every freelancer warns about. It’s bad mojo and it’s killing your business.
The truth is, there’s a better mantra you have to use when you price. Are you ready?

It’s simple: “IT’S NOT ABOUT YOU.” 

Seriously, stop thinking about youyour worth, your skills, your experience. Your prospects don’t actually care about that beyond the value of a story, which is what it takes to get them interested in you in the first place. Otherwise, it’s meaningless to most prospects, who by the way don’t know you from Scott down the street.
Instead, focus on themTheir problems, their goals, their pain pointstheir awareness level. Heck, even their budget, which is likely a h-e-double hockeysticks level above your own  meager need-per-month.
Have you ever read the book, “How to Win Friends and Influence People?”* It’s a great book, by the way, and one you should grab immediately. The gist of it is pretty simple, and it goes like this: In order to be interesting, you have to be interested.
That is, people enjoy talking about themselves. They enjoy it so much that they’ll think you’re the greatest person since sliced bread if you’ll let them ramble. People are craving to be heard and understood. You taking a few minutes out of your day to do it will mean the world to someone else. And that’s how you create relationships.
So when you’re marketing, you had better be talking about them. Don’t talk about yourself. Talk about the problem that you solve. Which brings me to the next point: price anchoring.

Price Anchoring

Price anchoring is the idea that the first piece of information you receive about something will create a bias that colors the rest of your experience. This is why it’s so hard to change your prices with existing clients, and why you have to anchor it to something else (e.g., your posted rates are now significantly higher than they’re paying, and you don’t want them to feel like they’re getting second-rate work from you because they’re paying less. Etc). 
P.S. Eric Yu talks about the three benefits of price anchoring. I highly recommend you hop on over there when you finish with this post.

How to Sell Using Price Anchoring:

  1. Find out what their most painful problem is
  2. Discover and discuss what that most painful problem costs them or is worth
  3. Talk about your pricing in relation to solving that problem

For example: as of July 2016, I charge $5000 per month for my consulting and copywriting. It’s a terribly low number for the results I bring, but we all have to start somewhere, right? When I sell my services, I always anchor it on the goal revenue I’m going to bring them as a result of working with me. I point to what I’ve done for other clients (usually 3-4X my retainer) as proof of the ROI.
Then I point to what else they could spend their money on, which wouldn’t get them the same ROI. E.g., hiring an expensive “graphic-designer-slash-marketer” at $60K, who doesn’t know direct response like I do. Or a six figure CMO who doesn’t guarantee her work like I do. When I’m telling a customer (and looking them square in the eye) and guaranteeing that I’ll bring them from $100,000 annually to $250,000+ annually or I’ll work for free until I do
well… that $60K in exchange for “guaranteed” $150K+ they didn’t know how to get starts looking pretty cheap, doesn’t it?
This is why your landing pages, sales letters, etc have to have benefits. This is why any copywriter you hire will rip out your “features” and “years of experience” wording right away. This is why the big time consultants barely talk about themselves.

Here’s a free Freelance Rate Calculator from Brennan Dunn

Example: Look at Ramit Sethi’s about page – everything he talks about  relates back to solving your financial problems. He only shares enough to prove that he’s just like you and that he understands what you’re going through.

Conclusion

Summary:

  1. Pricing is hard because you’ve been misled by everyone
  2. Price according to value, not to yourself or market rates
  3. Use Price Anchoring to your advantage

Now go thee forth and make more money!

via GIPHY

If you found this post helpful, you should get on my mailing list. And please… share this with someone who needs kick in their pricing booty.
Useful Resources:


* this is an affiliate link. Just do some Google searching for the title if you’d rather those pennies stay in Amazon’s/whoever’s pockets instead.

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