Module 09 – What to Charge Pt1
In this module, I want to talk about pricing points and in particular, what to charge.
This is always an interesting topic of conversation amongst my coaching clients, especially for those that realise that there’s really no need for them to be charging a couple of hundred bucks a month. I guess with pricing, it’s going to vary depending upon your skillset and I’ll say where you’re based in the world, but from what I see with most of the coaching clients that I work with, they’re well under where they should be pricing.
I want to share some thoughts on pricing with you and show and just touch on a couple of key areas that I think are really important. I can’t stress this enough. This is a problem that you’ll see on a freelancing site. Go over to Reddit and have a look in the SEO forums over there, Facebook groups. I see this stuff all the time, and it’s true for the coaching clients that I’ve certainly worked with. They’re scrambling. They’re constantly chasing money and arrears. I’ve done the work and haven’t been paid. In fact, I had a coaching client last month who had $32,000 worth of outstanding invoices, which is just madness.
I can’t stress this enough. Rule number one in this business, always get paid first.
That’s something that I do, that I implement within my own business. I don’t care if it’s $2,000 a month invoice for SEO or if it’s a $10,000 invoice for web build. I always demand payment in advance. I’m not saying that for web build, I’m expecting 30% now, 30% in two months, and 30% for completion. I’m talking 100% payment upfront, otherwise nothing gets done.
I don’t do any form of work at all unless the invoice has been paid in full. This is definitely where you want to be. You certainly do not ever want to be doing the work and then waiting to get paid because it’s just a great way to get burnt. If you’re taking notes, definitely write that one down.
Always, always get paid first.
Second Point, and this is pretty self-explanatory, no more cheap shit. Depending upon what you’re charging, I don’t know what you might be charging, chances are you might be charging $2,500, $3,000, $2,000 a month. If you are, then that’s fantastic. You might be here for different reasons, but for those that aren’t sure what to charge or if they’re just charging a couple of hundred bucks a month, that shit has got to stop.
No more cheap shit SEO.
You’re just going to attract the wrong type of clients. They’re going to be the types of clients that I mentioned earlier on, the ones that pay the least amount of money and they make the most amount of noise. You’re not going to be profitable. You’re not going to be able to do any amount of work that’s going to equate to anything of value for the client, and you’re going to be constantly chasing clients because you’re not making any money. That should have to stop immediately.
Here’s something that I’m very, very passionate about, and that’s fucking meaningless SEO packages. I see this stuff plastered all over the place. The minute I see it, I just know that the people providing these services have absolutely no idea what they’re doing. This is pretty common. You see this on a lot of websites, whether providing SEO services, and it’s usually always gold, silver and platinum packages, which is just nonsense. You can see here.
Here’s an example that I found on a website for a place in Sydney here where they’re providing SEO services starting at $145 a month. What a joke. I charge more than that per hour. The deliverables, this stuff is just nonsense. Google business set up. What else have we got here? Social platforms, competitor, geographical displacement. It doesn’t even make sense. No business guy is going to be able to understand this in the first place.
One thing I’ve got to say about stupid SEO packages like this is that they don’t fit. They don’t work. You can’t be doing a Google business set up every single month if the client’s going to stay with you for two years. It just doesn’t make any sense. One thing that I know, even though I follow a set process, is that campaigns, SEO campaigns when done right are usually ever changing through ongoing discussions with the business owner, working out different strategies, implementing different types of content, Q&A sessions, reverse engineering competitors.
The work of which needs to be done is usually always ever changing.
Yes, as I said, I do follow processes, and the work that I do is procedural, and I work through a checklist so if this then that. That’s why I know exactly what I’m doing so I’m not just bouncing around meaninglessly all over the place. Typically, SEO campaigns vary. One campaign might be completely different to the next. When you start offering up these silly deliverables, it’s just nonsense. If you’re providing anything like this, I can tell you right now it needs to stop.
For those of you who have a client base and you are providing cheap SEO services, it’s time to get rid of those deadbeat clients. You’ve got to go back to … and this is something that I worked with. I worked with a coaching client just recently and he said, “John, I’ve got 15 clients here and they’re all paying me $200 a month.” I said, “Well, you’re going to have to go back and say that from here forward, my prices are going up.
They’re going up to $1,500 a month minimum. If you don’t like it, see you later.” I have to say, he really struggled with that because he said, “I’m probably going to lose all of my clients.” I said, “Well, no. Get them on a call.” Because he said, “Listen. If I send an email like that, they’re going to just bail.” I said, “Don’t do it via email. Get on a call. Walk them through it. Listen. I’m trying to improve the quality of my service offering here. I’m doing this for a reason. I’m not simply doing this to try and make more money. I’m trying to improve the quality of my service and provide more value. I can’t do that at these pricing points because it’s just not viable.”
Something really interesting happened. I think he lost two clients out of the 15 and the rest of them stayed on board. Look, that might not be the case for everyone, but certainly if you’ve got clients that are currently working with you, they’re only paying a couple of hundred bucks a month, go back to them. Tell them that your rates are changing.
For those of them that have been with you for quite some time, they’re the ones you probably want to break it to over a call or something. Perhaps you might want to give them two months or a month or something to make that adjustment because it is a big jump. In any case, look, if you have anyone that is an existing client and they say, “Oh, that’s so expensive. I’m not going to pay that.” Let them go because you’re not going to be able to help them and chances are, nobody will.
I want to touch on the way in which I charge, and that is via an hourly rate. I’ve done this for a number of reasons, and I’ll touch on those here. Firstly, it makes sense to business owners. You get a plumber in. They charge an hourly rate. You get furniture removal. They charge an hourly rate. You go to a motor mechanic. They charge an hourly rate. You start talking in terms like that, even with SEO.
You start talking about hourly rates, and it resonates with business owners because they understand it. They usually follow up with what will you be doing for those hours? In which case, you say, “Listen, that I’ll explain to you as part of the presentation, which I’ll get into later.” It’s essentially where you’re sending a work summary sheet and you itemise in everything that you’ve done within those hours. It’s not a difficult question to answer.
One thing that I found is that clients usually always ask when I walk in through my presentation and sales pitch, they’ll say, and this comes back to educating and setting expectations, they’ll say, “John, shit. You said this is going to take about 12 months before we start seeing some big returns here. How do we get faster results?” There’s no better way than saying, “Listen, you want faster results, you’ve got to buy more hours. You’ve got to put in more time to speed up the process if you want fast results.”
That’s a fantastic way, and this is how I’ve managed to be really profitable. If they come to me and they just want to do the minimum 12 hours a month, I’ll say, “Okay, that’s fine. 1,600 bucks a month.” “Oh shit, John. How can we speed this up? How can we get quick results?” I said, “You got to put in more hours.” “Okay, John, let’s do 20 hours this month or let’s do 25 hours this month.”
That’s how I can take a client who comes on board and they expect to pay $2,000 a month and have them pay me $4,000 a month. It’s a great upsell and it’s viable because it works. You’re not just selling nonsense. It’s not all smoke and mirrors when you itemise what you’ve done at the end of each month. I’ll touch on that in an upcoming video. When you itemise what you’ve done for the month and you can break it down and say, okay, this month we did this, this and this. You can see the amount of work that’s happening. They’ll be completely comfortable with it. Of course, we’ll get into reporting and everything else later. Charging an hourly rate really fits. It fits SEO well.
I had an interesting question from a coaching client. Does the client know how many hours you’re going to be spending? You don’t and just, oh, this month … You don’t want to be sending a report and saying, oh, this month we did 50 hours and it was $8,000 for the month. That’s not how it works. It’s always capped. They’ll know in advance what their cost is going to be. They can say 15 hours this month. Great. Most clients, once they’ve picked a sweet spot, 15 hours or 20 hours or whatever it might be, that’s where they stay.
One other thing that I found is that once a client comes on board and they can see the amount of work that’s being done and they know how far behind their competitors they are and the amount of work that needs to be done in order to catch up and be competitive in that space, they’ll usually always say, “Shit, we need to put in more time here.” That’s another great way of ramping up your earnings. Again, this is why a lot of people that I speak with, they understand how I’m making 50 grand a month with 12 clients and this is how I’m doing it.
One thing that I think is really important is putting your prices or showing your prices on your website.
I really struggled with this at first because I had a lot of people … I had in my head I was thinking, shit, I put my prices on my website. I’m not going to get any inquiries. Those inquiries that I was getting without the prices on my site, they’re all bullshit calls. “Hi. How much do you charge? Oh, that’s so expensive. Bye.” I’ve got a lot of that sort of crap. In the end, I just got sick of it, and I put my prices on my site. I had a lot of people that work in the SEO space say, “You’re mad. You’re going to turn people away.” You know what? I’m not interested in wasting my time in a call with someone for half an hour who wants to spend $300 a month or $500 a month for SEO. I’m just not interested.
Putting my prices on my website is definitely one of the best things I ever did and certainly one that I recommend that you do. This is something that I speak about heavily with my coaching clients. Put your prices on the website because in addition to that, it makes the sales and the pitch so much easier because there are no surprises.
They already know how much they’re going to be paying. From there, it’s just about you saying, okay, we’re going to be doing this, this and this and demonstrating value. Once you fill those blanks, then it’s an absolute no-brainer. You know that anyone that picks up the phone and calls you is already pre-qualified because they know what your rates are. They’re not going to be lolly scramble trying to get you to turn their business around for $300 a month. If you’re thinking about putting your prices in your website, I strongly recommend that you do it.
Here’s another point that I guess I made this mistake and occasionally I still do make this mistake. I certainly worked with a lot of coaching clients that have been in this position where they’ve had a client that, “Oh look. I’ve been with you for two years now. Can’t you do me a favour? Shit, John, that’s so expensive. This website upgrade is more than I allocated for. Can’t you take a couple of thousand off?”
Every single time you put yourself in that position and you start negotiating your rates, you’re just going to fuck yourself. I’ve done it more times than I can remember where I’ve thrown a quote at someone at $8,000 and they said too expensive, and they’ve negotiated me down to a bloody $4,500, and I’ve ended up sitting here at my desk until 3:00 in the morning working for $8 an hour and thinking, why the fuck did I agree to this?
It’s really, really important. You’ve got to stick with your prices. This is how much it costs. If you don’t like it, then go elsewhere. The people that are worth working with are business owners that understand that it’s an investment and not an expense, they won’t be trying to negotiate you down on your rates. It’s definitely a lesson that I’ve had to learn a number of times over, and it’s definitely something that I see amongst a lot of freelancers in particular, lowering the rates because the client is upset or they’re trying to just close the deal at whatever cost. It’s never a good idea.
One thing that I will touch on here, and this is something that I’ve had great success with, is offering discounts for prepaid services. In other words, my hourly rate is say a hundred and … Let’s say your hourly rate is $180 an hour, and you’ve got a client, and they’re interested in working long term with you. They’re a great client. They pay on time. There’s a shit load of work that’s to be done as part of the content marketing strategy or whatever else that’s going on within the campaign.
One thing that has worked very well for me is during my end of month strategy calls with my clients, I’ll say, “Listen, you know there’s a lot of work here to be done. Why don’t you think about pre-paying me for the next six months and instead of working at $180 an hour, I’ll drop my rates to $150 an hour. You’re going to save some money. You’re going to get the same amount of work done, same amount of time, but it’s going to cost you less, so you’re going to save some money.”
In other words, asking the client to prepay for six or 12 months in advance, and you’d be surprised how many people take me up on that offer. It’s something I remind them about at the end of each month. Hey, if you want to plan on sticking around for the next three, six months or 12 months, then, hey, why not prepay? It’s a fantastic feeling getting a lump sum of $30,000, $40,000 in your bank account, bang, straight away rather than dribbling along at $1,500 or $2,000 a month. As I said, I’ve had a lot of success with that.
One thing that I found is that business owners that have been working with me for three or four months where we build up that relationship and trust, they don’t have a problem with it because they say, “Look, John. We know you’re doing a great job. We’re seeing the results. We we can see the work that you’ve done. Let’s prepay. Let’s do six months.” They might pay six months in advance, and it might be $18,000 or $20,000 straight up. Don’t forget, of course, you still got to balance that out at your end. You still got to pay staff and work everything else out, but it is a nice feeling to get that lump sum up up front in advance.
Here is something that comes up every now and then, and this is usually dickheads on the phone that make you all sorts of wonderful promises. Oh look, we’re starting this business and it’s going to be awesome, and we’re going to be multimillionaires by next Thursday afternoon. They’ll try and suck you into some sort of performance-based SEO or revenue sharing where they’re saying, “All right, listen. We know that you charge $2,000 a month, but just charge us $1,000 a month and we’ll give you 10% of the business. We’ll pay you a commission for each lead that comes through.” All of that stuff is going to be well outside of your control, and this is something you need to be mindful of.
If they’re running a shit business or if they’re offering you a percentage, usually when they’re offering you a percentage, it’s a percentage of zero, so it doesn’t mean anything anyway. Always stay right away from this sort of nonsense. I don’t know how many emails I’ve gotten over the years where people have sent me an email and said, “John, can you build this site and can you do SEO for the next 12 months and we’ll give you 20% in the business.” Fuck that. Not interested. Be well aware of that sort of stuff. I don’t care who’s at the other end. My rates are what they are. Pay me or we’re just not going to work together.
Last slide is stay confident. Every now and then, you might have a moment of uncertainty or doubt. Maybe I’m too expensive. Maybe I’m not charging enough. Maybe I overcharged and I didn’t … because I didn’t get that. I didn’t land that job. Finding your way in terms of pricing and what to charge can be a challenge. One thing that I do say to my clients, especially those that are just starting out, who mainly have 12 months’ worth of SEO knowledge.
Don’t be ashamed to set your rates at 70 bucks an hour or something just as a starting point. That’s fine, but don’t stay there. Make sure that you move quickly and you get you rates up to $120 or $150 an hour.
Again, it’s going to come in where you are in the world and what sort of clients you deal with and everything else. That’s all going to be subjective based upon your own individual circumstances. Whatever it is that you do, always don’t undersell yourself. That’s I think the biggest problem that I see with all my coaching clients when we start working together, is they just lack confidence and they’re constantly under quoting.
As a result of that, they’re struggling to make the business work.
Hopefully what I’ve touched on in this module has given you something to think about. When I first started with my rates, it was really difficult to try and figure out where to be. I had a lot of people tell me that I was too expensive. It’s really interesting actually because my pricing point at that stage was $1,000 a month. I thought even that was a bit rude. Now I’m well above that and I’m still getting clients. It’s just a matter of I’m sticking with it, remaining confident, setting new rates and working with the right people.