5 Ways to Make More Money and Productize Services
In my last post on how to set freelancing rates, I took you through the basic math required to start earning what you're worth.Those rates can help you vault past your Survival Number and begin ratcheting up, project by project, month by month, to your Thrival Number.To do that successfully, you will need to differentiate between the internal rates that you use to develop quotes and the final, “external” pricing that you include in proposals and send to clients.
"Smart creatives, freelancers, and consultants sell outcomes, not hours."
If you sell your time by the minute or hour, you have no real incentive to work faster and smarter. But if you use your Thrival Number to determine your pricing, then you can reward yourself on the backend for your efficient workflow. As long as you give your clients want they want, what does it matter to them how long it took you to design a logo or write a video script?By selling something at a set price, you have, in effect, packaged up your services and time—“copywriting by the hour”—and turned it into a desirable product—“video script for $500.”[caption id="attachment_1037" align="aligncenter" width="1024"]
Photo Credit: Craig Garner via Unsplash[/caption]Productizing services is an indispensable strategy for earning what you’re worth. Here is a second example, along with four other ways to make more money:Strategy-as-Product – I get a lot of referrals, and most of my new contacts want to spend time with me, discussing their ideas. In addition, I get anywhere from 5-10 emails and calls per week from freelancers and creatives who want to “pick my brain.” (I think if my brain gets picked anymore it’s going to bleed.)In the past, my onboarding process went something like this:
- Initial call or email from prospect;
- Get-to-know-you meeting on the phone or in person;
- Discovery session to discuss client’s needs and project scope;
- Proposal that assigns a price to that scope;
- Yes or a No, preceded by a varying length of time and several follow-up phone calls and emails.
I typically know fifteen minutes in whether or not the person is willing or able to hire me for growth consulting or business coaching. To complicate things further, people tend to ignore free advice. Free consultations don’t produce results for clients because the client has no skin in the game. He hasn’t invested in his own success.Now, I rarely do free consultations. If the prospect and I live in the same city, I offer to let him or her buy me lunch. I’ll use the first half of the meal to get to know the person, and the second half is a 15-20 minute strategy session: “What’s a specific problem or goal that we can discuss?” I set this expectation when we first sit down. I give the prospect a taste of what it’s like working with me. The client walks away with a clear-headed understanding of what she wants and what to do next.I sell clarity, and I offer free samples. But if prospects ask for more time, more strategy, more coaching, more help, then I send over my flat rate for a more formal strategy or roadmapping session. At that point, they either get serious about investing in their own success, or they go elsewhere looking for freebies.If someone in another city, state, or country gets in touch with me, I ask three questions:
- “What’s the budget range?” followed by four or five different price ranges,
- “What’s the timeline?”, and
- “Who is the decision-maker?”
Those three details give me enough information to evaluate the prospect and take the appropriate route with the relationship: either a short discovery phone call (to create an A-ha moment) or a decisive “No” from me and links to Upwork.com and several blog posts.To recap, you can package up “What’s next?” and sell it to your clients as a product. Don’t be stingy with your time, but don’t waste it either.
"Respect for your time must start with you."
Retainer – I’ve sold a variety of retainers over the years. For a certain price, the client either receives certain deliverables—e.g., four blog posts per month—or a block of hours—e.g., $2500 gets you 20 hours of work.Once you’ve sold a retainer, I’d recommend hiring a talented freelancer to do the “fulfillment”: another $50/hour copywriter can do research and write first drafts for you; another WordPress developer at $75/hour can knock out the client’s monthly punchlist and any ongoing maintenance.You own the relationship, and you deliver the desired outcome: “smart content marketing via a great blog updated weekly with excellent new content.” But you offload the actual work to an A+ freelancer who would love to have it. You manage the project and get paid out of the retainer’s net profits.If you price the retainer appropriately and watch your margins, you can start hitting your Thrival Number while also minimizing your own time investment.As you learn the ropes of retainer relationships, you can even offload project management.Everyone walks away happy: you, your team of independent contractors, and your client.Word to the wise: Be sure to include the hourly rate for any overage hours in the retainer contract and to draw your client’s attention to that section. Retainers derail when either 1) you don’t deliver high-quality work in a timely manner, and the client feels disappointed or slighted; or 2) you do deliver high-quality work in a timely manner, and the client keeps asking for more, and you haven’t set clear expectations in advance about overage hours.The icing on the cake will be regular reports, which can and should be short and simple, proving that you have prioritized the client’s projects and have held up your end of the bargain.Bundling – The real cost, in terms of time and materials, of a desirable outcome, may be higher than you at first realize.For example, let’s say you’re pleased as punch to have just sold a new client a $12,000 WordPress site with some custom design and a basic membership area.But to really make that client shine, the site will need first-rate photography (of the client, her workshop, and her products), professional copywriting (nothing’s worse than beautiful design with the black eye of crappy copy), and several promo videos.If you sold only what you personally can fulfill, you’d be leaving your client with an unfinished and ineffective website.Instead, sell the complete package, the soup-to-nuts solution.That solution may include project management (after all, you’ll be managing relationships with a photographer, writer, and videographer), content and marketing strategy (clients inevitably seem to ask, “What should I do with my blog?”), and regular social media updates (the copywriter can generate the material, and you can hire a virtual assistant to load everything up in Buffer and schedule the posts).If possible, don’t sell only your specialization. Sell a complete solution that fully addresses the client’s immediate needs and long-term goals.Other People’s Stuff – I already touched on this in the last Bundling section. Do you know what’s great about selling other people’s stuff? You make money without doing the work.You own the client relationship, and you create value for your clients by identifying a need, sourcing affordable talent, and connecting your client with a specialist that he could not have easily found on his own. You curate a rich network of talented specialists and sell access to it. In doing so, you can create and sell a certain type of experience.You also get to create value for other freelancers by sending them referrals. You have, in effect, done their sales for them.Selling other people’s services and stuff enables you to separate your income from your personal inventory of billable hours. You sell their inventory instead and account for your own time by earning a commission.How you structure your own compensation may vary from situation to situation, and this type of financial arrangement goes by various names. Marketing and advertising agencies call it “mark up.” You can also think of it as a “finder’s fee,” “referral fee” and “sales commission.”The most successful creatives I know learned this early, and practice it often. Sell a $3000 identity design package. Find a young go-getter who would be thrilled to make $1000. Make your margin, give your junior designer a bonus for beating the deadline, and get back to nurturing your client relationships.Minimum Engagement – What do you do with those clients who can't make up their minds about how to proceed?We've all been there. You meet with a prospect, and they decide that they like you and that you can help. You meet to talk about one small project but open a can of worms. Halfway through the conversation, you realize that they need rebranding AND a new website AND content marketing strategy AND lots of new content. Right as you start to feel some momentum, you hear the fateful words: “Okay, let me wrap my head around all this and get back to you.” "Let's wait until so-and-so can meet to make a decision.”"Let's wait until…" has been the death of many a promising project (and potentially lucrative client relationship).Do you do a couple more marathon meetings with hopes that the scope will eventually come into focus?No. You introduce your minimum engagement. You politely yet firmly navigate such meandering conversations into the safe harbor of a closed sale.Lots of prospects with real budgets don’t know what they want, or they change their minds as they answer your questions. A minimum engagement affords them the opportunity to gain clarity, and you the opportunity to build rapport while getting paid.Minimum engagements help to cut down on superfluous discovery meetings, education sessions, and exhaustive proposals.If a prospect wants to work with you, easy: she has to spend a minimum amount of money.When new prospects can’t make up their minds about where to start, I say, "No problem. I'll go ahead and send you an invoice for my minimum engagement. After you sent the payment, we'll schedule a roadmapping session and help you get some clarity. That’s how I start new client relationships."They’ll either say yes, or they’ll waffle. You will start closing more sales, wasting less time, and making more money.They spend that money to identify goals and diagnose problems, and then you sell them a bigger solution.So yes, stop selling hours. Sell solutions, outcomes, and products instead. Experiment with various ways to make more money, and your bank account will thank you.There you have it, folks.Did you find value in this blog post? Please sign up for my weekly newsletter. I’ll send helpful freelancing tips your way.
