October 24, 2017
Success story from reader “Beyonce´”
A reader sent in the following success story (Shared with permission. Bold mine. Name withheld by request, so I’ll call him “Beyoncé”):
Hey Jonathan,
I’m writing to you with excitement, and to say thank you. I’ve just had my first proposal accepted in starting out my own consultancy, and have bypassed charging hourly entirely, going straight to value pricing. I used a stack of different techniques I’ve learned from you over the last 12 months of being on your mailing list/HBIN in getting to this stage:
- Created all my collateral (LinkedIn, Website etc) using an LFPS
- Broke some of my fears around outreach and networking by applying the “just talk to people, and offer to help them out” principle. Not sure if this is something you’ve directly talked about, but the recent conversations about outreach definitely helped me reshape my view on networking. This led to a contact taking me out for coffee and offering me a project
- Used the Why conversation to uncover the drivers behind them wanting my involvement in the project, and determine ballpark pricing
- Created 3 options, the top one including a retainer agreement to smooth out handover
- Used the Might-as-Well (1x, 1.5x, 1.75x) pricing curve to guide the prices for my 3 options
- Estimated the time it’ll take me to do the project as a range, from best- to worst-case
- Calculated my own “Meh”, “Sure” and “Hell yeah!” prices based on the worst-case estimates and a solid day rate
- Factored in risk I’m taking on, how much I want the gig, potential for case studies/testimonials given it’s my first client etc
- Created and used my own proposal template based around your example project proposals (5 page, no fluff)
The result was pretty amazing:
- Client called me in under 2 hours of pressing “send”, saying “we’ll take Option 3 please!”
- They sounded legitimately thrilled at the pricing, and were also very impressed with the short time it took me to get the proposal out and the quality of what was provided
- My effort on this gig will be 1-3 days a week over 8 weeks, and the price they’ve selected represents my business’s break-even costs for the entire financial year. In one engagement. And it doesn’t even require my full-time involvement! This will leave plenty of slack for other interesting things such as continued business development, perhaps building out some IP to reduce my time invest for future gigs, and probably coffee and beach time 😀 (down-under, coming in to summer)
I’ve been able to do all this even though the gig is a subcontracting arrangement, where I’m helping another consultancy deliver a fixed-priced gig that they’ve committed to, but they are so pressed for people at this time of year that they can’t resource it, and the tech stack is a bit outside their norm, but smack in the middle of mine. There’s disadvantages to this compared to if I were doing the project direct and it’s not my long-term preferred approach, but there’s also advantages (I didn’t have to find and win the work with the client): so I just factored this all in to my price. In the worst case, I could literally work full time at this gig all year and still break even. Depending on the time I actually end up investing, value pricing represents somewhere between 75% and 400% increased revenue for me compared to if I had have given them an hourly rate.
Hell yeah!
Cheers,
Beyoncé
Well done, Beyoncé! Thanks for sharing :)
Yours,
—J
P.S. Need help achieving results like these? My mentoring program includes six months of unlimited emails, phone calls, and 24/7 access to my private Slack community. There has never been a better time to apply -> https://jonathanstark.com/mentoring