Radically More Profitable Web Design (free video workshop)
00: 00 – How to value-price digital marketing
00: 45 – Value-pricing vs. hourly billing
02: 47 – How to price results
04: 15 – Sales funnel metrics
06: 07 – My experience with clients
08: 28 – How to get traffic and leads
10: 05 – Client conversion factor
12: 53 – Value-pricing digital marketing example
I used to price my web design projects based on time and effort – basically hourly billing. Even if was doing a project price, it was still basically hourly billing where I’d estimate the hours and then add a thin profit margin on top. The problem with this is you’re guaranteed to always have thin margins (almost no profit) in your business forever because that’s how the pricing model works. Whether it was web design, digital marketing, social media management, etc. it didn’t matter. You put a thin margin in every project on purpose.
Clients Value Results Not Time and Effort
To prove the point, suppose you hire me to do lead generation for you. I offer you three options.
A) I snap my fingers and double your revenue right now.
B) I work really hard for you and after a year you double your revenue.
C) I work really hard for you but even after a year your revenue remains the same.
If you’re like me, you pick option A every time because doubling your revenue now is better than doubling your revenue a year from now.
I put option C in there just to prove the point that nobody cares about time and effort. The package that only includes time and effort is clearly the worst option.
The hierarchy stacks up like this.
Results now is better than results later.
Results later is better than no results at all.
How Do You Price Results?
Most people who are new to thinking about value pricing feel confused and even uncomfortable talking about results because what if you try really hard but the results just aren’t forthcoming?
The truth is you’re not going to hit a hole in one on every shot. Some stuff will work right off the bat, some stuff takes time before it’s dialed in, and some stuff just doesn’t work at all.
The value is in the system, not the individual trials.
Once I realized that everything changed. Here’s how it works.