One morning you wake to find that the pillow covers you left soaking in the bath overnight are no longer surrounded by water. You go downstairs to find the contents of said bath across the kitchen floor. The paint is peeling from the ceiling and your cat is looking at you quizzically “Can I drink this?”.
You don’t have the time, knowledge or patience, to fix this yourself so you contact the local emergency plumber, Hamish, who confirms he can be there in five minutes. Hamish arrives bang on time and manages to locate and fix the leak wihin 10 minutes. He tells you that it’s nothing to be concerned about and you just need to wait a few days before attempting to fix the paintwork. Thankfully, you can go ahead and take your morning shower as usual. He charges you £200 and is on his way.
The job only took 20 minutes, so why can he charge £200?
This is the principle of the ebook, Breaking the Time Barrier, How to Unlock Your Earning Potential by Mike McDermott and Donald Cowper.
In this post are my three main learnings from this ebook about freelance rates and pricing.
Time is Time, Money is Money
Breaking the Time Barrier is a short read at just 60 pages (around one hour), but it successfully challenges the relationship between value and time. Morever, that money is not equal to time. Hardly a revolutionary concept, but an antithesis of what we’re often conditioned to believe as freelancers or employee in the abyss of capitalism.
The book tells a story of Steve – a web designer who often undercharges to keep business flowing, and Karen (no, not that kind of Karen) – a web designer who seems to charge whatever she likes, successfully.
In the story, Steve learns Karen’s business “secrets” to building a profitable web design business. He learns how to “break the time barrier”. It’s relevant to freelancers and business owners, as well as corporate professionals who are hatching their exit plans. Here’s the rundown:
1. Understand the Ask
This may seem like common sense. But it’s incredible how many times we all forget it. Steve, our struggling web developer, likes to be upfront about pricing, he states his rates from the offset. Karen on the other hand, first seeks to understand her customer before discussing pricing.
How can we determine pricing if we don’t know what’s required of us? Is it more taxing to do press-ups for one hour or walk for one hour?
Before even agreeing to take on a new customer, Karen gets to know them, and she encourages Steve to do the same. She seeks to understand the pain points of her customers, which problems need solving, what their goals are and what success looks like. She explains that many customer aren’t aware of what they want at all. So just having the conversation helps form a relationship and see her as more than just a web developer. Which leads to the next point.
2. You’re an Investment, Not an Expense
Steve is a talented developer but he’s still scraping by. He charges the market hourly average for web development but he can’t always cover his expenses. But Karen is a six figure earner, who charges $20,000 for a single website.
Steve loses his clients to people like Karen, because people like Karen frame their services differently to Steve. Karen understands what her customers need and together, they can create a strategy to get it. Karen’s customers see her as investment in reaching their goals. Karen focuses on the benefit of working wit her.
3. Create Value
As Karen says, “When you present prices up front, you make price your distinguishing factor, not your ability to deliver results.”
People want their problems to be solved, their prayers to be answered and their dreams to come true. If you can help them in some way, you are of value to them. The more value you can create for them, the more valuable you will be.
I won’t regurgitate the contents of the ebook, but there are seven mutual benefits of exploring value creation with your clients. You will find them on page 34.
You can read Breaking the Time Barrier for free here. I am a customer of Fresh Books but do not receive anything from promoting their content. Here are some other great resources which I am also not affiliated with: