[00:00:00] Brian: Welcome back to another episode of the six Figure Creative podcast. I am your host, Brian Hood. I'm with my wonderful, cute, little substitute co-host. hot rebound. Mark Eckert. Good to have you back.

[00:00:09] Brian: My dude. I'm me go ahead and just set the record straight here for this show. this is your first time listening, I'm so sorry. This is not gonna be a normal episode. I'm jet lagged. my care right now is in an all time low, so it's just one of those episodes where like, Brian Hood is not here.

[00:00:25] Brian: We've got a completely different character hosting the show today. We need to have like an alter ego for me when I'm in one of these moods, but it's just, it is what it is.

[00:00:32] Mark: me. I'm the hot rebound dude. I'm always the hot rebound story of my life. Dude.

[00:00:37] Brian: Well, Let's just talk about this show. If you are new to this show, I will give you a little bit of a spiel.

[00:00:41] Brian: This show, we try to talk about how to turn your creativity into money. We do it in ethical ways. We do it in ways that are sustainable, in ways that are not about waiting around, clients to find you and taking it on your hands. I that's been my approach my entire life.

[00:00:52] Brian: That's been your approach to your entire life, mark. We're both I guess you could say go-getters,

[00:00:55] Mark: the main thing is that we do it tastefully and that's a very, very rare thing

[00:00:59] Brian: That [00:01:00] is, that is, that's a debate whether you're tasteful or I'm tasteful

[00:01:03] Mark: I'm an acquire taste though, baby

[00:01:05] Brian: That's true. Yeah. You're in a acquired taste.

[00:01:08] Brian: yeah, so I just got back from my trip. I'm still jet lagged, but man, that was a heck of a trip and we didn't even really get to talk about it much.

[00:01:13] Brian: We chatted yesterday me, me and Mark just chatted on the phone for like an hour yesterday to kind of catch up. man, I gotta say, me and my wife will be back to Bali. We will be back to Thailand again. We had so much fun. just to sum everything up, it was 67 days of

[00:01:24] Brian: travel. It was delightful.

[00:01:26] Brian: We still worked. I still got all this stuff done that I needed to get done. I did some solo episodes cause I didn't have you cuz we were on such a weird time zone difference where But back at it. Here in the US in Nashville, Tennessee, we're now just only an hour difference with each other, mark.

[00:01:38] Brian: And we can get back to some of our fun co-hosted episodes together. So today we have a fun episode planned out. I don't have a title for this yet. As of the time that I, I'm recording this. We have the outline of this show, but it's like tentatively like why you should charge as much as humanly possible. the.

[00:01:51] Mark: gonna start charging for these podcasts, bro.

[00:01:53] Brian: Okay,

[00:01:54] Brian: we're gonna get into the ethics behind this, ethically, I think it is better to charge more than you currently are. There is a lot [00:02:00] of benefits to charging more, and I thing we're trying to address today is so much of our audience, especially creatives are perpetually and habitually undercharging for the services they're delivering.

[00:02:09] Brian: And there's a lot of reasons for that. could be buddy rates, it could be, maybe you have lack of confidence. It could be bad, unhealthy mindset around money. It could be that you're just bad at what you do, which is always something get to be improved on. But this is something that I me and Mark in all things that we do or we tend to be more on the premium side.

[00:02:24] Brian: were talking about sales one episode. I don't remember what episode that was back. It'll be in our show notes, but it was an episode where you closed like a half a million dollar deal. had a call literally after the episode was over, after we had talked about the things you wouldn't wanna cover on every like, I think the episode title, something around like seven things to cover on every sales call. You close at half a million dollars deal and you just got paid for it.

[00:02:42] Mark: all going out to you that pitch members, which is cool. So, feeling good, man. Uh, it's been a good couple of weeks ever since you've been gone. I've been doing really well, so I'm, I'm very interested now that you're back.

[00:02:53] Brian: Yeah, you're like, I hate that you're back now, Brian, cuz now I'm not gonna be doing as well. so me and you were both on the premium pricing side and a lot of things that were due I've always been that [00:03:00] way, whether it's my Airbnb, whether it's my studio, whether it's my coaching, whether it's my software, like I'm on the upper end of the spectrum on most things.

[00:03:06] Brian: I think easy funnels is probably the only thing that I have. That's not what I would consider like premium pricing, although that might change in the future. Who knows? So maybe get in there

[00:03:13] Mark: I use Easy Funnels for all of my sites.

[00:03:16] Brian: I do too. But let's talk about some consequences of undercharging first because this is something you have to face if you want to keep charging low rates. So the first thing is and, and this is in no particular order by the way. The people just don't trust you. If I looked at a lineup of people offering similar services to you and you're the cheapest one, I as somebody who. higher quality client Cause I hire freelancers all the time, by the way, I not just somebody who offers services. I'm not just a creative, I hire creatives all the time. So when I look up a line of the people that I'm looking to hire, the one with the lowest rates are the ones on the bottom of, the pricing field I don't really trust.

[00:03:50] Brian: And you'll see that in a lot of industries, not just creatives, like in the construction industry, when you do bids on a project, they will throw out the lowest, they'll throw out the highest, they'll pick someone in the middle. And that's just like the inherent thing [00:04:00] of when you undercharge people don't trust it because they'll say, what are they gonna not give me for that price that I'm getting with this other person who's charging me this Maybe a little more or maybe a lot more?

[00:04:08] Brian: What am I not gonna get outta this? Where are you cutting corners? And that's inherently the message you're giving when your prices are too low.

[00:04:14] Mark: actually funny because , I had a call with a music distributor and really cool company. We might do something together. And they entirely free up front and you get a hundred percent of the royalties, which is cool, but they make money off of like upsells and stuff like that.

[00:04:31] Mark: And they were saying like, we're actually having issues getting anybody to join. Cuz like, nobody trusts that it, it's actually gonna work.

[00:04:38] Brian: it's it that's in software. It's in software too. I see this all the time. There's an invoicing tool a bookkeeping app. I it's called uh, wave Apps or Wave

[00:04:45] Mark: yeah. I don't use them. I don't use them and they're great

[00:04:48] Brian: They're a hundred percent free, but all the time I see people bringing up, so how do they make money?

[00:04:53] Brian: even when it's like free app and it's actually a pretty cool tool and, and, I pay some of my freelancers out through that cuz they use this. I'm not saying we [00:05:00] endorse it or we use it, I'm just saying this is one that I've seen being used,

[00:05:02] Mark: endorse it, but I don't use it. I actually don't really know much about it, but definitely use it.

[00:05:06] Brian: I use zero.

[00:05:07] Brian: But there's a lot of people that question that, when you're not being charged to use a product, there's usually someone making money somewhere. And that's what we saw with Facebook. That's what we saw with the Cambridge Analytica stuff where you are the product in that case, and I'm not sure what the case is with, wave, I'm sure they'd monetize in some ethical way, but I'm just saying that the low rates or lack of money being exchanged is a red flag in a lot of things.

[00:05:26] Brian: And so when you undercharge, this is not a good thing.

[00:05:29] Mark: actually the way that Wave makes money, cause I actually looked it up, which is you have to file like big upfront fee or something. I use QuickBooks Self-employed with Turbo Tax.

[00:05:38] Mark: It's

[00:05:39] Brian: I feel like TurboTax is something that like, boomers use,

[00:05:42] Mark: you know, it's, it's funny, like you use it by itself, it sucks. But when it is linked with the QuickBooks self-employed plan, there's like a thing they have where it's like you join and they give you however many months free or whatever, and it links automatically. If you buy them separate, they can't link.

[00:05:58] Mark: It's so dumb. But if [00:06:00] you buy like this one plan, it's like all in one and I get have my team just kind of go through all of it. And a year I spend like 10 minutes just reviewing it and I'm like, yeah, this sounds about right. So

[00:06:11] Brian: Well, I use, I use zero. This is my first year of using it. I will report back a, whether I like it

[00:06:15] Mark: I've heard good things about zero actually. thing's about taxes. Dude. Let's talk about taxes.

[00:06:18] Brian: no, I We'll talk tools later on. Let's, continue on this

[00:06:20] Mark: gear alert.

[00:06:21] Brian: This I'm not all there right now.

[00:06:22] Brian: Everybody, it is 3:30 PM in the afternoon right now in Nashville time, which was like four or 5:00 AM Bali time. So I'm all outta sorts right now. but yeah, so let's, about it so people don't trust you when you have low rates or when you're charging nothing in, in the case of software. But the other thing is those people that do are seeking out low rates. Those are the worst clients. So you're attracting bad clients when you have rates that are too low. This is actually one of the perpetual cycles you get yourself into.

[00:06:46] Brian: It's, I have a, maybe a lack of confidence or bad mindset, my own money. So I'm gonna undercharge and then that's going to. push away the premium clients who are looking for the best, they're not looking for the cheapest, looking for the best. It's going to attract the bottom feeders who are [00:07:00] looking for the cheapest.

[00:07:01] Brian: And now I try to quote a different price, a higher price to start inching that up, you start getting pushed back on the pricing and you're like, stuck here.

[00:07:07] Brian: I can't ever get out. So it's this vicious cycle of going down and it just hurts your confidence further. Next is the business just can't work on paper. So this is where we get into like spreadsheet math, spreadsheet math only goes so far. It's fun to play with when you have a spreadsheet.

[00:07:19] Brian: I'm like a spreadsheet nerd. I dunno if you are Mark, but

[00:07:21] Mark: love a good spreadsheet,

[00:07:22] Brian: Me too. end of the year, I go off and I do a full plan for my business. I do like vision and I do like, what are the products and what are the, the offers and the services and the things that I wanna take away or add?

[00:07:30] Brian: What are the pricing, all this stuff. And I put stuff in the spreadsheet. I model my whole business out and that's wonderful. But when you actually like put it into practice, that stuff can fall apart. So take this with a grain of salt, but when you undercharge, business model is broken.

[00:07:44] Brian: You have less options for growth. You have less options for improving your business. You have less options for your personal life to take profit out from the business There's so many things that go

[00:07:53] Brian: wrong you undercharge, and if you just looked at, put it on a spreadsheet, it would be clear as data. That just

[00:07:58] Brian: doesn't work.

[00:07:59] Mark: term that [00:08:00] I always try to like refer to uh, kind of a pricing plan with anything.

[00:08:04] Mark: If it, pricing plan depends on like how many people I'm serving, and it's called critical mass. And what critical mass is, is like how many people do you have to serve at a certain price point for you cover the cost to serve them. So monthly expenses are five grand a month, right?

[00:08:22] Mark: charge a thousand dollars a month for you need five people a month. Can you serve those five people at that caliber at that month? If you can't, that means you need to charge more.

[00:08:32] Brian: Yeah,

[00:08:32] Mark: if it's like no work for you at all and it's super easy.

[00:08:36] Mark: Okay. You can be more competitive and lower the cost and get more people on. So understanding what's the minimum you need for break even and how that equates to how many people you're serving per month. That's been very, very important for me. always keep in mind because I the numbers in my head, if I can do a deal or something like that.

[00:08:55] Mark: Does that make sense?

[00:08:56] Brian: Yeah, but I'll also push back on that and this is where we get into spreadsheet math

[00:08:59] Brian: versus real

[00:08:59] Mark: [00:09:00] mad.

[00:09:00] Brian: Your clients don't give a shit about your personal expenses. They don't give a shit how long it takes you to do a project. They don't care about any of that stuff.

[00:09:07] Brian: And so what you need to make in pay your bills your client doesn't care about. they only care about what they're getting out of it. And if you're not offering something valuable, then you're not gonna be able to charge what you need to

[00:09:17] Brian: charge if you need to raise your rates. So, again, we're gonna talk about this more on how to raise your rates, what you need to do for that. But this is where I'm saying the spreadsheet math has to work, but then it also has to translate to the real life, which is a completely different story. I'm not saying you, you don't do that or consider that.

[00:09:29] Mark: getting the chair and knocking you on the head with it later. I'm, I'm going full on wwe. I'm so upset that you just fought back on my opinion.

[00:09:36] Brian: All right. There's an, there's another hidden danger here of, habitually low rates, and you're a forced marketer. And here's what I mean. If you are undercharging, I think I've talked about this in past episodes, where you just have a really low client value because you're charging so little.

[00:09:50] Brian: You are forced to get a lot of clients in order to make the amount of money that you need to make in order to pay your bills. So let's just go back to that $5,000 a month example. let's just actually use 10,000 a month. It's closer to the six [00:10:00] figure mark because we're the six figure creative here. If you're trying to make 10 grand a month and your clients are only worth 500 bucks each because you're so undercharging, then you now have to get 20 clients a month, which is generally like 40 to 60 sales leads a month, which is a lot, or now have to be a full time marketer. You have to know how to run funnels and paid ads and content, and you have to do split tests and it becomes a, it chore to run that business. And, going back to our audio roots in the music production world. Mark as a mastering engineer, that's kinda the business. You're forced to run. You have to, figure out ads. You have to figure out how to automate projects and become a systems expert and things like that.

[00:10:32] Brian: staying on low rates sets you up to become more of a marketer than a freelancer. And I don't really want that for audience unless you are drawn towards it, unless you like that sort of stuff. You're a numbers nerd and you wanna be a market. Go for it. But if you want to get out of that world and focus more on fulfillment and being a creative, then you need to charge more appropriately.

[00:10:50] Brian: And then the final consequence of just staying in low rates is you're always rest on projects. And I can remember when I first started out and I was like, really low rates, which again, I'm not saying that you shouldn't start in low rates because a lot of us, [00:11:00] that's just how we get started. But you have to move on beyond that.

[00:11:02] Brian: When I was in my low rate days back in the like 2009, 2010, I was always rushed. I always felt this big need get through projects faster because I was getting paid so little on them.

[00:11:12] Brian: And this is because I was doing flat rates and that's part of the negatives of flat rates as well.

[00:11:16] Brian: There's some positives of it as well, but I'm just saying that's how I felt. And so if I'm always rushed on projects, the quality is diminished as well. I dunno if you have anything to add to that mark, but

[00:11:24] Mark: Yeah. I mean,

[00:11:25] Brian: I have.

[00:11:25] Mark: I think, kind of what you were talking with flat rates. Um, actually didn't really go through the, the low pricing thing ever with a freelancing. I

[00:11:34] Brian: You don't know what it's like then you can't relate to us low rates people, man,

[00:11:37] Mark: yeah, I did charge one guy a track. It was like 400 bucks or something like that.

[00:11:43] Mark: And funny. He like paid me in full and then, . know what happened, but just like, stop working on it. I, I still can't get in touch with the guy, Michael, if you are out there. about eight or nine years. Forgot his last name, but if you're out there, I'm happy to finish the track.

[00:11:59] Mark: Actually, [00:12:00] I'm not anymore. Uh, after that I was like, this is terrible. And then I just bumped my price. I'm like, I'm not doing anything for less than a thousand. I, had you around and like some other, some other that

[00:12:08] Brian: Yeah, you're better at seeking help than I am. I'm, I'm I'm the idiot that's just gonna keep banging my

[00:12:12] Mark: I am my mother's son. I am my mother's son. I nag everybody, but uh, I think I do it lovingly.

[00:12:18] Brian: you do. Yeah. You're good at it. All right, let's talk about the um, what instead of undercharging, perpetually.

[00:12:23] Brian: The thing we're trying to get our audience to do is charge as much as humanly possible, not really. don't want you to just like blindly raise your rates until your, clients are blood dry. But, even worse is raise your rates until no one will hire you.

[00:12:34] Brian: But there is a threshold where it's a win for you and a win for your client. And I think most creatives, they struggle to get the price to the point where it's a win for themselves and their clients. Instead, they just make it a win for the client they sacrifice themselves for that.

[00:12:48] Mark: quick, I just wanna chime in before I forget it cuz I'm exhausted today. But talking about, you know, a win for both. Here's the thing is there's pros and cons to either side for pricing. So, go on either side of the [00:13:00] spectrum for really cheap or really expensive, one of you is gonna stop at one point.

[00:13:05] Mark: So if you're really cheap, getting the deal of a lifetime, but you're miserable and you're exhausted and at a certain point you're like, I can't really work on this again. So like, it just becomes burn out or you don't do a good job or whatever. If you, other hand though,

[00:13:16] Mark: you need to charge enough where it's good for you and good for them. But what people don't take into account is called, lifetime value of the client. If you charge too much seen this all online, people will charge uh, expensive for something and don't hear them have repeat customers.

[00:13:36] Mark: If you have a repeat customer, that's how doing a good job in business, so you want a price point where you're not gonna get all the money out of them right now, but they're gonna continue to work with you 10 years from now. So you need to put a price point where both of you would wanna work with each other in the future.

[00:13:52] Brian: I'll give you some benchmarks. I'm gonna give some real numbers here cause I do

[00:13:54] Brian: like advice like this, but I don't like keeping it nebulous and like vague. I, with

[00:13:59] Brian: my coaching clients[00:14:00] I like to see around an average annual client value of two grand. So a client is worth around two grand in a year. And that could be lower for some people, it could be higher for some people.

[00:14:10] Brian: My average annual client value is higher than that, but I wanna see two grand per client on average. And then I wanna see about 70% of those clients come back to you the next year if it's a one time. 70% of your clients repeat the next year. And you can track all this in a, in a good crm or if you're in recurring, you have about a 70% retention rate throughout the year, meaning if you have a hundred clients in a year, which is a lot, I'm not saying you would have that many, but if you had a hundred clients, 70 of them would, with you by next year. So those are two like benchmarks and metrics. You can look at your own business right now and say, am I hitting these? If, not, I'm probably vastly undercharging or I'm not fulfilling on a good service, or I'm extracting more value than I'm adding.

[00:14:45] Brian: before we even get into this stuff, we kinda jumped the gun here, I wanna talk about the benefits of charging more. Cuz there are some really, really good benefits that I think people overlook when they hear the, the advice charge more blindly.

[00:14:55] Brian: They'll think about why, why would you wanna charge more? It sounds

[00:14:57] Mark: A lot of it's,

[00:14:58] Brian: The more you charge, the more you can do for your [00:15:00] clients. That is a fact. That doesn't mean that everyone that charges more does more for their clients.

[00:15:03] Brian: Some people try to cut costs and cut corners while charging more because they want more profit. But then you get into this horrible world where you are extracting more value. So because you're charging more and you're doing less for them, so you're giving less value, which means the lifetime value for that client's gonna go down because they're not gonna come back to you next year.

[00:15:19] Brian: They're not gonna refer clients to you. So you're not getting the recurring client effect. So it really, if you looked at lifetime value, and honestly, I wish there was an easy way to track this if you looked at lifetime value as the total amount spent from that client.

[00:15:31] Brian: And the total value of projects referred to you from that client. It would be some interesting data to look at if you could really track that. But that's really difficult and beyond the scope of what most freelancers can do. add more value and charge according to that.

[00:15:43] Brian: means you can do more for your clients when you charge more, spend more time, do more cool stuff, add more things, invest in your business you can actually reinvest into things that will grow your business, whether it's gear, equipment, facilities, ads, just getting into ads.

[00:15:56] Brian: You cannot profitably run ads as a [00:16:00] freelancer if you're undercharging, because, is gonna vary from industry to industry, but this varies by the quality of ads you're running, but just to give some rough numbers of benchmarks, you're gonna spend between 500 and $1,500 to acquire a customer, depending on how good you are at everything.

[00:16:13] Brian: So if you are charging $500 for a customer that is. Costing you $500 to acquire. you just broke even to acquire the customer. And so you're working for free. Now, if that person comes back to you year after year, you could make an argument that you, you profited there. talk about Alex Mo on the show a lot, and maybe we'll talk less about him in the future, but like one of the things he, he is known for is, he's incredible at creating a valuable offer.

[00:16:36] Brian: He has a book, a hundred million dollar offers, and while he's not a, freelancer, there's so much we can learn from him and he has created something that's so valuable that his average client value is 40, or $50,000 a year. That's so when your average annual client value is $50,000, do you think that he struggles to profitably acquire customers? Absolutely not. His lifetime return on ad spend is like 36 or 38 to one. So if he spends a [00:17:00] dollar, he makes $38 back. can spend as much as he wants on customer acquisition. His bottleneck is fulfillment to hire the team to fulfill on the work to make sure they're getting the value so they stick around and keep coming back year after year as freelancers.

[00:17:13] Brian: Again, we can't even begin to explore that as an option for growth in our business if we are not charging a high enough amount to, profitably acquire customers. Again, paid ads are not for everybody. get me wrong here. This is not a world that everyone should explore, but you can't even play in that ball pit, that McDonald's play place if you don't charge enough. Next thing is like, If you charge more, you have more profit margins, you could take a fucking break.

[00:17:38] Mark: can go to Bali

[00:17:40] Brian: you could go to vo. Yeah, yeah, yeah,

[00:17:41] Mark: Hey, uh, my wife and I, we just went up to. Maine for like a week and a half, just cuz that's lifestyle design.

[00:17:48] Mark: That's what it's all about is your business, you know, or whatever should support the life that you want. It shouldn't be the other way around where

[00:17:55] Brian: and some people listen to the show. They're just like, just wanna create all day, every day. That's all I want to [00:18:00] do. And they're struggling with the business element of it, which is why you're listening to the show. So kudos to you for even giving this show a chance to make a better business. Sometimes being a creative is greedy, . We're not creating value for our clients. We're just creating what we want. So when you do charge more for and create margin in your life, then you do have more time to focus on the things that creatively fulfill you.

[00:18:18] Brian: So it can be travel. We love travel. I love travel. Mark, you love travel. Not everyone loves travel, but you can, you invest your extra time, your margin into whatever you want, whether it's new skills, whether it's just being a creative for creative sake, whether it's doing charity work, whatever you wanna do.

[00:18:33] Brian: but if you are perpetual under charging and barely scraping by or trying to juggle your creative business while juggling a day job, which is the hardest thing to do,

[00:18:42] Brian: you have no ability to take a break.

[00:18:44] Mark: work out every single day and you eat really healthy and you're very strict, or if you let yourself go and you don't take care of yourself and then you start having health problems, either way it's.

[00:18:58] Mark: no easy, easy It's just which [00:19:00] path are you going to choose that difficulty? It's listen, if you want to have a, a job and like do this on the side and like, Hey, you make an extra a hundred bucks or something from a gig, cool. If you want a little bit more than that, then these are the steps you have to take.

[00:19:12] Mark: And that, gonna be hard having a nine to five being subservient to somebody else, them telling you what you have to do every day, and then you work on your, your creative outlet and maybe make some money off it or just have for fun. gonna be hard. It's also gonna be hard building a business.

[00:19:29] Mark: But the cool thing is if you build your own business, you can have a lot more control over how much money you make. That money can equate to time, and that time can equate to how much you can give to your creative outlet. I, still believe that the most creative, successful artistic people that I know.

[00:19:50] Mark: Are full time in it. And they are incredible business men and women because they've been able to buy back so much of their time to just focus on that next [00:20:00] step for them.

[00:20:01] Brian: So let's give some some tactics here as far as like, what can we do to charge more? If you were like, okay, Brian, okay, mark. I'm ready to charge more, but I don't know how, I don't know what to do. I don't know why I can't raise my words. I've tried the past. But it hasn't worked. People keep shooting me down.

[00:20:13] Brian: So we have some dos and don'ts for this episode.

[00:20:16] Brian: First, let's just talk about how to charge, and this is like stupid basic 1 0 1 freelancer stuff here, but don't charge per hour or day. do price for outcome. This is called value-based pricing this is one that I think people struggle with because a few reasons, and this can vary by industry. So I'm just gonna give my experience from, from people that I know and coach and have, my industry background in the audio world.

[00:20:36] Brian: But most people wanna default to charging per hour or per day. And the reason is they are stuck in the blue collar mindset of, I'm trading dollars for hours. And want the certainty that I will earn this amount guaranteed with every project. And I understand this to some extent, especially when a lot of the ball is in the client's court.

[00:20:54] Brian: Like my world with the, with music production, a lot of the times if the client came in and they were bad at their instruments or they [00:21:00] weren't prepared, it would take a lot of time versus someone who came in prepared. So I understand in that world where you would want to do that, but it's not really the most efficient way scale your income to disproportionate amounts.

[00:21:10] Brian: So you will like always be capped at like, 50 bucks an hour, maybe in some industries, a hundred an hour, even 150 bucks an hour or whatever. But when you go to flat rate pricing, you open yourself up to so much more opportunity for crazy income multiples. I actually have a YouTube video. It's one of my more popular ones of how I earned $300 per hour mixing heavy metal music, it's actually over 300 in an hour, but it's heavy metal music.

[00:21:32] Brian: These people were working like fast food jobs. 95% of my income was from unsigned independent artists, and I was able to earn 300 plus per hour, not because I charged that much per hour, not because I had a day rate. It's because I did flat rate pricing and then I created a great system for fulfilling it on the back end.

[00:21:49] Brian: So there's a bunch of ways to look at this and shape this around, but at the end of. Charging based on the value you provide, allows you to reap the rewards on the back end of that. As long as you put [00:22:00] the boundaries into place and the systems into place to mitigate the potential downsides of flat rate pricing, which is the client eating up your time.

[00:22:07] Brian: You can put policies into place, you can put boundaries into place. You can put things in your contract that protect you from that stuff, but you will not escape the flat, hourly world, if you become a business owner, I don't wanna get paid per hour.

[00:22:20] Brian: I wanna get paid based on the value I create. So I'm no longer an employee, so I'm gonna get away from hourly charging and daily charging. I'm going to charge based on the flat value I create, and then it's up to me to create a business that can sustain itself and add more value than I take from the world.

[00:22:34] Brian: that's half the battle.

[00:22:35] Mark: I mean,

[00:22:36] Mark: Also if you charge hourly, you're incentivized to work slowly and poorly.

[00:22:40] Brian: another,

[00:22:40] Mark: renovated the house and like we had plumbers come in, we had electric people come in, we had painters and stuff like, all were saying what they do hourly.

[00:22:49] Mark: And I was like, very cool. I need a flat rate. So what I have budgeted aside for this. Take it or leave it, or I have to give someone else a call. So And some people said no, and some people were like, sure that [00:23:00] works. And what do you know?

[00:23:01] Mark: They worked really fast and they were out in like a half hour, like, cool because exactly what I was getting myself into. you are the service provider um, do is you have outcome together and then you have, restrictions on part by the customer.

[00:23:17] Mark: So like for production um, I'm producing like an indie pop or synth pop record or something, I charge per song. I know that it's gonna take me. three days at max. Usually it's two days. First day I do instrumentals, second day I do vocals and like refinement work. And the third

[00:23:34] Brian: this just comes down to coming up you know, your process the back of

[00:23:36] Mark: I have a buffer period. And there's no more after that. And if there is, there's an additional fee. And there's only two sets of revisions. And after two revisions they charge. And what do you know? I've never had someone ask for more than two sets of revisions. So just like like direction and they like knowing what they're getting themselves into.

[00:23:55] Mark: So hourly it can just creep, just as simple as possible.

[00:23:59] Brian: It's the when I hired [00:24:00] somebody to create the podcast art for this very show. It was a designer based outta Seattle, wonderful guy. he charged a flat rate. He didn't charge per hour. He he had the entire process laid out every single day that I could expect my deliverables when he needed to have the revisions back.

[00:24:13] Brian: directed the entire show. I was just there long for the ride, even though I'm the paying customer and I love the experience this works really well. you don't have to do an hourly fee. So again, this is just part of being a business owner and, and I hope that all of our listeners move away from day and hourly charges and start pricing for the value you provide.

[00:24:29] Brian: Now, let's move to the second thing because this dictates what you can charge if you're charging based on value, and that is what do you offer? We've talked about this on the show before. Don't offer. Commoditized services. So if I can literally look at your business and say, all right, you offer this I can look at 30 other people in this city or this area that offer the exact same thing.

[00:24:47] Brian: And that's what you were doing when you were talking about a plumber or somebody to come in do your like, renovation in your house. Every single one of those services is a commoditized service, meaning you can shop that exact thing around with everybody and you're probably not gonna take the lowest bidder, but you [00:25:00] were gonna take the person who has the best pricing based on what you've seen from everyone.

[00:25:03] Brian: somebody that you trust, somebody that seems to be credible, someone who has maybe good reviews. And so it's not to say you can't make a business succeed, it's a commoditized services. Plenty of people do, but it caps what you can. So instead of offering commoditized services here, we're talking about the do what do you do instead? Do create a better, more appealing, more valuable offer. Again, this is nebulous and this is, I don't have an easy benchmark to give somebody for this, but this is worth discussing cuz this is what I work with all my coaching clients on to make sure that you are not just directly shopable to everyone in the world.

[00:25:34] Brian: Look at what you can offer people that will introduce something called pricing confusion. This is one of the coolest concepts when it comes to packaging and pricing. What can you do that will confuse somebody when they hear of what you're offering? in, In my coaching community, there's a guy, and I'm not gonna give names here, but he is a music producer and he has a really long background as a recording artist as well. as a music producer, there's plenty of other people that offer similar services, probably the same quality, similar pricing.

[00:25:58] Brian: The way he offered pricing confusion [00:26:00] is offers something that is out of the norm. What he does is he will help the client, the artist book a tour around the album recording. Because he has a long background in a, as a touring artist, he will help them book the tour, get the gigs that help pay for the album itself.

[00:26:17] Brian: And he's had artists fly over from Australia, fly over from the UK because he can help book the tour to make it profitable or at least break even for them. So he's literally helping them fund their own record. So that is something that is called pricing confusion. If I look at, this person and I say, you're gonna charge me 10 grand for my album, and this other person's gonna charge me 10 grand, or even eight grand, even less, or five grand or even less.

[00:26:39] Brian: But this person, my coaching client, is going to book the tour to pay for the entire thing take away the fact that it's like a break even expense now, because he's literally making, paying for for the project for me, take that away. It's something that is above and beyond what everyone else is offering.

[00:26:53] Brian: can't directly compare apples to apples. every single industry is gonna look different than this, and I wish I had more

[00:26:58] Mark: Well, a really [00:27:00] easy example is like, look at Amazon. , like 19 bucks? What, whatever it is. It's like you get music, you also get like films, you get free shipping, you get Alexa for cost. Like you get like all the hope. She doesn't hear me. But like, do you even compare that to anything else? Like,

[00:27:17] Brian: So like, okay, go read the book. A hundred million dollar offers if you are like, I don't know how to be more valued. That's, Alex Mosey guy we were talking about before. That's his book. Wonderful book. Highly recommended. will give one more example. Like, this is like a self-serving plug here, but like my own coaching program's called Clients By Design.

[00:27:32] Brian: It is a coaching program for creatives to build client acquisition machines. It offers. Full step by step playbooks to build each element of the client acquisition machine. It offers my personal feedback on all of the elements you build out. I give you personalized feedback, it offers coaching hot seats, community a whole bunch of bonuses like a FR funnel account.

[00:27:51] Brian: I pay for your ads, everything. It is such a good offer and so unique that you literally cannot shop that around. There's, there are other coaches out there who help with these [00:28:00] sorts of things. Not all of them are niche down like me, but this exact offer of coaching, especially at the price point that I'm at, is in no way shopable.

[00:28:07] Brian: It is not an apples to apples comparison. There is pricing confusion because there's so many things that come with it. It's so unique and didn't wanna be somebody who's like, join this one thing that you can compare 10 other websites to or 10 other programs to when I created this. I just wanted something that was unique.

[00:28:20] Brian: So when you comes to what you offer, do not offer commoditized services. Create something as unique as possible that is more valuable and is not directly shopable to your competitors. Anything else to add around this mark?

[00:28:32] Mark: that's literally the story of my life is just like . Make it as unique as possible and pick what you want your margins to be that you think they would be able to work with 10 years from now. Just keep it good for everybody.

[00:28:45] Brian: All right. So you've, you're pricing based on outcome. You're doing value based pricing. That's the first thing. You have created something unique, a non-com commoditized service that you're offering. Great. Now let's talk about the third thing on how do you close the deal. the area that people have the seem to have a lot of [00:29:00] struggle with is whereas like, they get a lot of pricing pushback always say, my clients can't afford me.

[00:29:04] Brian: And so here's the first don't, don't send proposals. These are for wimps. . I used to promote, something called Better proposals. I don't anymore.

[00:29:12] Mark: I remember that. I was like, dude, this is not working. Like

[00:29:14] Brian: I know, I know, I know. Don't send proposals. Proposals are for wimps. I'm sorry. It's for people who are too scared to talk about money on the phone.

[00:29:21] Brian: That is the first thing. And then the second thing is don't itemize your work, which is what a lot of proposals do. They send like an itemized proposal of like, here's all the things you're getting and here's each price for each of the things. Don't do either of those things. Instead, get on the phone, talk to them, find out what their struggles are, find out what they're trying to accomplish and figure out how your service or your offer bridges that gap between where they are now and where they want to be.

[00:29:42] Brian: And then you pitch them on your service talking about how your service is the solution to their problem that they have, or at least a part solution to the problem. Cause not all of us offer fully transformational services, which is what I recommend. And then close 'em on the phone given the. Ask them if they're in, they're not.

[00:29:56] Brian: And this doesn't mean you will always collect money on the phone, [00:30:00] but when you talk money on the phone, always you will figure out what the real objections are. And it's almost never money, at least for me, it's almost never really money. It's something else. It's that they don't believe in you. It's if there's someone else out there who's better than you, who they're, they would rather work with, it's that they have something that's holding them back, maybe a spouse.

[00:30:18] Brian: Or it could be that they have some limiting belief around investing this much into their business or into their lives or into their whatever it is that you're doing for 'em. Some of this like creative fulfillment things. But it's almost never price. until you actually have these hard discussions, which are awkward for most creatives, It's really hard to really understand how to overcome these objections.

[00:30:36] Brian: And these are what we call objection overcomes. And if you ever study sales, you wanna have actual responses that you've prepared for every single objection that you hit regularly. And if I actually showed you, I haven't even, we should go over this at some point. Just objection overcomes. I have, for my top three objections, I have three to four what I call a tax which sounds brutal, but like a tax that I will use to overcome that objection until we get to the bottom of what the true objection is.

[00:30:58] Brian: Cause sometimes the surface [00:31:00] objection is not the real objection. We have to keep going down these attacks until we either break the objection and, and overcome it or lose the cell. That's really the only two

[00:31:07] Brian: options.

[00:31:08] Mark: so I, I think regarding sales, like in an interesting scenario you'll probably get there at a certain point in your career where you know, be a lot more selective of how you want to go.

[00:31:18] Mark: listen to a episode that I did with Brian, I don't know, a couple episodes ago the, the sales one where I ask all the questions or whatever.

[00:31:25] Brian: Yeah, it's episode 200, so it was like 29 episodes of Come Mark. You went a couple and go

[00:31:30] Brian: seven key topics to cover with every client before the sale.

[00:31:33] Mark: my honest opinion, and I, think Brian, you will push back on this and say I'm an idiot. least for what I do and how I like to structure my life and business is by the time I'm on the phone with somebody, by the time I'm talking to somebody or whatever should already be sold on it.

[00:31:54] Mark: And if they're not, that means that I'm not doing a great job communicating with my market. They should know already. [00:32:00] So the, the reason why I ask those questions is because need to know from an ethical perspective on my part, service and what I do will absolutely solve their problem.

[00:32:13] Mark: There's no doubt about it. So I go through all these things, you need, is this a need right now or is it later on? Well, if it's not right now, I'm not gonna push them to do it right now. That, speed up somebody's life. Like I'll just hit 'em up in a couple months and you know what, some of them won't, and that's okay.

[00:32:29] Mark: Like, I'm not gonna push somebody. But like, you them like all these things and if everything get good and they agree to everything, that gives me the permission to say, okay, we're working together and here's the payment link. Ba bing, ba boom.

[00:32:42] Mark: But there's an objection on any of those, I stop it right there and be like, okay, well I don't think we're a match on this and that's

[00:32:49] Brian: Oh that's a good point. Like I don't just close every single person that I talk to

[00:32:53] Brian: ever

[00:32:53] Brian: On this last enrollment period I did for the coaching program specifically, just to give one example, cuz this is fresh top of mind.

[00:32:58] Brian: I just did this just a couple [00:33:00] episodes ago. You probably were listening to me talk about this. I had a ton of people apply for this coaching program. I only accepted

[00:33:06] Brian: 36% of the applicants. And so that means I accepted them and I offered the coaching program two 36% of the applicants. So that means I rejected 64% of people that even applied for that coaching program were not a good fit. I just didn't think it would be a good fit their business, for where they're at their life.

[00:33:20] Brian: Or I didn't think their quality was good enough to, be able to start the actual client acquisition process. Cause you have to be good at what you do first before you start worrying about a acquiring clients. But yeah, I I don't make the offer to everyone that I talk to or everyone that applies to this, or as a freelancer, you definitely don't with everyone who, who hits you up.

[00:33:35] Brian: But But for the ones who are a good fit there's actually a mental shift kind of had to make, which is, if you are genuinely the best option for this person to accomplish what they need, it is your obligation to close them. and this depends on the. I talked about this on a previous episode, but a easy example to, to conceptualize is if you can help someone who's 400 pounds drop 200 pounds, that is a massive transformation that you're helping them accomplish.

[00:33:55] Brian: If you are the best option for them, generally the best option for them to lose that weight and [00:34:00] save their life and changed their family tree and be there when their, kids grow up and their grandkids and whatever. If you can genuinely help with that and you don't close them, you've essentially just robbed that person of a chance to transform their life.

[00:34:10] Brian: And again, not all of us have that same level of transformation we offer to our clients, but if we approach it with that same sort of a vigor and mindset, then it becomes much easier to close people because you have conviction behind what you do. And this is another thing I got from Alex, from Ozi, is the thing you could do to, to short circuit sales, meaning you're not the best salesperson. you still wanna close sales as you become the most convicted person. It's believe in yourself and your service and your offer more than anyone else if you believe in it. It It comes across in when you close people. But the people who are that lack confidence, they don't really think they're very good at what they do.

[00:34:44] Brian: They don't believe in what they do, they don't believe in their offer they're the best option. They will self sabotage and they will not close clients. And if that sounds like you, there is probably room for you to improve what you're doing right now. It's either your skills, it's the offer you're doing, it's a commoditized service.

[00:34:58] Brian: You're not really differentiated in any [00:35:00] way. You're not the best, the genuinely best option for somebody. But when somebody applies for my coaching program and they say right now I am a hundred percent reliant on word of mouth clients and it is not paying the bills, that I know that I am genuinely their best hope for fixing that. otherwise their other option is they will come back to me a year from now and they'll be in the exact same place. They will have struggled for the last year barely breaking even, and they've done nothing to change that. And so if I don't close them and we actually start taking steps for them to take it into their hands, then I've failed them essentially.

[00:35:34] Brian: I'm not this like saint out there saving everyone's life of business. I am accepting money for the service that I'm offering, but I do have a strong conviction behind the people that I'm helping in my coaching program. So that's how I sell.

[00:35:43] Brian: I come from that approach of I will only offer it if I think I'm the best option for you. And that's how I close people. So let's move on to the last thing here in this outline, mark. And that is fulfillment. The first is the don't rush it. Don't rush the fulfillment. Surprise and delight.

[00:35:57] Brian: whenever you're charging low rates you're, you're rushed all the [00:36:00] time and you have to systemize things. Going back to like the mastering engineer example I, if we have any mastering engineers, listen to show, I am so sorry, but like you have to rush through projects.

[00:36:07] Brian: You have to poop them out. And the few mastering engineers that I work with in the coaching program, I just have a few. We work on not being what we call a fast food mastering engineer. We work on like high touch, high caliber, being differentiated in that way where you're not just pooping out songs like Lander but do surprise and delight.

[00:36:23] Brian: And the only way you can surprise and delight your clients and go above and beyond what you told 'em you were gonna do is by charging a premium where you have enough margin in place, meaning room in place time, money, mental bandwidth. Your schedule allows it to surprise and delight. The only way we can do that is by charging more.

[00:36:39] Brian: This goes back me, me and Mark. we were talking about. Earlier in the episode, but surprising to delighting your customers, going above and beyond, making them happy, ecstatic. This is the key to getting referrals. So actually increasing that word of mouth snowball and your client coming back to you again and again.

[00:36:53] Brian: Remember that 70% retention rate. So you want 70% of your clients to come back to you the next year and you want all your clients to refer [00:37:00] you to other clients so that you can exponentially grow as a freelancer until you hit your

[00:37:03] Brian: fulfillment gap, you have to surprise and delight.

[00:37:05] Brian: This is just part of it. So there's a lot of things you can do in this, and to be honest, I can be a lot better at this than I am, but handwritten notes, thank you. Gifts, gift baskets, holiday cards, small tokens of appreciation that can go a long way and, and that's just like after the project's done.

[00:37:20] Brian: There's things you can do in the project that are surprising to light. Things that think about it like this, and this is something that we probably haven't talked about enough on this podcast recently, but those things you go above and beyond doing that you're not getting paid for. Think about this as a marketing expense. For every hour you spend with your client above and beyond what they paid for, for everything you do, that's like, wow, I can't believe he did that for me. I can't believe she did that for me. That's really sweet. That's really thoughtful. That is time, effort, and energy, and maybe money spent marketing your business because that's the sort of stuff

[00:37:48] Brian: that makes people come back to you again and again and again refer, you to other people, refer you to other friends.

[00:37:53] Brian: And I'm saying this now when I'm like not doing half the stuff I should be doing, and I'm thinking about how many referrals I'm missing out on by [00:38:00] not doing all that I could do in this arena here.

[00:38:02] Mark: everybody is going to remember like all the extra things you did for them, but everybody's gonna remember if you didn't fulfill what you said you were going

[00:38:10] Brian: True,

[00:38:10] Mark: So end of the day, if you don't charge enough, you're putting yourself in a, in a where it's probably gonna be hard to do everything that you said you're going to do.

[00:38:22] Mark: If you charge more, then you're definitely gonna be able to make it happen. Let's say you get sick or you're tired or whatever, you're gonna have the cushion to hire somebody or to get help to make sure that they have a great experience. Margin in your pricing structure is actually, you could look at it as insurance as well.

[00:38:40] Brian: Yeah. So let's, do a couple downsides or caveats here. Cause this is higher rates is not for everybody. There are some downsides to this worth mentioning and, would be a responsible list for not to mention these. But if you raise your rates and you're charging at the top of your market a premium rate, you have to be good at what you do.

[00:38:54] Brian: I I kind of alluded this earlier when I was talking about coaching clients Being good at what you do is table stakes. If you're listening to the [00:39:00] show and you're not good at what you do as a creative, figure out your skill set. Get that down first like, and then come back to the show, and then we can worry about building your business so you have to be good at what you do.

[00:39:08] Brian: And the more you charge, the better you have to be. there's typically a reason that the best people that you know and love in your industry, the people that are the top of the top that charge a ton in your industry. The people charging 50, a hundred thousand dollars for a logo, whatever uh, Chris dos of the world.

[00:39:22] Brian: reason those people are charging so much is because they're genuinely excellent at what they do. if you wanna get to that upper echelon, your skills have to match. But I wanna put the caveat there as well, just kind of a counterpoint that most creative. Don't struggle with overcharging for what they, for their skill set.

[00:39:38] Brian: Most creatives are on the exact opposite spectrum. They're undercharging considering how good they are. And I see tons of people, whether it's on dribble for designers, whether it's on a videographer out there who's like excellent, what they do, and they're drastically undercharging for what they should be doing given their skill set.

[00:39:52] Brian: So, Downside number one is you have to be good at what you do. Otherwise you're taking more value than you're giving, which means you do not have a viable business. [00:40:00] Second downside is you are almost always gonna have fewer clients when you. this is where we could talk about like the client acquisition balance, where the more you charge the fewer clients you're gonna get, it usually evens out.

[00:40:10] Brian: But that means we also have to maybe get more leads for you as well. there's an equilibrium point somewhere and that means that like maybe people are turning it down because you're charging more. And that can happen, especially in certain industries that are price sensitive. But that just means you have to make it up for it in lead flow.

[00:40:24] Brian: And Mark, you and I are both really good at this. We are both excellent at customer acquisition, client acquisition, depending on what, what business we're marketing. But if you aren't willing and able to learn the skillset of customer acquisition or client acquisition, depending on what you call your people this is gonna be an uphill battle for you trying to charge higher rates.

[00:40:41] Brian: You're gonna run outta people to sales to really fast, especially if you're just focused on your immediate network and your referral network.

[00:40:46] Mark: another downside of having high rates is because of something's high rates. Typically it's high touch, which means you're going to be doing a lot of work with them, and that's a separate problem. But the big problem with that is if you [00:41:00] lose a client that you're spending a lot of time with, that could be a very dangerous thing for your income as well.

[00:41:06] Mark: So you wanna make sure that you can diversify, cuz the worst client you can have is the one you can't afford to

[00:41:11] Brian: that's true. yeah. When you go to those like super high caliber clients, like we've had a couple people on the show that talk about like 50,000, a hundred thousand dollars gigs

[00:41:18] Brian: that would hurt to lose one of those clients. Like you

[00:41:20] Brian: close one of those clients recently that'll put your year off.

[00:41:22] Brian: If that doesn't close,

[00:41:23] Mark: gonna be really, really high touch and you're gonna put in a lot of work, you need to insurance to ensure that they're going to be there. So like there's a company that, uh, be working with. And of you guys who don't know, I'm in, like the music licensing space, that's where I'm spending a lot of my time now.

[00:41:38] Mark: Um,

[00:41:38] Brian: Into the microphone, not at the camera.

[00:41:40] Mark: anyways, but so there's a company that we're working with and they, uh, music for a lot of fitness apps. That's probably as simple as I can get it. trying to see like, you know, cost per license and. how much flexibility can we have? And I'm like, cool, you can have more flexibility, but it's gonna charge more because we have to put in the work for all of those.

[00:41:58] Mark: And then I was thinking [00:42:00] about it and I was like, I don't even wanna offer that. Like, be doing this on a minimum for a year, or we, it's just not gonna be worth it for us. And that's it. to be worth it for you in the end because if somebody just drops off immediately, that can really mess you up.

[00:42:12] Mark: So later in your career you can start having like more agreements where like if somebody's working with you regularly and you're putting in a lot of work, which is taking away from you garnering new leads, right? So there's only so much of you then you can have some clauses in, place where, hey, if you stop working with me, you need to gimme 90 day notice or something like that.

[00:42:30] Brian: This sort of problem actually fits good into our last bullet point and the downsides. And that is bigger projects equals bigger problems. Cause a lot of what you said probably just went over most of our listeners' heads cuz A, they don't understand your industry and

[00:42:42] Mark: Sorry.

[00:42:42] Brian: they don't work with like enterprise clients.

[00:42:44] Brian: But like these bigger deals come with more complexity. There are bigger problems, bigger headaches. You lose a client, that's a huge headache. You have a client a pain in the butt at this level. It's a huge headache.

[00:42:54] Mark: worked with this PR agent years ago, and it was very expensive. It was like three or five [00:43:00] grand or something for this artist that I was producing. It was pushing out her single, she did a terrible job. It was awful to the point where I, made me look bad to my client.

[00:43:11] Mark: And guess what? I went out of my way to tell everybody not to hire this person. And I know a lot of mutuals with her,

[00:43:19] Brian: actually fits with the first downside, which is you have to be good at what you do. one really unhappy client like you were, can undo the work of 10 or a hundred happy clients that's why you see, like in a lot of industries, like airlines are a good example.

[00:43:31] Brian: They'll transfer a hundred thousand people problem free, but then those like 10 that had a bad experience cuz of flight cancellation or delay will leave the one star reviews on like all the, the ratings platforms. Because those people will go out of their way to find some place to bash you.

[00:43:47] Brian: Whereas the clients that were like, eh, it was good, or eh, it was great, or even this was excellent, they're drowned out in the sea of those few people who just despise you. So I think we gotta wrap this up.

[00:43:58] Brian: Both of our energy levels are [00:44:00] basically gone now. I'm jack lagged. It's like five in the morning, six in the

[00:44:03] Mark: I had, I had to get up at like four 30 or five to take my wife to the airport, so I'm, I'm right

[00:44:10] Brian: So as we wrap this up just wanted to ask one thing of our audience, like The six figure creative has gone through a lot of transition in the last year. If you've been following this for a long time, you kind of know the transition we've gone through. And I want to feel more connected to the audience that we have right now.

[00:44:24] Brian: And I wanna make sure that I'm serving the, the people that are listening right now, the best that I can. So I'm gonna be doing, especially for 20 23, 1 of my big initiatives for this year is to make this podcast the best that it possibly can be. And I cannot do that without hearing from the people who listen to this show.

[00:44:40] Brian: wanna hear from you, whether you are a brand new listener, you just found this show, and you're just like, oh, I think I like it. I don't know. I wanna know from your perspective of someone who just are listening to this show, what can we do to make this show better? But I definitely wanna hear from my longtime listeners pre episode one 50.

[00:44:54] Brian: This show has changed a ton. So what can we do to make this show better? Just go to six figure [00:45:00] creative.com/better. That's the url. It's say like a short survey. It's completely anonymous. You don't have to give us name, email address, anything. Just give us your like, unfiltered opinion on what we can do to make this show better.

[00:45:12] Brian: will take it into, account for when we're finding guests, when I'm formatting shows, when I'm looking at substitute cohost like, mark, whether or not he should come back, let me know. again, I just wanna make this the best podcast for creative, like for business creatives. just want to do the best I can for this show, and I, I I just need input.

[00:45:26] Brian: So please, if you care about the show in any way, shape or form, go to six figure creative.com/better and gimme your thoughts.

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