The Goldilocks Pricing Rule for Freelancers (Not Too High, Not Too Low)

386. Goldilocks Pricing

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Brian: [00:00:00] Every single freelancer has a Goldilocks zone for their pricing, and in this episode, I'm gonna show you how to find your own personal Goldilocks rates where you're not charging too much, you're not charging too little, it's just right.

Brian: And the goal is for you to stay booked, to stay profitable and stay sane. That's the Goldilock zone. This is something I have obsessed over starting probably in 2014 or 2015, so over a decade now of obsessing over this sort of goldilock zone.

Brian: And after earning over 5 million in revenue, I've tested lots of different approaches to pricing. I have overcharged and felt the thinning out of my own calendar and bank account because I was charging too much. I have undercharged and felt the soul sucking pain of slogging through a project that I knew that I was being underpaid for and I hated my clients for, and I found the sweet spot.

Brian: In many different businesses, including my own freelance business, and I've turned this into a pretty simple process for my own trial and error that you can just follow benefit from.

Brian: So if you make it to the end of this episode, you'll understand my four step process for finding your own goldilock rates. I'm gonna give you the three metrics that you need to track.

Brian: If you wanna be sure you're in the perfect sweet spot. if you're new here. [00:01:00] Hello, I'm Brian Hood. This is the Six Figure Creative Podcast. It's a podcast that I've been doing since 20 17, 20 18, and the whole goal of this is to help you earn more money without selling your soul. Part of that is making sure you have perfect rates that are balanced, not too high, not too low, AKA, the Goldilocks zone for your rates.

Brian: and if that sounds interesting to you, you're in the right spot and I encourage you go back through a backlog. We have 385 other episodes that are business related topics to help you make more money as a freelancer.

Brian: Only one of those. Only one of those is about potentially selling your soul. Go find that episode. an interesting one. It's the case for selling your soul to make more money. There is a case for it actually, but only one out of 386 episodes covers that thing.

Brian: let's talk about the goldlock zone. I wanna start just talking over, the two extremes. There's the two high and the two low. the too high is what I call are considered like the luxury mirage, it's like a, mirage. It seems like you're luxury because you're high rates.

Brian: But this generally happens when you hear people like me or other experts, gurus, if you wanna say, I'm definitely not a guru, but I pretend to be one. They say this, raise your rates. They say it over and over again, and I've [00:02:00] probably been guilty of just saying, raise your damn rates. I've told clients specifically, raise your damn rates.

Brian: And in certain cases, that's great advice, but in a lot of cases you raise your rates simply because you hear this over and over again despite the signs that you shouldn't raise your rates. And some signs you shouldn't raise your rates could be that you have an empty calendar.

Brian: It could be that you have built up no real reputation that supports a more luxury rate type pricing, and you're not offering enough value for what you're charging. And this is the thing that I've said over and over again, but value does not equal price, value and pricing are two completely different things.

Brian: They in no way, shape, or form affect each other. The value of what you provide is given whether or not you charge any money whatsoever, you could charge $0 and the client will almost always get the same or more value out of the thing that you're providing. Now, there are some circumstances where not charging means they won't take it seriously, they won't get as much value out of it, et cetera, et cetera.

Brian: But generally speaking, all other things being equal, the price has nothing to do with the value that they receive from your services, especially in freelance services. if you get into like the education world, like coaching courses, even [00:03:00] software, if you don't pay for it, if you don't feel the pain of investing into something, you likely won't spend the time, effort, energy necessary to utilize that service or that product. So if you get a free software, you're probably not gonna take the time to set it up and learn it and,put it into your actual workflows.

Brian: If you get free coaching or free course, you're not gonna go through it or actually utilize it 'cause you don't value it. So you will get no value from it, but I'm gonna table that for the discussion for the side. Most freelancers you're offering done-for-you services, so you can provide those done-for-you services, whether you're getting paid for it or not.

Brian: so value is what they get. Price is what you charge. and if that argument is true, then we could say that your price could be very high luxury pricing, but the value that you provide could be way down here and basic beginner level,

Brian: chances are it's probably somewhere more like you've worked your skillset up over the years. You've had some signs of success. You've had a couple FET seasons followed by a lot of famine seasons. You've heard the like raise your rates thing. Maybe you raise 'em for a while and it seemed okay, but then everything fell off.

Brian: You stopped getting clients. Your schedule thinned out. It's generally going to be because your value [00:04:00] is somewhere in the middle. It's that kinda like middle band area, pretty average, but your rates are above average. anytime your rates are higher than the value you provide, you're gonna have a tough time.

Brian: It's not a sustainable business. And the consequences of that imbalance is you're gonna lose out on great fit clients because of sticker shock. They're going to see the value you provide. They're gonna see the quality that you provide compared to the price that you are charging compared to other people with that same quality level and that same price point.

Brian: And they're gonna have sticker shock. They're gonna say, oh my God, I'm not paying that much for this service. I can get that same or better service for 50% less. this is especially bad in situations where you have what I consider like portfolio building clients or anchor clients. Those clients, they are the anchor to your portfolio.

Brian: Those clients that are like the premier clients, the premier projects that you could utilize to get a lot of other people, whether they're gonna refer a ton of people to you or they're just no names in your industry, that will lead to other referrals because you're associated with them, but you lose out on those because your rates were too high.

Brian: That's double bad. You miss out on not just the money you earn from that project, but all future [00:05:00] revenue that could have been brought back to the attribution from that project, the credibility from that project, the referrals from that project, I.Now losing out on bad fit clients because your rates not a bad thing. That's not what I'm talking about here. But when your rates are too high, especially compared to the value you provide, you're gonna miss out on clients that would be a great fit for you, and that's not what we want.

Brian: You'll also lose out on referrals or repeat clients, so your old clients will work with you. They'll learn about your new rates, and either they won't come back to you because they're just not going to pay those higher rates because. Part of it's, they're just used to the old rates, and that's just part of the game.

Brian: Sometimes you've gotta outprice your old clients if,they're no longer a good fit, but they're also not gonna refer people to you. So you're losing out on both sides of things. Like a client is a very valuable resource to you. They're gonna come back to you again and again and again if you have that type of service that they could be delivered multiple times.

Brian: If you're a wedding photographer, you're probably not getting that, but you are getting referrals either way. If you're good at what you do, you have good pricing, you're gonna get referrals, you're gonna miss out on both of those things.If your rates are too high, again, I consider the luxury mirage pricing.

Brian: It's this,mirage, this fake looking luxury. When it's reality, you're just a basic [00:06:00] service.

Brian: That's the, uh, the two high scenario, the two low scenario is what I call the martyr zone. This is even more common in freelancing. I rarely see the luxury mirage, but I see the martyr zone all the time. This happens because you wanna stay affordable to everyone. You got a soft heart, and that's a good part because you generally,your clients love you.

Brian: They're loyal to you, they refer people to you. You stay busy. But you're scared of raising your rates because you don't want to let people down. You don't wanna feel judged, you don't wanna feel like you're too greedy.

Brian: and generally, what tends to lead to this is this unhealthy relationship with you and money. You are raised likely to think that money is evil. You're raised likely to think that being greedy is evil, or that charging the value they provide is evil and the consequences are horrible.

Brian: You'll get burnt out. You will resent your clients. be attractive to bad fit clients who don't respect you, they don't respect your expertise, or they just don't simply know how to be a good client. Because generally, if you have really low rates, you're gonna be attractive to a wide variety of people.

Brian: And that wide variety of people will include some great fit clients, some okay fit clients, the bill paying work, and some horrible fit clients that you [00:07:00] just never wanna work with. And by charging where you should be in the Goldilocks zone, you'll wipe out almost all of those bad fit clients, those low bottom feeder clients that you don't wanna associate yourself with anyways.

Brian: But that's not all It keeps going. This is even worse than charging too much because at least when you're the luxury mirage, if you're getting any projects at all, generally are making a lot per project. You have high profit, you are not burnt out. You are actually eager for more work in this world.

Brian: Not only are you burnt out, you resenting your clients, you're attracting bad fit clients, you also have very little profit. Between all your taxes you're paying and the expenses you're paying and everything to deliver your service. You have very little leftover at the end of the day and you have a capped income you don't have more time to work, so you can't possibly earn more.

Brian: You've basically just capped yourself on how much you can earn. There's only so many hours in the day and you're earning per hour is probably very low, and in some cases you might be below minimum wage in some extreme cases, and so you're better off working McDonald's. Then doing this when it comes to earnings per hour.

Brian: Now you wouldn't enjoy it as much, I know that, but a burnt show me a burnt out freelancer who is resenting their [00:08:00] clients because they're undercharging, because they're a martyr.

Brian: And I'll show you somebody who would be better off somewhere else.

Brian: this lee, a spot where you have no nest egg. You don't have any money left for rainy days or famine zones, and so it's really easy for you to be wiped out. Look at it like any sort of human with a horrible immune system. Your bank account is a freelancer, is your immune system. If you have a bad immune system, any little someone costing your general direction from 30 feet away, you're gonna get sick.

Brian: And when you're sick, you're miserable as a human being. Well, in freelancing, if you have a big ass bank account, you can weather the storm, somebody could sneeze in your mouth and you're gonna be fine. That's how strong your immune system is. What a disgusting thought, but you just can't weather the storm.

Brian: Like somebody with a good nest egg, A good rainy day fund can, and when you're in the martyr zone as a freelancer, when you're too low in your pricing, this is where you live. The perpetual, I'm sick all the time. I am on the verge of shutting down as a freelancer because I cannot weather the storm. I can't make it through this famine season, and I can't lower my rates anymore to fill up my calendar.

Brian: let's talk about now the GoTo lock zone, and then we'll talk about actually how to find your own Godlock zone. GoTo lock zone is that [00:09:00] sweet spot. It's where the price is high enough so you can deliver it an excellent value, excellent work, and still breathe. It's low enough so that clients feel like they're getting a good deal.

Brian: They feel like, oh, compared to what I'm getting, this is a fair price. They may not say, this is a steal God, we don't want that. Anyways, there's room for improvement there. But pricing is an elastic band. There is a perfect sweet spot in the middle where you're not stretching either way. There's pricing that's a little bit high where it's stretching on the high end, but they're still willing to pay it.

Brian: And then there's a snap zone where the pricing just snaps and you're charging too much. There's also in the low zone where it stretches you. The lower you go, you can lower your race a little bit and still be okay. You're not burnt out. You're gonna resent your clients, but you're the one eating it here and it keeps stretching lower and lower and then eventually snaps.

Brian: And you break as a freelancer, you have a,mental health breakdown and you have to take time away. You get sick and have to take time away. Either way, you body will force you to recover from that burnout and the sweet spot keeps you right in the middle. You're not stretching either way. If anything, you should be stretching a little bit on the higher price side in that elastic band.

Brian: And this sweet spot is different for [00:10:00] everybody. It depends on your industry, depends on your niche, depends on your own speed. The systems you have, the demand you have, the skillset you have.

Brian: But no matter where you land in this. If your goldlock zone should let you take breaks without guilt, go on vacations, take some time off. Enjoy the weekends. Work normal work hours, nine to five, eight hours a day, maybe nine. If you're a workaholic, it should let you deliver great work without burning out, without resenting your clients.

Brian: Without resenting yourself.

Brian: It should keep you busy without, again, burning you out. Keep your calendar full, but again, not too full. And then it should allow you to reinvest in your growth. You always have money for rainy days, money for opportunities. You can go to that conference without stretching your budget out.

Brian: hire that coach without going broke. Buy that course.

Brian: The Goldilock zone gives you a buffer in both time and money.

Brian: so if the Goldilock zone is different for everybody, how do we find it for ourselves? I've got four steps for you.

Brian: The first step is something you're probably not doing, you probably don't wanna do, but you need to do it. And that is track your shit. Track your shit. There's an old saying. What [00:11:00] gets measured gets managed, meaning if you're not measuring something, there's no way you can affect that number. Just like if you want to lose weight, you need to weigh yourself every day.

Brian: So you have those micro adjustments. Oh, I'm gaining weight, I should. Back off, or I'm losing weight, I'm on the right track. But if you weigh yourself once a month or once a year, that's not a very good way to track how you're doing. There's no way to manage that if you're tracking once a year on your weight.

Brian: And so with that sort of thought process behind it.

Brian: There are some metrics related to pricing that you need to track religiously, and this is not on a weekly basis, this is not on a monthly basis. This is on a, as it happens basis, as things happen, you track them, you track 'em in a place that you can refer back to and find, but the first thing you're gonna track is your close rate.

Brian: and how you track this is up to you. But the way I look at it is how many opportunities do I close and what I consider an opportunity is someone I've offered my services to. So someone might come to me with like a rates request or something, and I have no interest in working with them.

Brian: And so even if I'm offering a bullshit ly high rate, 'cause I don't wanna work with that person, or I refer 'em out to someone else because I don't wanna work with them. I don't [00:12:00] consider that a real offer. But if someone that comes to me and they wanna know my pricing and we have a, especially a conversation around it, or even if I just send them like I used to do, send them an email with like a quote in it, which is the worst sales process possible.

Brian: That's an offer.

Brian: So for however many people you offer your services to, you should be tracking that somewhere, A-C-R-M-A spreadsheet. You can have a sales call log. I recommend every freelancer do sales calls. they don't have to be overly formal, you're essentially just trying to figure out where are they now? What are they trying to accomplish?

Brian: Diagnose. That's the diagnosis. Where are they now? What are they trying to accomplish? What's holding them back? Or what do they need? Essentially diagnosing their needs and then prescribing a solution. Not a bunch of solutions, not, here's 16 options, not, here's three packages. It's, here's the solution to the problem that you have or the goal that you have.

Brian: So for every call that I have, I'm gonna put the name of the person, probably the email address of the person. I'm probably gonna put some notes about the person and the outcome of the call. Did I close them? Is it still pending or did I lose it?

Brian: You can do that. If you just do proposals, you can do that. If you just do emails, you can do that. If you do phone calls, you can do that. If you do sales in person, doesn't [00:13:00] matter. Just pick a method and stick with it, and every single time you have an opportunity, add it to the list and track the outcome.

Brian: If you have a CRM, it'll track all this stuff for you,

Brian: and here's why. By looking at your close rate, that is an indication of which way you might be going. If your close rate's over 60%, Likely there's room to increase your rates.

Brian: If you're under 30%, there's likely room to decrease your rates. not always, but sometimes there's room to decrease your rates. And when I say sometimes it's because there also could be bad sales issues. You might be bad at sales, you might be talking too much.

Brian: You might be talking too little. You might be letting them run the call, or you might be running over them on the call. You might be offering too many solutions or you may not be uncovering the real things that they need.

Brian: But if you know your close rate, that is one good indicator to know which direction we go.

Brian: If you're between 30 and 60%, that's a good sign. You're likely in the right spot. That's the first metric.

Brian: That's the sales metrics. There's some other metrics we need to track related to projects,

Brian: and I want you to track this. After every project has been completed, you've been paid for everything. You've delivered all the files. You essentially are going to have all of your post project breakdown covering this.

Brian: And you can have this in [00:14:00] a, it could be in your CRM as well if you have one. It could also be just in an Evernote or a notion document. It could be on a spreadsheet, but what did you charge for this project? How many total hours did you work on the actual delivery of the project? So actually working on client work, how many total hours did you work on the project related to admin stuff that's outside of that.

Brian: So meetings, sales conversations, prepping things, sending proposals, doing revisions, if you count that as a separate thing.

Brian: Bookkeeping, et cetera. this is always a difficult one to track because there might be things you have to do anyways, and you're like, I did like 30 minutes on this, but it was for like every project I did this month. Well, you can just say, well, I had four hours in this admin task and I had four projects.

Brian: I'll just throw an hour on every one of my projects and call it a day. We just need to be reasonably close here. How many total hours did you work on delivery? How many total hours did you work on admin? And then did you actually enjoy the project or not? You can make this a scale, a one to three scale.

Brian: I hated it. It was okay, or I loved it. You can make it a one to five scale for a little nuance. I would never go above one out of five scale. You could also just do a gut check. And the gut check test is this, if I had to work with 10 more clients [00:15:00] like this and 10 more projects like this, what I love or hate my business, what I love or hate my life.

Brian: And the reason we ask this is because. You're building a business because you want to actually enjoy working in it, and there's gonna always be things you don't like about running any business in the world or having any job in the world or doing anything that makes money in the world. There's almost always gonna be elements of it that you don't like.

Brian: But that doesn't mean we have to just crush our souls and grind our souls away every day, working on shit that we absolutely despise with projects or clients that we absolutely despise. So if you start getting a lot of these, we need to inspect on where are we getting these clients? Are we getting referrals from clients we hate for other clients?

Brian: We hate for other projects we hate? We need to just do a whole reset. We need to go find some leads or some clients that are outside of this horrible circle. but this is just basic lead maintenance.

Brian: The true thing we're trying to really track here is what is our actual earnings per hour.

Brian: And if you look over a month period, for example, you'll know from all the hours I work this month divided by all my project income for this month, this is my true hourly earnings. And you will likely be surprised. Sometimes you'll be pleasantly surprised, but more often than not, you'll be unpleasantly surprised by how little you earn per hour.

Brian: and knowing is always better than not [00:16:00] knowing

Brian: because again, what gets measured gets managed. If we're afraid to know that we only make $12 an hour when we think we make 30 or 40, because we, we have so much admin work or so much extra stuff, or we were just feeling out our hours, but when we actually track them, we'd do like twice the amount of work that we actually thought we did.

Brian: I would much rather know that I'm actually earning 12 bucks an hour. That sucks. And I need to affect that. I need to change that in some way, shape, or form. And that's where we get to our second step here. Once you get the first step down, again, that is just tracking all your shit, knowing your numbers, what's my close rate?

Brian: What's my actual earnings per hour? Those two things are really important for this. is getting to our second place, and that is we have to kill all of your inefficiencies. And this is important to do before you worry about Goldilocks pricing, because slow freelancers force higher rates compared to efficient freelancers.

Brian: If you're inefficient, you're slow, you're a perfectionist, you overthink, you overwork, you overdo, you redo, you re redo.

Brian: You'll have to charge more than a competitor who is fast, who's efficient, who has their systems together, who has their processes together, who maybe even delegate some of the work. The people who get it right the first time, that don't second guess themselves, that don't overthink, that don't overwork, don't [00:17:00] overdo, they don't re redo.Those people can naturally charge less and still make more than you.

Brian: This was one of my biggest unfair advantages growing up in the music production world because I was so efficient in what I did and I had such low overhead that I could charge less than a lot of other studios in my area, especially my area, especially 'cause I was in Nashville, or I still am in Nashville,

Brian: I could charge way, way less than anybody in my competition. But still make more per hour, still make a higher hourly rate, There are studios in Nashville that have such high overhead and take so long to do some of the same work that I do, that they have to charge two to three times my rates in order to just make a small amount of profit.

Brian: 20, 30% profit if that.

Brian: Because they have millions of dollars of gear. They have either investors, they have to pay out or they have loans they have to pay out.

Brian: They have so many hours invested in doing certain things because their workflows require it because they weren't in the box. They have so much hardware, so much,routing, so many different things they have to do that I don't have to worry about.

Brian: And so when I reduce all my work to where the only thing I'm doing is the highest leveraged [00:18:00] part of my job, it's the part where I have to be creative, where my skillset shines, where my sound as a music producer shows when I just work on that. That's where I'm able to earn the most money, and so I did something called the Easy Eights.

Brian: We had a whole podcast episode about this.

Brian: It's episode 216. It's a while back. back in September, 2022. It was three years ago, over three years ago. Episode two 16 is called How to Spend Less Time Doing the Stuff You Hate. The Easy Eights Framework. You can get to it by going to six figure creative.com/ 2 1 6.

Brian: Long story short, it's just saying, here's all the stuff that I have to do. I'll just put it in a bullet pointed list, all the things I have to do to deliver on a project, and then I just think through Every single bullet point on that list, I first think, is there anything I can eliminate? That's the first of the easy eights. Can I eliminate it? Is it just work that shouldn't be done? If I can't eliminate it, can I automate it? Is there a way to just make it automatic through various tools,

Brian: If I can't automate it, can I delegate it to another human being? Is there someone else I can,delegate it to? Because if I'm earning just say 50 bucks an hour and I can get someone for 15 or [00:19:00] 20 even to do something for me, that means that I get that time back to invest in more $50 an hour activities or hire.if I can't automate it, I can't delegate it. I can't eliminate it. The fourth thing is called mitigating it. Can I mitigate it? Meaning, can I make it suck less in some way, shape or form? Can I templatize it? Can I systemize it for myself?

Brian: Can I create my own frameworks around decision making to make it easier or just suck it up and do it? Or maybe this is the thing I actually enjoy doing, which is honestly what I got myself to. Because of that, I was able to get my income up from 50, 60 an hour to over 300 an hour by just cutting out through the easy age framework, cutting out all of the unnecessary work.

Brian: Now, I had to work up to that for the longest time. I did everything myself, and eventually Ieliminated the unnecessary parts, the things that wasted time in the process. I automated certain parts, I made things more efficient through systems, processes. And then eventually I, hired somebodyto start doing a lot of prep work for me, the uncreative work, the non-creative soul sucking work.

Brian: Why am I talking about this? When it comes to Goldilocks pricing? It's because this [00:20:00] matters a lot. There are certain circumstances where the Goldilocks zone for your pricing. Below what you should reasonably charge, meaning your earnings per hour is going to be too low. and it's because you're taking so long to deliver and fulfill on what you're doing overthinking, no systems, no processes, no help, overworking, maybe a lack of experience,

Brian: maybe a lack of being decisive.

Brian: You're taking two to three times longer to fulfill on the same exact deliverable that someone else could deliver the exact same or better quality for at a third the time. And if they can deliver the same quality for a third the time, they can charge half what you charge and still make more than you per hour.

Brian: That's why you've gotta kill your inefficiencies here. And until you kill those inefficiencies, you may not even be able to reasonably achieve your Goldilocks zone.

Brian: that's the second step. First was track all your shit. Second is kill all your inefficiencies. The third step in this is implement dynamic pricing.

Brian: Dynamic pricing. If you've never heard me talk about this, I have a whole episode I'll,refer you to in a second, but dynamic pricing. Is, [00:21:00] think of it like surge pricing with Uber, Lyft, when you're in high demand, you're gonna pay more. Think about it like Airbnb. If you come to Nashville during Country Music Fest week, you're gonna pay like Twice. The rates are higher for the same, exact unit. Versus if you come in January where there's no bachelor bachelorette parties in the middle of the week where nobody's staying, you can get like the lowest rates possible. That's dynamic pricing It's just based on supply and demand, real need or lack of need for a service or product.

Brian: If you go back to episode 230,

Brian: you'll find the episode called Dynamic Pricing. The Secret Weapon, clever Freelancers are using to maximize their income. Released that, December, 2022. Damn, I was on fire 2022. I had some good episodes.

Brian: Long story short, episode, when you're in high demand, you're in a feast mode. We've gotta increase our prices. That's a time where you have more demand on your time than you actually have supply of your time. And then in seasons where you're famine mode, you have less demand on your time, a lot of extra time laying around, you're going to have to lower your rates in order to stay booked up.

Brian: So those feast periods are where you can start to test 10 to 20% price increases during those feast times. And this is where. We need to [00:22:00] get into how you schedule these things out. This is like basic freelancing that so many people don't really understand, and that is you should have a essentially a waiting list for all your projects.

Brian: If you're a high demand freelancer, especially in a feast mode, you should be scheduling out your projects on a calendar. I'm recording this episode mid-October. It'll come out late October. So if you offer any service, even if you work with multiple clients at the same time. Especially if you only work with one client at a time, you put all your projects on a calendar.

Brian: So if you're a web designer and you're like, I can work on two websites at any given time because of just of my workflow, or you're a music producer and I'm like, I got bands in the studio, I can literally only work with one at a time. You schedule it the same way. It's late October right now, let's just say you already have November booked up.

Brian: You've got the calendar full of work for this next month, you're done for November. But clients are still coming to you. Instead of just piling on more work and saying yes and hating your life and having to hit all these deadlines, you simply say, cool. I can get you in in December. You say it in the right part of the sales process.

Brian: This is not a sales episode, but there's a right way and a right time to bring up scheduling. But generally, when you have high [00:23:00] demand, you have a great reason to collect deposits. And the way I did it was I collected a non-refundable deposit to put dates on my calendar. So if you have two slots per week for whatever service you do, you might say I'm booking up eight clients for December, and I'll put two per slot.

Brian: Now December, maybe the last two weeks, you wouldn't take them That's a bad month, for example. But let's just say we're booking January now. I'd book two clients in the first week of January, two clients the second week of January, two clients the third week of January, two clients the fourth week of January.

Brian: Or if you can only work with one client a month, I'll book one client In January, I'll put a slight buffer between clients, so if things take a little longer than expected, then I still have time to do the work without killing myself. If it takes less time than expected, I have some extra time off. No problem.

Brian: If we're in October, right now we're booking up January and we still have leads coming in and people coming back to you. 'cause we're in a feast mode. within reason, you can test rate increases on those further out dates. And the further out someone's booking with you, whether it's January or February, the higher the rate increases can be, let's just say someone comes to me for music production services.

Brian: I'm booked for the next three [00:24:00] months. November's booked. December's booked. January's booked. I don't really need to worry about filling February yet ' cause it's so far away. It's late October right now,

Brian: so if I normally charge, call it $5,000 for what might be roughly a week of studio time.

Brian: I might throw out a $6,000 price point, or at the very least 5,500, and eventually you'll get to what I call your new normal pricing. This is usually a higher rate over time, especially with inflation. You should be slightly increasing rates over time, decreasing other times when the calendar thins out, but over time, it should be on an upper trajectory

Brian: and at a certain point you'll hit your upper limit of what you can charge in your niche and your industry, and that's where we start working on efficiency gains, where my earnings per hour goes up over time.

Brian: But in feast modes, we're increasing prices in famine modes. We're willing to decrease prices in order to fill up spots, or even if it's not a famine mode with dynamic pricing, we might have,be booked up for the next three months. But we have calendar opening mid-November that's like less than a month away.

Brian: And I don't want an empty calendar, let's say an empty week there, I'd rather get something, so I might throw in lower number out where instead of 5,000 for that week, I might. About [00:25:00] 4,000, 4,500. This is not a panic response, and that's the big thing I wanna tell you here. It's when we're talking about dynamic pricing, we're raising and lowering rates.

Brian: It's very calculated, it's very controlled, it's planned and controlled, lowering, not a panic response where I'm just throwing out low numbers because I'm desperate to get work.

Brian: But with dynamic pricing and proper scheduling, you can have your work planned out for you for months and months and months. I've been booked up to four or five, maybe six months in advance for my studio. All non-refundable deposits.

Brian: And while your service and you yourself may not be differentiated enough to have that long of a waiting list, you can likely get the next month to month and a half or even two months pre-scheduled and preferably prepaid for, or a,good chunk of it, non-refundable paid for. And the reasoning is. If I have you on my schedule, I'm saying no to other projects for thattimeframe.

Brian: So if you back out last minute, I get no income. That's why I have a non-refundable deposit and clients understand that.

Brian: So let's zoom back out here. We're looking for your Goldilocks zone for pricing. You've tracked your numbers first.

Brian: Second, you've killed all your inefficiencies, so we've at least gotten the ceiling down of how many hours it takes to deliver on your services. We've reduced that [00:26:00] as much as possible, and we've implemented dynamic pricing and scheduling so that you're not overworking yourself and you can better gauge how booked up you are, how in demand you are, especially in fee seasons.

Brian: Now the fourth is this. The fourth step is this. We're gonna balance what I call your three Goldilocks metrics.

Brian: Two of these metrics, we've already tracked this third metric we will have to probably figure out separately. Or track separately. It's a little harder to get, but these three metrics balance each other out. There is no one Goldilocks metric. There are push metrics and there's pull metrics. There's metrics that could be increased and others decrease, and you're actually worse off.

Brian: So this is why we have to balance these three Goldilocks metrics. The first Goldilocks metric is something called earnings per opportunity. This could be earnings per call. It could be earnings per inquiry. Earnings per offer, earnings per proposal, whatever you want. But this should be tracked on a monthly basis and compared to previous months or the previous year. So for example, this is where we're gonna come up with like maybe your, last 12 months, what did this look like?

Brian: You made a hundred thousand dollars in the last year. You had 50 sales calls. You sent out 50 proposals or whatever your sales [00:27:00] process is. That means you have $2,000 earned per call. That's your earnings per opportunity is $2,000. That's because you made a hundred thousand, you had 50 opportunities.

Brian: Divide a hundred thousand by 50, that's $2,000 per opportunity. That's one of our golden metrics here.

Brian: But now we're in a feast month and we're gonna test higher rates. Because of our dynamic pricing, we're gonna increase our rates by five to 10, to 15 to 20% on some of the new quote requests coming in, the new clients potentially coming in. So I tested higher rates on five sales calls. How do I know if I'm better off or worse off?

Brian: It's this earnings per opportunity or earnings per sales call metric. If I had five sales calls this month, if I earned over $10,000, that price increase was better for me. If I earned under $10,000 this month, that price increase was worse for me.

Brian: So if he ended up making $15,000 off of those five sales calls you had.

Brian: Then you're better off even with a lower conversion rate, maybe you only converted 30% instead of 50%, but your rates were high enough to more than counter that you're better off. This is the one metric we can track to know if our sales process is more or less efficient, [00:28:00] and this is a great way to look at your pricing tests, is your earnings per opportunity.

Brian: That's the first metric.

Brian: The second metric we have to balance with that is our earnings per hour. Again, we've already been tracking this, so you should know, but if we closed all these projects this month, made $15,000. We need to make sure we're looking at our earnings per hour on those five projects or those five calls, maybe those turn into two or three projects.

Brian: Because you'll start to see with, especially with the third metric, you'll start to see that they start to balance each other out. You gotta have higher earnings per opportunity, simply because the projects are larger, but you could tank your hourly earnings, so you might be like music production, for example.

Brian: I'm doing. $10,000 projects. ' cause I'm charging a thousand a song for 10 songs.

Brian: But these larger projects end up taking more time for whatever reason, and so I'm actually earning less per hour. That's a bad thing. So even if your earnings per opportunity went up, your earnings per hour went down, that's not a good thing. We'd like to preferably see increase of earnings per hour, or at least not a decrease.

Brian: The third metric to look at here, is What percentage of your clients referred someone else to you or repeated and came back to you

Brian: again? wedding photographer, you're not gonna get a lot of repeat clients, most likely, but [00:29:00] you will get a lot of referrals in music production. You'll get both. You'll get clients coming back to you again and again for more singles, more eps, more albums in the future, or referring other clients to you.

Brian: ' cause they love the experience and they wanted to refer their friends to you because they had such a great time. They felt like the value was worth the price or more than worth the price. So we wanna track what percentage of our clients returned to us. What percentage of our clients referred more clients to us?

Brian: Or if you wanna bundle those two together, you can just look at it annually. What percentage of our clients referred at least one client to us or returned at least one time?

Brian: The reason we look at this is 'cause this is gonna be a long-term indicator of what your business is gonna do year to year. You could crush it on earnings per opportunity, meaning you've increased rates, you're closing more deals, you're earning more per hour, you'veincreased your earnings per hour.

Brian: Everything's on the up. Everything looks great. I found my sweet spot. I'm, I'm in the Goldilocks zone.But then you realize. You've tanked your repeat clients, you've tanked your referrals. No one's referring clients to you, no one's coming back to you. You're gonna have a really tough time next year.

Brian: On the flip side, if you just look at [00:30:00] referral percentage or repeat client percentage in a silo, we could crush it there. We could have tons of referrals, tons of repeat clients, but you've tanked your earnings per opportunity, meaning. Of all the opportunities I get, I'm earning less and less and less for each of these.

Brian: 'cause my price is going down, my earnings per hour is earning less and less and less. So that's why all three of these need to be balanced. How can we best balance our earnings per hour, our earnings per opportunity, and our referral slash repeat client percentage.

Brian: Anytime you're able to raise your rates, increase that earnings per opportunity without tanking your earnings per hour without hurting your client referral percentage or client repeat percentage. That's a good thing, and that's getting us closer and closer to that goldilock zone.

Brian: Pricing is just one of many parts of making your business run, right? That's why I have over 386 episodes now. This podcast I referred you to two more episodes for you to listen to just related to this podcast. This gets very complex. It can be very hard to do. It can be hard for you to actually follow through with it.

Brian: But I try to give you as much as I possibly can on this podcast for free, for a small percentage of you where you [00:31:00] realize that I can't just go through 3 85 episodes of this podcast to find all the things that I need to grow my business. And you want a faster shortcut to this? I would encourage you to out an application to join our coaching program.

Brian: It's called Clients By Design. this is where we help you one-on-one, grow your business. focusing on things like pricing, packaging, metrics tracking, setting up your CRM, getting your marketing system in place, building a client acquisition machine so that you actually have leads coming in for you to even do some of these things because you can't do metrics tracking, you can't do price increase testing, you can't do at all if you're always in a famine zone or you don't have leads coming here, you don't have clients coming in,and this is what we help you with.

Brian: So if you wanna learn more about that. I encourage you, go to six figure creative.com/coaching. Fill out the application there and we can see if you're a good fit. And the way it works, it's month to month pricing. There is no, long term contract. You can cancel anytime.

Brian: you can stay as long or as short as you like. But the goal is to always have something we're working on to make your business better, to make it grow. And just like pricing here, these sorts of things can have a long-term impact on how your business is [00:32:00] overall. So if you wanna shortcut, you'll make this easy on yourself.

Brian: Have somebody there one-on-one helping you every day of the week. Six figure creative.com/coaching. Fill out the application and we can go from there. Anyways, thank you so much for checking out the podcast. Six figure Creative. If you're new here, I encourage you, again, can go bounce around Before going off.

Brian: To apply for coaching, I'd like you to get to know us, our methodologies, how we think. Six Figure Creative is a team of like 11 people, about to be 12 people now. So we got a lot of experience, a lot of different backgrounds, a lot of perspectives coming at you. We've had some of the coaches on the podcast as well different episodes, so maybe you can find those.

Brian: that's all I got for you this week. Thank you so much for listening to the six Figure Creative Podcast. See you next week. Piece.