How to get good at quoting prices?

[Krass]

I'm not sure if this is the correct thread to post in, sorry mods if it isn't.

I've been networking like crazy lately and I've landed a few leads:
- fashion brand, well established but looking for someone to handle online marketing
- dentist, also quite established, looking to build online presence to get more work
- aesthetic doctor, looking to start up her own practice with no knowledge of marketing but is aware of the power of the internet
- and a few more I'm following up closely on

I'm not sure how to charge them, and I'm always stuck in this mindset where I can't charge high prices for some reason. It's just a mental block I guess. How do I get out of this mental block? Any books I can read? Really need help with this.. Thanks

 

[ryandiscord]

I've wondered this myself, if I've been going about it right.

I determined what one hour of my time is worth. I based this off of my experience level, what others charge and ultimately what would make me happy to do the work.

Then from past experience determine how long it will take to complete the task and charge accordingly. This was enough to get me started but I wanted to dial this in. I began logging the time spent for each project against the price I quoted. Then moving forward I could adjust how much I charge based on the overall time it took. Since logging my time, by project, I've realized areas that I'm not as proficient and need to either charge more time or improve the process.

I've been burned a few times by thinking I should charge less because the client can likely only afford so much. Avoid doing this and stick to what your time is worth, you'll end up happier and so will your clients.

 

[ryce889]

Unless you're just starting out and need the experience or the project is a passion project, then you should charge what your time is worth, not what you think the potential client can afford. Change your mindset so that you aren't afraid of losing clients and scaring away any potential prospects - if you're good at what you do, you should have a strong enough referral network that it doesn't matter if you lose out on business due to them balking at your price. It can become a grind if you work for less than you think you're worth and can potentially kill your reputation if you decide to let things fall by the wayside because you aren't getting paid enough to be motivated to excel at the work you're doing.

 

[Ryuzaki]

I've always been a fan of quoting by project. It makes everyone comfortable. Knowing that everything generally takes twice as long as you think it will, you can allot for that in your turn-around-time in addition to unforeseen events and other variables.

This works well on one-off projects like web design, link building, etc. Ongoing marketing is definitely a different beast, but I'd still charge based on "packages" where I have a good feel on what the time commitment will be. In the end, if they wanted someone to spin their wheels for XX hours a week regardless of results, they'd hire an in-house employee. They want results. So I market to them based on results. If you start to talk about hours and all of this, you're dropping yourself down several notches in their mind psychologically. They, too, are bosses and you have a straight line to the boss, so you need to come at it that way, not as a wage laborer.

This also tends to make pricing a bit easier. If you ask them to provide you a document with their specific goals, you can take the time to look it over and provide them with a quote. They don't want to know the details of what it will involve for you. They want it done and they want to know what it'll cost and when it'll be done. And this way you can draw up a contract / project briefing that they can agree to and sign. For big projects you can include an initial deposit and milestone payments too, to protect everyone.

Regarding setting a price, it truly is a psychological game. If you're goal is to be near the same price as everyone else, you're racing to the bottom and killing your industry. Let everyone else do that. And when you speak to these people you need to be the most confident and knowledgeable person there is. That doesn't mean tossing out jargon and buzzwords, but being able to break it down so that THEY, someone with no knowledge, can understand it. That's a true sign of internalized mastery, being able to simplify the overview of your life's work to a casual observer. It's a form of beauty that arises out of mastery, and they'll realize that even if they can't verbalize it or even notice it's happening.

With that being said, you can charge 1.5x, 2x, 3x over everyone else, and not flinch. Let them negotiate down a little bit if you want, who cares. You're charging such a premium that you're still in the premium zone. Let them open the pressure release valve a bit so they feel like they're getting the best at a discount, which is still a premium. Then provide killer work, among the best. If you can't honestly do that, then don't go too hard with the pricing, but still go hard. People are trained to project value on high-dollar items, whether it's true or not. It's all about psychology.

TL;DR: Divide the time you think it'll take in half and add that back to the total, or double the total. That's going to be far more realistic than what you think, due to "variables." Some with pricing. You want to overcharge. This gives you room to breathe, negotiate, and makes you seem more valuable. Be able to back it up.
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I played with this concept for years straight, monthly, to see where it stops. I pushed it as far as I could to the point I had people paying over $2k for a single, non-contextual link placement on one of my properties. I recently charged triple, as a single master, than what an agency was quoting someone, to take their site responsive. I also took 3x as long. In the end, I guarantee it was 3x as good. If you can back it up, then charge for it. And if you do back it up, then your buyer's will be more than pleased and come back for more. Most people are willing to pay to not have a headache, they want to pay for competence because it makes life easy. They're willing to pay a premium because it's hard to find. Be the solution.

 

[voLdie]

I can't remember who said it possibly on WF but "if they don't wince when you tell them the price you left money on the table."

 

[Tao]

But that thread of WF probably also had people asking "show proof of wincing, or BS!"

 

[Giovanni]

Start breaking down what your costs are so you can always ensure you will price high enough to not lose money. Knowing my costs down to the penny really helped me get over pricing hurdles.

 

[dgenius]

Like Giovanni said break down your costs, and just add a little bit more. It's always better to be just slightly price a little higher just incase you run into problems then those costs will make up for it. Better to over estimate just a bit then underestimate.