PRICING 101. How to increase your income with three tiered pricing - 1 -

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1 PRICING 101 How to increase your income with three tiered pricing - 1 -

2 How to present your pricing In the last section I talked about how to price yourself, but knowing how to price yourself is useless unless you understand how to present your pricing. There is one mistake that many freelancers make when getting started with project based fees. They only send over one price point. If there is one thing you take away from this chapter, it is this: Whenever possible, propose three prices The big mistake that most people make is that they only send one price point. When you do this, you are putting the client in a situation of saying, Yes, No, or, Can we negotiate? That is not a great way to set up a potential project. Often, you will get a no to the price you propose, or the client will come back and try to negotiate your estimate. Since everything is bundled in one price point, they will come back and say, What if we didn t do X? Could that bring the budget down to Y? When you propose one price point, you put yourself in a position of negotiation and you put the client in control. Alternatively, when you propose three price points, you take control

3 How to set up three tiered pricing To set up your three tiered pricing you will have a low, middle and high price point package. The low price point This is your bare minimum package. This accomplishes the client s main objective but doesn t include everything that they want. This package should be designed so that clients don t want to take it unless they can t afford anything else. The middle price point This is your ideal package. This accomplishes the client s primary objectives. This is the package that the client will be happy to have. The price point for this package should sit at, or slightly above, the estimated budget that you expect the client has to spend. The high price point This is your luxury package. This is where you include all the bells and whistles or additional upsells. In this package, include anything the client has expressed interest in, but isn t necessary to the full scope of their project

4 The benefits of three tiered pricing When you propose three price points, it does two major things to help your business: First, it shifts the conversation in the client s mind from, Do I hire this person?, to, Which package do I hire this person for? That is a powerful shift. As soon as you start doing these tiered packages, you will hear less of the word No and more Yes to different package levels. Second, it puts you in the position where you don t have to negotiate. You have already laid out three different options of value and price points. If a client can t afford the high option, then they get the middle. If the client can t afford the middle, then they get the low. When you set up tiered pricing, you are putting yourself in a position where you don t have to negotiate. Instead, the client can choose the package that fits their budget and needs

5 How to create the three tiers A big struggle for many creatives who are starting to use this pricing strategy is, How do I come up with the three packages? That comes down to your discovery process with the client. In my chapter on The 9 Steps of Selling a Creative Project, I talk about Discovery. Discovery is where you uncover all the objectives, goals and desires for the clients project. At this phase, you want to try to figure out anything and everything they may be interested in. When you go into Discovery, don t just focus on the project at hand. Try to think about additional services that you could offer as well. For example, as a web designer, clients come to me for web design, yet in reality they often have many more needs such as: - Copywriting - Copyediting - Graphic design - Logo design - SEO optimization - Marketing strategy - setup - Google Adwords - Etc - 5 -

6 With each client that comes my way, there is opportunity to include additional services or upsells in the project. During the discovery process, I work these services into the conversation and see if the client has any interest in them. If they have interest, then I have the ability to include those as an upsell in a different package. If the client doesn t want different services, then you can also create tiers based on your level of involvement. Marketing expert, Jon Schumacher specializes in Google Hangouts and webinars. He offers different tiers of pricing to his customers. The low tier is consulting and coaching. The middle and higher tiered packages are actual hands-on involvement where he does the work for his client. When you tier your packages, it can be based on the services that you offer, or your level of involvement

7 Pricing is more than just the money When you are dealing with pricing, it is about more than just the money. It is about quality of life. When you price yourself poorly, you find yourself working far more hours and making less money. You find yourself in constant negotiations and chasing the next paycheck. If you can change how you handle pricing in your business, then you will see your income, free time, and happiness all begin to grow. Jake Jorgovan is a freelance web designer and digital nomad. He publishes a weekly newsletter about how to launch your freelance career, get more clients and work from anywhere at

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