Even Ron Burgundy Thinks You’re An Amateur

Hourly rates are for rookies, shady motels, and sweatshops. Screw that!

Even Ron Burgundy is with me here.

😔 But I get it…

Hourly rates are easy to understand. I used them for years.

But they absolutely limit your potential.

And customers often expect them.

Yet ONLY because you haven’t offered them an alternative.

Start by listening.

Customers will tell you what they want.

Ask questions. Then listen some more.

You’ll hear what they need too.

What if the requirements are a bit fuzzy?

If what they’re laying down is clear as mud, don’t fall back to slinging hours. Big mistake.

The goal is to define the pressing challenge and devise a better outcome.

Instead, sell them a design package. Or an assessment package.

Or help them develop a business case to validate the need by scoping that within… you guessed it… a package.

• Set a flat fee for this package
• Set expectations about what is and is NOT included
• Use constraints — 3 iterations, 2 half-day workshops, etc.
• Share what you will deliver
• Stick to your guns

These packages don’t always have to be highly profitable.

But you should strive for that.

Because they are highly valuable on their own.

Plus, you know what?

Now you’re getting paid to scope future projects too. 🥕

So that you can price each one profitably as well.

Based on the value to your customer. Which is key. 🗝

What if I don’t know how to price it?

You’ll learn a lot about pricing this way so don’t get caught up in finding the perfect price out of the gate.

Instead, use this quick and dirty method to derive your initial pricing.

Estimate the number of hours you think you’ll need, add 25%, and calculate a price using your old hourly rate. Then erase hourly rates from your brain.

Now you’re selling an outcome and on your way to a more profitable future.

One where you’re aligned with your customer.

Because they know what they are getting and paying UPFRONT.

From there, increase the price by 50% each time you sell the package until most customers push back.

That’s your sweet spot. Cherish it.

Prospects that aren’t serious will filter themselves out.

This is the low-tech way to dramatically improve profits and win better-aligned customers.

Is this approach perfect? Not by a mile.

Yet it’s so much better than slinging hours.

And bumping up against that pesky income ceiling.

And struggling with whether you should just. work. one. more. hour. 🤮