#008: Seven Great Reasons Why You Should Raise Your Fees Starting TODAY

Summary: In this show, Ed will discuss 7 important reasons why you should NOT compete on price. And why you should raise your fees starting today.

Uma Thurman paid $5 for a milkshake in the movie "Pulp Fiction."

John Travolta was appalled.

After all, you can get a milkshake at McDonald's for $1.50, right?

But then he tasted that cold, creamy treat. And he was sold!

Cheap milkshakes may work in the fast food industry. And everyday low prices might work for Walmart.

But low fees will only lead to disappointment and burnout when you're a freelancer.

In this show, I discuss 7 important reasons why you should NOT compete on price. And why you should raise your fees starting today.

The notes that follow are a very basic, unedited summary of the show. There’s a lot more detail in the audio version. You can listen to the show using the audio player below. Or you can subscribe in iTunes or Stitcher to get this show delivered straight to the Podcasts app on your smart phone, tablet or iPod.

Reason #1: Low fees attract problem clients

  • They're not easy to work with
  • They complain
  • They bombard you with constant emails, calls, requests...
  • Their expectations are often unreasonable
  • They expect you to do more for the same (or less)
  • They continually push the boundaries
  • They're typically not savvy
  • They don't respect you
  • They treat you like an employee, not a valued partner
  • And to top it off, they tend to be the slow payers!

Reason #2: Low fees attract clients that refer you to OTHER low-paying, problem clients

  • They can't wait to tell their buddies about the STEAL they got!
  • Their colleagues are usually just like them
  • Plus, by revealing how much they paid for your services, they've already set the expectation before you event talk with the new prospect!

Reason #3: Low fees attract low-commitment clients

  • They just don't see the value of the EXTRA stuff you bring to the table (your unique value)
  • They see your product as a necessary evil -- as something most others could have done just as well
  • So they treat you like a commodity
  • They're not loyal ... and will drop in a second!
  • They're not in it for the long-haul
  • They don't value quality
  • They don't value your skills, experience, expertise

Reason #4: Low fees repel (or scare off) high-quality clients

  • It shows a lack of confidence in your work and your value
  • Raises questions about your abilities
  • Overshadows all your other good qualities

Reason #5: Low fees get you into a dangerous cycle

  • Almost impossible to raise your rates with that client
  • You'll start seeing yourself as a lower-value resource
  • You'll start believing that story, which will affect your psyche...
  • Which shows up in your conversations with other prospects...
  • Which keeps you at a lower pricing level...
  • And so the cycle goes (hard to break out of it!)

Reason #6: Low fees mean you have to work harder

  • You need more projects and clients to earn the same amount
  • There's a fixed cost to on-board a client and start a new project. You can't make up those fixed costs with higher volume.
  • Fastest road to burnout
  • Very time-consuming to find the number of clients/projects needed to meet your income goal

Reason #7: Low fees are unnecessary!

  • Unless you're just starting out as a freelancer (or have few or no skills), there's no reason for this!
  • Most experienced freelancers will tell you that, in hindsight, they UNDERPRICED their services
  • You're NOT Walmart! Don't fall prey to the consumer mindset of finding the low-cost provider.
  • Take time to find your value and your differentiators
  • Results don't have to be tangible—what are clients saying about your work?
  • Do you deliver on time, every time? Testimonials?
  • Consider declaring a niche or specialty! Are there patterns in your work or the types of clients you work with (industry, type of client, type of strategy you usually work with...). Hear my thoughts about this.

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Finally, what do you think about these pricing issues? What have you learned from under-pricing your services?

Please let me know in the comments area below.