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I feel bad charging what I know I am worth.

Discussion in 'General Business' started by Sorvoja, Sep 16, 2004.

  1. #1
    I have a problem charging owners of small business what I am worth for my SEO services. I feel bad for them, I think about their kids who might not get shoes and if they would have to skip dinners to be able to pay invoices.

    I know that all if this lacks, I have never meet a poor business owner in my life and whatever they pay is an investment in their online business, but still I feel bad metioning my hourly fee and having to listen to the short silence before thay say it is allright.

    Today I alked with a business owner and he could not belive the total cost of the project it was 40% under the price offer he got from a really bad (in my opinion) SEO firm.

    Do any of you feel bad talking about money and that stuff, or are you all you smiling while you drive to the bank?
     
    Sorvoja, Sep 16, 2004 IP
  2. Smyrl

    Smyrl Tomato Republic Staff

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    #2
    I have same problem but am going to have to start saying either pay for my services or do it yourself.

    Shannon
     
    Smyrl, Sep 16, 2004 IP
  3. Such Great Heights

    Such Great Heights Peon

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    #3
    I have the same problem.
    Which is good and bad.

    But this "problem" is probably why "consultants/small business owners" are mostly jerks. :confused:

    Of course this is speaking from my own view, but I have seen plenty of consultants with just enough skill to charge an arm and a leg for something they barely know how to do. ;)

    Once you think of their family and how little timmy isn't going to get new shoes, then think about how you wont be able to pay rent/mortage this month if you don't charge them what you are worth. It's hard to do, but it seems like a necessity. :eek:
     
    Such Great Heights, Sep 16, 2004 IP
  4. jebby

    jebby Active Member

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    #4
    I am often apprehensive about billing issues. I think that you have to develop confidence in your abilities and charge what it's worth. I've found people are suspicious when you charge less than what other people do.
     
    jebby, Sep 16, 2004 IP
  5. Old Welsh Guy

    Old Welsh Guy Well-Known Member

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    #5
    Charge your worth, but be honest about the task ahead. If I have a problem with charging a client, then I normally push them to do more themselves in order to bring the payment down a little.
     
    Old Welsh Guy, Sep 16, 2004 IP
  6. jebby

    jebby Active Member

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    #6
    That's a good way to go about it, OWG. Often I get people who are acquaintances who give the impression that they want a deal for knowing me. I don't give them a deal, but I'll try to work out a way for them to save money, like by customizing a package for them a bit more and leaving some of the work to them. If it's what you do for a living, you can't really be giving deals to everybody.
     
    jebby, Sep 16, 2004 IP
  7. Weirfire

    Weirfire Language Translation Company

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    #7
    I also feel bad but as a new business I'm selling my services for half the market average so I always use that line when I'm talking about the fee. It makes me feel better and it makes them feel better. With time I'll raise the prices a bit and probably won't feel bad about doing it either. The price of online services are a lot cheaper than advertising/costs offline.

    If you are offering competitive prices then there's nothing to feel bad about. If you present everything in a professional manner then the business owner's will be less likely to question the fee.

    If you know they are going to get their moneys worth eventually you'll be getting clients through them because they'll have told someone what a great job you did. :)
     
    Weirfire, Sep 16, 2004 IP
  8. Ajeet

    Ajeet Well-Known Member

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    #8
    If I can broaden my response to include offline (non-tech) management consulting, I have often been told that I am the most expensive consultant people have come across. I do this guiltlessly for many reasons:

    1) I charge on a per day basis, and am confident that I am far more efficient than others.
    2) When starting with a new client, I always encourage them to go with a really small project first. Something like 3 days.
    3) As part of our initial agreement, I tell them exactly what I will charge, exactly what I will deliver. Additionally, our working notes include a quantitative measure of what might finally result if my recommendations are implemented.

    After all this, I think it is unfair of me to doubt the business owners judgment in assessing ROI. So, I do not feel guilty at all, as I am very very far from being in a monopolistic position.

    Thanks
    Ajeet
     
    Ajeet, Sep 16, 2004 IP
  9. Dji-man

    Dji-man Peon

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    #9
    I hate talking about money, but i'm still charging full price. If the client thinks my services are expensive, that just too bad for him. Since I already have a full-time job, i'm not going to work on week-end for peanuts. ;)

    Charging the full price also add credibility and prove that you're an expert. I always wonder what's the catch when someone charge 50% of the market price when i'm hiring people/companies at work. If you give a special rate to someone, he may recommand you to a friend who will ask for the same rate, then you're screwed.

    So what I do when a good friend (aka drinking buddy ) ask me to do work for them is that I charge them full price on my invoice, so that they know what my rates are, and then, on another line, I give them a discount for being a regular client.
     
    Dji-man, Sep 16, 2004 IP
  10. SEbasic

    SEbasic Peon

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    #10
    I don't feel bad.

    I know I am worth what I charge (Which really isn't that much when you think of the return that the clients gain on their investment).

    Like people have already said, until you build up a confidence in your abilities, you are always going to be uneasy charging large amounts of cash.
     
    SEbasic, Sep 16, 2004 IP
  11. jarvi

    jarvi Well-Known Member

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    #11
    Be up front with what you will charge and what you will deliver. As long as you deliver something with a value greater than what you charge then the client will always come out ahead.

    David Maister is a well known professional service firm consultant and although he is an ex-Harvard professor and author, he quotes his daily rate on his website (currently $18K per day plus first class travel) and offers an unconditional guarantee. I think he has only had the guarantee invoked once.

    The guarantee may help you as it provides a bit of a safety net for your clients. It shows that you are willing to take some of the risk, and basically you're backing yourself and your services. Have a look at some texts about guarantees for services (rather than products). A good text is Extraordinary Guarantees by Christopher W.L. Hart. Unfortunately I think it's out of print but if you can lay your hands on a used copy it is well worth the read.

    Some of my consulting work is with finance departments and invariably the people I work with see my invoices and from time to time there are remarks about my rates. I never get into a conversation about them other than to say I am worth it. But then they are not the people I am negotiating with for the rate...

    Sometimes be it a co-worker or a client, they are just jealous that you can get the rates you ask for and they wish they had the skills, so always be willing to share your knowledge as well. If you keep everything to yourself you will end up doing the same thing everyday and never learn new skills because you won't have the time. A classic case of thinking you are indispensible, when it is usually better (and more satisfying) to teach others and see the benefits.

    Sorry, got a bit of track in the end but hope it helps.
     
    jarvi, Sep 16, 2004 IP
  12. compar

    compar Peon

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    #12
    It seem to me that the point most of you are missing is that "what you are worth" can only be measured by the economic gain of your client. If the client can't feed his children more as a result of your service then you are worth nothing.

    All issues of worth have to be based on return on investment. If you are buying a bond or other secure investment that will pay you $100 in one year then it is worth $95 today given the low interest rates that prevail.

    If you are optimizing someone's web site you are worth nothing unless your work results in the client making more from his web site than your fee. How much more? Probably 10 to 100 times more.

    Nobody has an inherent worth. Your worth is a function of the economic gain your work produces.

    So if you are confident that your work will increase your client's wealth then you can state your fee without concern. But if you really think that by paying your fee he will be less well off then you are being a charlatan by attempting to charge him anything. If your work produces zero economic return then it is worth nothing no matter how many hours you may have spent.
     
    compar, Sep 16, 2004 IP
  13. NewComputer

    NewComputer Well-Known Member

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    #13
    I guess my first question would be why? No one should ever feel bad for getting paid what they are worth. Unless what you are charging more than you are worth OR you can't deliver on what you are charging for. I do a lot of Preventative Maintenance which is not a bunch of work, but pays very well. I used to feel bad, then I realized, these people could go somewhere else, who charges the same, but does not deliver the same service. Since then, I have been happy and so have my customers. Only one 'bad' situation in all my years.... *knocks on wood*
     
    NewComputer, Sep 16, 2004 IP
  14. Shine

    Shine Peon

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    #14
    Every workman is worthy of his hire. Don't feel bad receiving what is due to you.
     
    Shine, Sep 25, 2004 IP
  15. New Jersey Home Inspector

    New Jersey Home Inspector Grunt

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    #15
    My theory is if 1/4 of my clients are not complaining about my fee I am not charging enough and it is time for a rate hike.
     
  16. Epica

    Epica Peon

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    #16
    I hate talking to clients about $$. No matter how quantifiable my results are , I have a hard time being confident in a valuation of my own skills. Low self esteem strikes.

    Self esteem is necesarry I think to be a good salesman - 'by Good Salesman' I mean one that can present the argument, persuade the potential, and close the deal - with-out remorse or guilt.

    I was so bad at first that I started off a $1000 potential client meeting, and ended up volunteering half the work because I said it was just 'so easy', and recommending a competitor for the rest because they were better :( now THATS BAD :(

    Nowadays I set my pricing structure, post examples/case studies and let my secretary (wifey ;)) take the calls/emails. She closes 7 out of 10 deals with confidence, no overpromising, undercharging - just 'This is our service,This is our price.Thank you.'

    By putting setting a resonable value on your services and then putting a middle man between you and your clients you seperate yourself from the $$, and focus on the deliverables.

    For instance, if you have a:
    $50 Blue Package: 4 Widgets, 3 spindles, 2 flags
    and a
    $100 Red Package: 10 widgets, 10 spindles, 10 flags
    and the client chooses the Blue package - Think of it as 4 Widgets, 3 Spindles, and 2 Flags, not as $50.
     
    Epica, Jul 15, 2005 IP
  17. Weirfire

    Weirfire Language Translation Company

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    #17
    It's quite funny seeing this thread being brought up again. I've learned so much since that last post and 1 thing I've learned is to charge what my services are worth.

    If the customer moans about the price I can confidently tell them how much they will get back. I also tell them how long it will take me so they know that developing their website isn't just a 5 minute job. Most of the time I work more than what I quote because I like to provide a finished service and giving the customer a reliable service is an investment in marketing.

    When you are talking to them about prices just remember how much they will make from your services ;)

    Another member on here who no longer posts recommended a book to me which has helped build my confidence. The book is called "How to win friends and Influence people" by Dale Carnegie. I bought it off eBay for £3.42 lol. It's a very interesting book full of obvious facts that we just don't apply when talking to people.
     
    Weirfire, Jul 15, 2005 IP
  18. Epica

    Epica Peon

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    #18
    You know...Its been YEARS since I read that book...I think I'll crack that open again - (thanks for reminding me about it Wierfire)

    You're right about the "just remember how much they will make from your services"

    I had some clients hassle me about the costs of my service only to figure out later that they make 10-100x that back again in just a short time. - Hmmmm - Time to start monitizing that performance.
     
    Epica, Jul 15, 2005 IP
  19. Weirfire

    Weirfire Language Translation Company

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    #19
    What you should say is... "Okay, perhaps you are right about the costs. How about I charge X amount and take 10% of your income from the site for 2 years" Then you end up making a load more from it while being more tax efficient. :)

    Make the moaners feel like they are getting a bargain when you're actually charging them more. ;)
     
    Weirfire, Jul 15, 2005 IP
  20. Epica

    Epica Peon

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    #20
    Good lookin' out :) - Residual income is just so much sweeter than the kind you clock in and out for!
     
    Epica, Jul 15, 2005 IP