259 – How do we know what to charge? WordPress Business Bootcamp – Series 1 / Episode 2

259 – How do we know what to charge? WordPress Business Bootcamp – Series 1 / Episode 2

‘WordPress Business Bootcamp’ with Nathan Wrigley and David Waumsley

Hello, welcome to another in the WP Business Bootcamp series. It’s the series where we relearn EVERYTHING we know about building WordPress sites and running a web design business from start to finish.


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The Premise of this series is that we have our first potential website client. All we know is that she is a lawyer in a large city. She asked a mutual friend who thought of us. We have few skills and no business or processes in place. She has no previous website. No branding or copy.

As we go through the series, Nathan and David will be taking different routes to get our business going and our client’s website up and running.

Presently, we are on Season 1 of the series which is looking at the things that need to happen before the build.

How do we know what to charge? Some initial thoughts prior to recording:


Nathan:

I’ve always worked on the, “how long do I think that that will take” and then make a number up from there, model. CMS’s really made these calculations easier for me, and made it easier to do the work in general. Page Builders went further.


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This has mostly worked but it leaves me open to being beaten on price from rivals (this happened more and more), plus life got more expensive with family, but my skills did not really. It felt like younger people with less expenses were able to increasingly beat me on price.

David:

I’m a fan of the Agile mindset and project management style. This has influenced the type of business model I have gone for in the first episode. I don’t expect to make much profit on the building site but want to engage in a long term relationship with the client, making a more passive income from hosting and care.

I’m starting from the premise that clients have little clue what the web can do for them, and we do not know what they want until we start. I will plan to start offering a MVP cheap. David’s Agile pricing approach is explained here.

Episode intro: The Problem

  • Gig economy, this is now the reality of the world. It’s international, and cheap to get most things.
  • Many going pro will not have run a business before. They may not be aware of how much time is lost to marketing, accounting, general management and meetings.
  • Just keeping up to date in the industry can be a full time job. How many other costs there are, like software, insurance, legal fees, utility bills and transport.
  • How do we come up with an hourly cost for ourselves even if that’s never made public.
  • Web designers rarely know what they can charge for a project? You see many asking groups what other would change for X, but the answers vary and the thread descends into unsolicited business advice.
  • Location and expectations of target audience are important.
  • Clients rarely provide briefs that allow for accurate quotes. Even if they are clear on the design and functionality, you have to collaborate with them and perhaps many stakeholders.

Pricing models

Fixed Fee

Service > Cost  > Price > Value > Client

The more traditional model. With a web project you get the price by costing the scope of the project. The hours, business running costs and what you need on top for profit.

Value Pricing

Client > Value > Price > Cost > Service

A popular augment for Value Pricing is that clients do not know what the cost of their website should be (only perhaps the cost of others).

You start with who they are (how and what they have to spend). What is valuable to them ie. what problem you can solve that has a high value?

It a very scalable concept for courses because you say stop trading your time for dollars when with the right initial question you can win 30K jobs.

Nathan’s thoughts:

Nathan can value price based on the last episode (where for the sake of this series Nathan is going to deliver the Waterfall design process. Ie a scoped project where price is agreed for the end deliverable)  He will have an issue applying this to ongoing jobs for clients. Chris Lema says he does though.

David’s thoughts:

David can not value price easily. He is going the Agile route. The client and design collaborate and learn from doing. The value will change if the process is done correctly. Probably best to charge for fixed sprints of work with set time. The Agile project will be a set number of sprints.

Pricing tactics

  • Discounts
  • Loss leaders (perhaps the money is made back in hosting and care).
  • Do we end prices with 97?
  • Do we put fake high prices and discount them like products (endless sales furniture stores)?
  • Do we provide price option like product (fake high price to make the expect price look relatively low)?

Nathan: Can use these.

David: Can’t so easily.

Key questions:

  • Are we trying to establish an ongoing relationship or does the relationship end with the deliverable?
  • Can you get in quick, charge for what the client say they want and get out before the realise this web stuff is complex and ongoing?
  • Do we have an amount we will not go below (or above)?
  • Do we give a price and cut off features if they say it is too high?
  • Do we give a low price and upsell add-ons (keyword research, testing, extra browser support)?
Nathan Wrigley

Nathan Wrigley

Nathan writes posts and creates audio about WordPress on WP Builds. He can also be found in the WP Builds Facebook group.

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Transcript (if available)

These transcripts are created using software, so apologies if there are errors in them.

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[00:00:00] Nathan Wrigley: Welcome to the WP Builds podcast, bringing you the latest news from the WordPress community. Welcome your hosts, David Waumsley, and Nathan Wrigley.

Hello there. And welcome once again to the WP Builds podcast. This is episode number 259 entitled. How do we know what to charge? It was published on Thursday, the 16th of December, 2021, my name's Nathan Wrigley. And in a few short minutes, I will be joined by my colleague, David Wamsley, as we go through this particular episode.

But just before we do that, a couple of bits of housekeeping, I'll keep this very short. Please head over to WP Builds.com forward slash subscribe. If you like what we're doing here at WP Builds over there, you will find a page and there's a couple of forms that you can fill out two different newsletters for two different purposes.

Plus there's all the different ways that we communicate on social. So there's our YouTube channel, Facebook group, Twitter handle, and so on. I'd really appreciate anybody who wants to join the community. That's WP Builds.com forward slash subscribe. The other thing to mention is our mastered on instance now mastered on, is a open source federated version of Twitter.

And you can find [email protected] Yes. Believe it or not. That is a URL, WP Builds.social. And if you want to join, there's about 60 people. So far, it's a little bit light on the ground, but if you want to swell that conversation, certainly go and subscribe, and I will authorize you into that group. That would be really nice.

I know that black Friday has gone, but we've still got our deals page on the go WP Builds.com forward slash deals. If you want to find some WordPress deals that are there 365 days of the year. So I describe it as a black Friday page, but for every day of the year, and you can search and filter for your own deals on there.

WP Builds.com forward slash deals. But mark that for any day of the. Another thing to mention is that this is going to be our last episode before Christmas taking a couple of weeks off. So the next episode that we released will be on January the sixth in 2022. So if you notice that we're not coming into your podcast player, that's the reason I think it's probably a good idea to take a couple of weeks off.

I hope that you guys also managed to get some time off if the holiday season is coming around in your part of the world. Okay. Let's get stuck into the podcast. Showy, as I said, it's episode 259 entitled. How do we know what to charge now? This is the second episode in series one. I have a new series that David and I are doing, it's gonna probably span maybe a year or more.

And it's called the WordPress business bootcamp. And the premise is that we're starting right from the very start of our WordPress or indeed website building journey. We're trying to unlearn absolutely everything and go from the very, very beginnings. And today we're trying to figure out how might we charge?

So we set up the debate. If you like, we talk about what the problem is, what kind of things do we need to be thinking about when we're trying to formulate what our pricing strategy would even be for our very first website, perhaps we go for fixed fee, perhaps we do something more like value pricing, and then we go into the minutia of the different tactics that you could employ and how you might develop your pricing strategy over time.

It's a really interesting. And I hope that you enjoy it.

[00:03:45] David Waumlsey: Hello, welcome to another. In the WP business bootcamp series, it's a series where we relearn everything we know about building WordPress websites and running a web design business from start to finish. The premise of the series is that we have our first potential website client.

All we know is that she's a lawyer in a large city. She's our stay mutual friend who thought of us. We have few skills and no business or processes in place. She has no previous website, no branding or copy Nathan and I, as we go through the series are going to be taking different routes to get our business go in and our client's website up and running.

So we are presently on season one, which is the, in the series, the part where we are looking at the things that need to happen before we build. And we are on episode two, where we are asking ourselves, how do we know what to charge? Shall we quickly recap on where we were from the last episode.

[00:04:45] Nathan Wrigley: So in the first episode, so you'd obviously have to go back and listen to previous one.

We were talking about all of the things that would happen before the build in terms of realistically defining our business model. And there was obviously a lot to say there, but I guess it could be boiled down to just two different approaches. David's taking an agile approach where he's iterating, over a period of time and he's doing little sprints and he's trying to get the client's website built in that way.

And my approach is going to be more the, trying to figure out how to do it in terms of scoping out the project, giving giving a proposal, doing a contract, and then finally building it all and handing it over and saying, thank you very much. We're all done. So mine, you could characterize as being the waterfall process and David's, you could characterize as being the agile practice.

Yeah a

[00:05:41] David Waumlsey: traditional model you're going for, which is strange for us because we're almost swapping around here, with the kind of apple and the, the Mac and the PC thing. Yes. It looks like I'd go for the trendy modern thing. And you're going for the most stable things, which I

[00:05:57] Nathan Wrigley: guess more traditional the, the ones.

Really the only thing that I would have known a few years ago, and to be perfectly honest, the whole agile thing is a bit of a mystery to me. So I'm learning from you as we're talking over these. Yep.

[00:06:12] David Waumlsey: And I'm learning as I literally am. I've moved that way without knowing there was a movement and now I'm working out what that movement is all about, and it's really more of a mindset.

So anyway, how do we charge, which is, I think a big problem that I see this in lots of those kinds of web design groups, usually related to WordPress, that I'm in, it comes up all the time where someone will go in and say, I've got this job. It's maybe one of the early jobs. What would you charge for it?

And pretty much what they get is lots of unsolicited business advice. And everybody's got a kind of different model in mind and the prices vary, right? I don't think anyone knows. And I certainly didn't know,

[00:06:53] Nathan Wrigley: did you? No. No. And I'm still puzzled by it. I don't think I've reached any kind of perfect equilibrium and knowledge that this is the perfect way of doing it.

Absolutely not the but I guess this is the bedrock of absolutely everything that you're doing, because essentially if your business isn't generating revenue, you don't really have a business. You've got a big hobby and yeah, you've got to figure this out. But what I would say at the outset is you just to some extent you are going to have to make it up.

There's going to be a moment in time where you are going to think to yourself, how. Okay. Is that the right number for me? And you're going to be able to say to yourself, yes, it's fine. If this project comes in and I can do 12 of these a year, then I'll be in profit and I'll be in enough profit to make my life comfortable, or however you want your life to be.

Or you're going to have to say no, that number doesn't work and have a bit of a rethink, but it doesn't really matter what pieces of advice you get, which routes you take. You are. There is going to be a moment where you are literally making things up. And I think that's one of the most difficult things that I find, I mean, you, you go into a shop and you buy things.

And sometimes I'm really curious. I went into a shop losing the plot a little bit here, but I went to a shop the other day and looked at the blankets. My wife wanted to buy a blanket and I looked at the price and I was like, H, how does that blanket cost this much? You'll take it from this, that I'm a, skinflint don't want to spend money on blankets, but the point being, I could see for me that blanket was literally 10 times what I thought it was worth.

And so I just thought, okay, they're just making it up. And I left the shop and it's fine. Probably they'll sell a boatload of them and that's fine as well, but you've just got to get to the point where happy,

[00:08:44] David Waumlsey: yeah, exactly. And I think. There's lots of advice out there. The first kind of advice I heard, which we'll talk about the different models here, but assuming that you have to calculate how much you need to be paid for your time.

The first advice I used to hear on this was along the lines of you need to, you'll go in from being perhaps an employee to be self-employed perhaps for the first time, which many people will, and you'll need to calculate how much time is not productive, where you won't be doing the web design stuff.

You know, all the stuff that's going to go and all your costs as well for your business, your software, your insurance, your legal fees, all of those kinds of stuff that also has to be calculated into kind of work out what you need as an hourly rate. And I think probably in some ways we all need to have.

But here's my problem with it always. And maybe it's your problem. I didn't go and say, I'm setting up a website business and the beginning of this month and I'm going to be working full time on it. There was always some other streams of income or it was always done while I was also perhaps an employee in some other capacity and stuff.

So that never, it never resonated with me that approach.

[00:09:56] Nathan Wrigley: I think you've raised a really interesting point though, in that you have to assume that a lot of your time will not be working on the project. So if you're incredibly lucky, which I would imagine this, what I'm about to say is all. 0% possible in that you will finish your website and the very next moment, the very next day, a new piece of work will fall into your lap and you will embark upon that and you will finish it.

And then the very next day and you, or your roster is full and so on, there's going to be downtime. But also something that I never thought about was the fact that I needed to cost in all of the things that had nothing to do with building a website. The time spent on phone calls, the time spent on contributing to my own blog or creating content, or the time spent putting Facebook ads together or Google ads or whatever it might be, all of these things.

And also just the times. Where literally nothing is happening. You got to have a bit of time off and holiday time. You've got to allow for that. So I didn't do the, here's the number that I need to be making each year, then divide that by the amount of projects, then add in some redundancy for the whole variety of things.

And nobody taught me that. And I had to learn that the hard way. And in fact, I didn't even learn it the hard way it was hearing it somewhere for the first time that made me think, oh, okay, I need to do that more. I didn't even figure it out for myself. I had to hear it from somebody. And then I did start to do that and that might have led to increased rates, or just more thought about the way I was carrying out my tasks.

But you have to think that a significant proportion of the time is not going to be spent actually building websites. That's very often.

[00:11:43] David Waumlsey: Yeah. Trolling people on Facebook.

[00:11:46] Nathan Wrigley: Yeah. Goodness knows yet. How much time do we lose to social media that has to be factored in. And I don't mean you obviously have that in as a business expense, but there will be a bit of that.

There'll be some legitimate outreach on social media and so on and so forth. The the thing about my model is really easy to understand in that you essentially, I'm going to be proposing a website and I'm going to give you a number at the end of my thinking about it. I'm going to come to my client, Mrs.

A this lawyer and say, here's the figure. This is X number of dollars or pounds, and that's going to encompass everything. Now, maybe there's some wiggle room there, or maybe I add in some things, we might talk about that later, but I'm going to do that. The w which is easy, it's really easy to understand.

It's very easy to get ahold of, but the problems that come into that multiple on one of them is simply, you can be wiped out by a competitor coming in and just offering a small amount less. So all of this hard work that you've put into the proposal let's say it's 5,000 pounds. Somebody just needs to come in at 4,500, who is, equal to you, shall we say?

And mostly that's you out of the game, and it's going to be difficult for you to alter your pricing just because somebody else has gone cheaper. And again, we'll get into that, but it is easy to be out-priced if you go for that model and just offer one price, you've got to work really hard on the front end.

Making sure that there's something magical about your proposal. There's something which makes you unmissable, the opportunity to work with you is so great that 5,000 will eclipse the 4,500, because you can guarantee somebody at some point is going to beat you on price. And actually I think price more recently has become even more competitive, with things like page builders.

And dare I say it, people who are younger than me who have different setups in their lives, they might not have a family. They might not yet have the kind of commitments that I have. They may be legitimately have a lesser number for the year that they need to work with so they can legitimately beat me on price.

And so you've got to work hard to overcome that. Yeah.

[00:14:06] David Waumlsey: It's interesting. When we were talking about price, what, you we've got our first job coming up and with having to think about how we might price it would, we there'll be a few things. Well, the location and what we think would be the expectations of the target audience.

Are they going go, come into it? It must location. Definitely as worldwide obviously has an impact on what you're likely to charge where I'm presently living in India. The costs are probably a quarter of what your costs will be Nathan, or certainly what my work in London. So if I wanted local people that would change things, but it's also a sort of.

We know this is a lawyer. We know that they charge well for their services. Would that have an impact, do you think on the pricing that you might present to that person? Do you

[00:14:52] Nathan Wrigley: know? Think inevitably would, if you were in an industry where it was obviously very, the margins were very tied to, I can't summon anything to mind at the moment, an industry which has traditionally hard up, there's very little money floating about, I'm sure you can identify one in your head.

Think of that industry. It is going to make a difference where typically lawyers have a reputation for being. Well-paid there, they're very overworked. They're very keen to, taking new work, get new leads because there's a lot of churn, I think, in legal work. And they're very likely to have a kind of professional, shall we say a kind of regimented approach to doing things, their lawyers and this, I think would all feed into the price.

I would imagine subliminally or otherwise you are going to be earning on the side of a larger fee than a smaller fee. That might not be the case for you, perhaps you are not thinking about it in the same way, but I think I would be more happy to submit a larger fee to a lawyer than I would to X industry where the profits are significantly.

[00:16:02] David Waumlsey: Yeah, I think we'll in the next episode, we'll talk about scoping. So I don't want to wander too much in there, but sometimes people come initially with some basic brief and ask you, the first email could just be literally you know, looking for a website for this, small website. How much do you get that?

[00:16:19] Nathan Wrigley: I have had that lots of times. And I, my always my reaction to that is can we get on. My, one of the things that I find works for me is literally speaking to people, in the same way that you and I are talking, if possible, I will go to where they are, because I find that is even more effective.

I feel that once you've made a physical, once you've been in their physical presence, you get the impression as to whether you're going to click or not. There's been times where I've gone to somebody's office and it's been very obvious as I've left the door that actually do you know what?

We're just not compatible something weird, went on there and I didn't get a good vibe and the opposite is true. And so that's what I do. And then I try to, I desperately try to say, to get some indication of what the budget is, and it might be as blunt as what's your budget. But it might be more of, have you had a website before?

Can you remember what that costs, just to get some sort of, and also you'll get an idea of the surroundings. If they're in a big swanky office, max lying around on used all over the place and people seemingly busy industrious and so on. You're going to get an idea of where they're going to be positioning themselves as well.

But yeah, I always want to know what their budget is.

[00:17:39] David Waumlsey: Yeah. Do you know what I was thinking about that recently? I've always tried to do the same thing. I've never got it out to people with the budget. And I realized, because it's, we were talking earlier about, this is this sort of BS thing that we all go through where they pretend to know what it is that they really want.

And we pretend to know that we can deliver whatever they've imagined they want. And we just in our sizing each other up aren't we all the way through it. So it's never in the client's interest to want to reveal that, but to where

[00:18:11] Nathan Wrigley: no. So it's interesting because there's, there are all sorts of ways that you can make this a little bit easier.

Obviously it requires honesty, but one of the things that I learned. Many years ago was in the, the lead generating forms. So there's a form on the website and, your people are inquiring about a website. You make that form slightly more robust and complicated than it ought to be.

And the process there is simply that anybody that sticks and gets through that form is probably more interested than somebody who got through a form, which literally said, would you like a website? Yes. Tell us about the kind of website, there's two fields. Mine's probably got 15 fields to get through.

And one of them is it's not D it's not exactly asking what the budget is, but basically saying, do you imagine spending this, all this and increasingly yeah. Pricey. And I think people at that point, because they're filling in a form and they've made a bit of an effort there, it tends to be on the lower side, but still, yeah.

Occasionally you get one drop through where it's on the higher side and you think, okay, that's interesting. They're realistic. They know things might cost that much. This is probably one that I want to be following up very carefully.

[00:19:27] David Waumlsey: Yeah. I, it's an interesting way of qualifying clients, as well as the word here.

Cause you, you set the low end of what you're prepared to work with someone at. So you already led them into some idea of the range of prices you're working. So that does take some of that out of it. I, I don't, I guess we all do that to some degree. Should we talk a bit about pricing models, which really strictly think is only to fixed fee and value pricing and fixed fee being the more traditional one where you have a service and you cost out.

You know what you need, how much things cost and to make it what you need to get in profit. And that you set your price and then that delivers value to someone who buys it effectively like a client where the value pricing has that turned on its head, where you start with the client, find out what they are all about, what gives them value, what will add value to them.

Then you work out your price and then you do your kind of cost in and your service. So it's flipped on its head, the whole model. So

[00:20:34] Nathan Wrigley: can I this question at this point, which one of those instinctively do you like.

[00:20:41] David Waumlsey: Yeah, fixed fee. Yeah. It's the only one for my model. I think I can probably get away with any way.

And it's the only one I've known, but yeah. I think value pricing though is interesting. Yes.

[00:20:55] Nathan Wrigley: Yeah. But it's curious because I'm the same, there's something about the stability of the fixed fee and the predictability of the fixed fee. And essentially it's a binary thing. It's either a yes or a no, isn't it.

You just get this. Yes. At the end and you know where you are with that. And it's once you've done it, a number of times, it's easier to figure out how to generate that fixed fee and work out what the costings are, and if if a complicated build comes through you, you spend more time on it, you work it out and the number is higher.

And if a simple bill comes through, what you've, I know that in this scenario, you haven't done that yet, but you would have to work out how many hours you think it's going to take based upon your experience and so on and so forth. So easier for me to manage. And it just works with the way my brain works.

Yeah,

[00:21:43] David Waumlsey: it feels more honest and that's why I like it. But the interesting thing is, and really we are in an industry which is right for the value price and isn't it. And I would imagine most of the courses out there that show you how you can sell your web design services will favor the value price it.

And, and, and it's ideal because we do need to talk to the client first and work out what is going to be a value to the custom product that we are delivering to them. It makes sense for it to be that way round. And it does allow you then to find out what they're willing to pay and what solutions you're going to provide.

So it has all, it has a lot of alert to it and it makes a lot of sense of why some people are very passionate. That's the only way you should do it. That the standard thing isn't it, that you shouldn't be trading your time for dollars, and you should be.

[00:22:37] Nathan Wrigley: Yeah. Yeah. Do you think value pricing if slightly bizarre question, but do you think value pricing requires a kind of salesman like personality more than the fixed pricing does in that?

Can, you can put the fixed pricing down on a piece of paper and literally put it in the post or send it through email and somebody can read through it and you don't really have to have a, I don't know, I'm struggling to get the words here, but do you know what I mean? There's this sort of salesmen, like quality to being able to persuade somebody because I imagine it's very unlikely at the beginning.

A client is going to see. The value pricing for themselves, you are going to have to spell it out to them. You're going to have to go through all the hoops of, okay. So if we achieve this thing, imagine what could happen to your business as a result of us adding this to your website. If we could get you 15 more leads a week, imagine what that would lead to to your business's bottom line.

You've got to be good at selling what you haven't already, what they haven't already gotten their business. And I think that is maybe why it, why I run scared of it a bit. Yeah.

[00:23:48] David Waumlsey: Mean, you you've got to be a salesperson, but also in a way you're going to ask, you've got to ask them some fairly intimate questions about their business and what they projected, which they might not expect.

They're doing, for a lot of people they're just coming in. Somebody who can build me a website, that's their job. I don't want them involved in my business. That's what I'm employing them to do. I'm looking for someone to hire, to do that job. And in order to do the value pricing you've got to start asking them some questions about the pain points in their business and what you might be able to solve for them to make that kind of work.

And I know some people who have I've got all the scripts, who've been on courses. We've got a mutual friend of house who really fell foul, foul to this because they were such a fan of what they learned. And they were going to apply this value price. And they had the script, how they were going to ask certain questions to their clients and work out how they'll take it from there and to find out what would be a value for them, but with their people that they were going for, they completely knew that they were being sold stuff and they blocked him.

They just said, what would add value? Nothing. I, do you want more customers from we don't need customers from our website. It just needs to be there. And they, they were, they just knew. Been done to them and they weren't having it.

[00:25:00] Nathan Wrigley: Okay. So first thing to say, being the cynical Yorkshireman that I am.

If I, if I feel a tiny bit that I'm being upsold things and I didn't ask for it, there is a, there is some part of me which goes, no, just stop now. It's like when you get to the till or something and somebody tries to, do you want this with that? Or, you're in a fast food joint and they try to upgrade what you want to eat.

But in my head I'm like no, no, no. I've just told you what I want to get. Can I just, please, may I have that you know, do you want fries with that kind of mentality? There is, I think you have to be good at combating that. And as you said, the person that we both know, it was obviously a struggle to, to persuade people of that.

Now maybe you'll be really good at that. I don't think I am. So I stay away from it. Maybe you are brilliant. And I have met people, nothing to do with website building. I have met people. I'm sure you have as well, who literally could sell anything to anybody. They are just gifted with that. And I think if you are gifted in that way and you are good at figuring out what a business would benefit from having, and you can explain that and make them excited about it.

You you are, you are obligated to use value pricing because you'll do so much better.

[00:26:19] David Waumlsey: And I also think in those people, Great successes with it and really believe in it. I think they have to spend a lot more time picking out the type of person they're going to attempt to do that on the client that they're looking for, the ideal one, establish some kind of relationship with them.

So they trust them enough to be able to ask those big questions about the business and their pain points to want to answer them. And I think that's all quite a bit of work. So you might get a really, you might get paid a lot more, as a lot of these courses run, you're getting talking about 20, 30 K on your jobs instead of getting, a thousand or something on it, because you've asked the right questions and that may well be true, but I think there's also, you need to be in a position and I don't think I've ever been in that position where the people who've come to me for.

I want a website. How much is it going to cost me? I'm not going to be able to turn up. Tell me about the pain points in your business for.

[00:27:14] Nathan Wrigley: Yeah. And that also, comes down to knowing the niche as well. If, if like me, you're just building websites for more or less anybody, then there, there isn't really a niche, but if I'd done, I don't know, 15 lawyer websites, then maybe there's things that I've learned on that journey that are really going to help them something, some little tweak that could be made, which genuinely will be of interest and use to them.

Yeah. Maybe that's possible. You never know. You might have been a lawyer yourself and know that kind of thing inside out. And you've turned to doing website design and you can speak to their pains and you can make them understand that these pains can go away and the internet can help with that. Then makes.

[00:28:00] David Waumlsey: I think, the one thing that the value pricing does add to at least, even though I'm not going to use it. I know that because it's not going to work for me. I take some of it from it because they often start with some very interesting points. One that you've mentioned, we don't know the price of anything.

Nobody does. It's all something that we just look at other information that we think that must be it, but we're unsure. And you're certainly unsure with something that you're asking to be custom made for you. You know, that's the one thing and get into the fact that actually it's not the product they want to buy a set price.

It is somehow they want to get something from it in some form or another. So I think it, even if you go fixed fee, eventually I think the. That comes out of thinking about value pricing is really useful, but I think it can go wrong. Can I just say I think please, because I think it can often lead people to say, okay, I'll put all my efforts into being a good sales person who finds the right target, asks all the right questions, and then I can set this really high price.

But I think sometimes what's not mentioned in people who teach you to sell stuff is that you've got to deliver it. And if you've got somebody who's got the budget to pay 30 K, they may expect you to be something you're not like Wizkid on coding and developing where you actually, somebody like we are implementers of WordPress solutions,

[00:29:17] Nathan Wrigley: yeah. That's a really good point. If you go in at a really high price, then the expectation is going to be that. Capable of doing things that, that high price would merit. And you, I know you've got a lot to say on this because of the nature of the way that your business works you're quite forthright and honest about this, right?

At the outset. Aren't you, you, you explain, and many people I think will find this counter-intuitive, you explain your limitations right. At the outset, don't you? I imagine most people would say, don't talk about what you are unable to do. That's business suicide, but you do,

[00:29:57] David Waumlsey: I think. Yeah.

And I think there's an instinct for it. It's partly because it's going with this agile approach where the idea is to collaborate closely with the person you're working with. So in some ways you can't do that BS stuff on them. I'm not going to take it away for greed. They're going to work with me and they're going to see how much and work is a part of that's there.

Cause they're going to know me better because of the model I've picked. But also I think. The problem is with that industry, not many people trust web designers, do they? And I think almost that we have to go the other way and just say, you know, I'm brave enough to say, I don't know, stuff

[00:30:34] Nathan Wrigley: you're out at your shoring yourself up though, nicely for future possible problems.

Obviously your budget is you're dealing with smaller budget businesses and smaller budget projects. And so explaining from the outset, I am a WordPress, WordPress implementer. I'm going to be using a bunch of plugins. I didn't build the plugins, but but I can use them. And the functionality that they come with is what we will have anything beyond the scope of that.

Really you don't want to be using me if you want everything to be custom built. Not only is your budget ridiculous for that, but also I just won't be able to provide that. You'll need to look elsewhere. And I think you, you prevent down the road, all sorts of problems occurring with people wanting to.

The, the scope of everything bigger and bigger.

[00:31:24] David Waumlsey: We've talked about this. We've both done it ever, which some degree where we've kind of BS our way through to a job that we can do and then have sleepless nights. Cause we're not quite sure because we may be when we started with it, that what they said, we go, oh yeah, I know there's a plugin for that.

And then suddenly they want that plugin to behave differently and we can't re code it. Yeah. So

[00:31:45] Nathan Wrigley: Let's do well on that point for a minute because when we're trying to play the part of person who is doing this for the first time, and this is your first customer you probably will be plagued by this.

There will probably be bits where you are thinking to yourself, Oh, my goodness. Me they've asked me for something I've never done it. I don't even know how to do that. I guess you've got to come up with tactics as a way of just at least for now, not over promising getting yourself out of the room and going and seeing if you can actually do it.

I think that probably the worst thing that you could do is say, yeah, oh yeah. That's a piece of cake. I can easily do that. And like you said, David, both you and I have done that. And you re you regret it because it'll come back to haunt you. I think a good tactic is to, if let's say you're in the room with them, you just write it down as a line item and you've got to come up with some language which you're comfortable with, but something along the lines of, okay.

That's an interesting idea. We'll I'll certainly look into that. I'll see what I can do about that. And I'll come back to you in a few days, time, is that.

[00:32:52] David Waumlsey: I've, you with this, a client that I'm still doing a project with where this is the seventh project I've actually done for them, but it's another sort of division that a lead in it.

And I'd been saying, and I'm so pleased I have from the beginning that look, I'm just an implementer and I've got some skills I'm pretty good with the CSS and stuff like JavaScript that you might want on there. Not so much if it needs to do multiple things at the same time I'm out. And I'm so pleased I've done it because they've, the brief has changed so much from what I, because when they asked me first, can I do that?

And I said, yes, no problem. But we're now on something like the third. Integration where it's completely different in its functionality. And I'm so pleased. I set it up where I said, this is my limits, and you're quite welcome all while can hire somebody in who can do this stuff, because it would have been so awkward.

[00:33:43] Nathan Wrigley: Yeah. I guess the opposite may be true though. You might be a really dynamic quick learner. Somebody that can turn your attention to something brand new and within a short space of time, you can figure it out. You may, you may be brilliant at acquiring new things and figuring new things out.

And, you've got plenty of time in your life to spend evenings working through the code and all of that kind of stuff. And so discount that, if you feel that you can do it and it is within your reach and history has shown that you can rise to all these challenges. Then I guess you go for it.

But yeah, it was never me. I was always more on the sort of cautious, not trying, not to over promise occasionally over promising and regretting it. So I guess you've got to figure out where that, where it lies. Yeah.

[00:34:29] David Waumlsey: A lot of people love this job because those challenges will come in and then they'll just have to, write up, write it out and work it out.

And that's what they love about it. Teachers are. And in fact, the first jobs I did where I didn't make it clear my limitations, they did help me. They did stretch me to learn more.

[00:34:47] Nathan Wrigley: That is a really good point. And it is one of the reasons why this job is so interesting because you are learning stuff.

And if you only ever did things that you'd already done. I think you would come to resent the job fairly quickly because it would be fairly boring and straightforward. So yes, there's gotta be a certain amount of learning. And I guess if you're doing this for the first time, more or less, everything will be learning.

You've probably just got to get yourself out of that conversation out of the room and just figure out where the boundaries of what you can cope with are, somebody literally comes to you. If our client, our lawyer client comes to you and says, I want a bespoke CMS written in react that is going to come in on the $2,000 and, it needs this feature and that feature.

Yeah, maybe that's too much, but if it's just, I want a website with a few forms and perhaps some sort of, I don't know, some sort of live video component or something weird like that, then maybe all of that's doable for you and a bit beyond reach. Cause you haven't done it, but it's not totally beyond reach.

Yeah. I

[00:35:53] David Waumlsey: mean, when it comes to pricing them. Feature and this isn't just the job that's happening. So a fixed fee for that, but they'll also be really what I'm hoping to get, which is the care and the hosting to come out of them and this long-term relationship. So that's partly why the honesty needs to be there in the front, because I just want them to stick with me and keep paying me some small amount for years in the future without really disturbing me too much, which is how it's, how the business is still enjoyable for me because that's what's happened, so yeah, I

[00:36:24] Nathan Wrigley: think with your ad site, sorry, I was just gonna ask your agile hat on you're going to go with the fixed pricing, right?

[00:36:31] David Waumlsey: Yeah. I'm going to, because for anyone who didn't catch it before the agile stuff, the, the idea is that you're iteratively working. So I would be probably go into our lawyers saying, let's get your website up pretty quickly with it.

Doesn't have to be perfect. We'll get it up. And. Getting new customers. You know, rather than long project spending our time, we'll do it very cheaply. We'll get it out and then we'll come back over it, work together and we'll make it better over the time because neither, I know really what we'll want.

We'll learn from doing it. That's the argument. So that's yeah. Effectively what I forgot what the question was.

[00:37:07] Nathan Wrigley: It was just whether the agile binds to fix pricing better in your head. Yeah.

[00:37:12] David Waumlsey: Yeah, so that was where I was going with it. So effectively I will quote for a space. They would call in agile if you're using the scrum method, which is a sprint of work.

So something done within about two to four weeks at maximum something that is clearly focused on getting just some of the things that they want up and running. So basic site where there's a contact form might be all that they need. But, for, we know this lawyer might need all sorts of extra stuff I don't know, membership area or something like that. Yeah.

[00:37:42] Nathan Wrigley: Their sites. Yeah, I think, I think my model, my my waterfall model would actually work with the with the value pricing. I think it totally could work because, you're talking to the more you are. You're really trying to.

Everything that could possibly be done so that you can give them the website and hand it over on the final day. So there'll be a lot of toing and froing and backwards and forwarding. And maybe in that process, all sorts of things out where you think actually, do you know what, from everything that you've told me, I can see ways to improve this.

I could see, I can see things that you've missed out. I can see things that, that you didn't, that you as the client never thought of. So I think my system, my waterfall model could work with value pricing. It is just to say that I don't ever do it. I'd never seem to get into those conversations because I think personally I need the clarity, but I totally think that it could be.

[00:38:45] David Waumlsey: And it's really the only one that you can do for, but from an agile perspective, it has a failure because it assumes that you can agree upfront what is expected as an end deliverable and set a price on that where the agile model is going for the fact that you don't know. And I don't know. And the only way we're going to learn is by doing so let's start with something low cost, minimal risk, small periods of time.

We work together or work out what it is and that list of things that you might want for your site might change over time as we start and do it. And that's okay. Yeah, but for my perspective, I can't value price. It really very easy because they're going to see the work I'm doing. So I'll give a fixed price for a number of hours, if you like.

So I've not really adapt, I mean, this is my learning process, so I'm still learning to do our job, but effectively I've gone that way. But because I've set up these kind of billable days, if you like, which have got a deadline where we. Quickly to produce something and then you book another one and then book another one.

So almost by accident, I've gone the agile approach without knowing there was a real movement out there. Yeah. Yeah.

[00:39:53] Nathan Wrigley: Okay. Yeah. That's interesting.

[00:39:56] David Waumlsey: It can we just want the, I just want to go back to one thing I made as a note, we skipped over it, and I think it's quite important with the pricing when you were doing fix well, either of them.

It's the fact that the example would be for me is that I started building a poxy little internet with WordPress as an employee in my workplace. And it took off with my group because they didn't, they weren't connected to the mainframe with the organization and it would have cost me if I was charging myself for the weekend work, I did, it would be about 500 pounds or something.

They decided to build it as part of the civil service who I worked for and in meetings alone to get all the stakeholders involved in that it must have been eight to 10. K of meetings alone without the actual build. So I think that's one thing we don't probably don't need to have to worry with our miss a who were trying to bid from, cause it's probably likely to be hurt, but all we net form, we know she might have a team that we need to report to as well in this.

And that's gonna really change our price in this. Yeah. That's

[00:41:00] Nathan Wrigley: a good point. The, you it's, I always say that I want to deal with one person, but in the background of that one person, in our case, we've got this Misael, so we know it's one person it's probably relatively straightforward, but you never know how many stakeholders there are.

And so each time that you go backwards and forwards, a decision needs to be made, it might be literally the decision process might be costing the business hundreds of dollars because it's, the, the, the wasted time in emails or the board, the meeting that has to happen to to make a decision about that one particular thing.

So that's a really good one.

[00:41:35] David Waumlsey: Yeah think, winning the 30 K job that people who can pay that amount of money, you, I bet 20 K of that has gotten in really trying to get everybody on board and all the meetings. And yes,

[00:41:47] Nathan Wrigley: it goes on it because from our end, we're only seeing the 30 K that comes to us.

Whereas from their end you that website might cost them 60 grand and their accounting department will know that it costs 60 grand because they'll be counting all the meetings up and figuring out, whose time was spent, where, and yeah. And also, if you think about the, our, the co the cost per hour ratio of some careers, lawyers, that's going to quickly add up if they're not doing it lawyering and they're spending time in.

[00:42:18] David Waumlsey: Yeah. I mean, your model is good, cause you can do the value prices. Should you choose to, and to some degree, I guess you do. I, I can't so much because I've fixed rated and made it obvious what my sprints cost, if you like so effectively, I've given away my hourly rates. So a lot of people would be touching at me for doing it, but it matches my model, but you still effectively can value price.

And to some degree you will do that as we talked about before, once you go see the lawyer and she's got nice plush offices and stuff like that.

[00:42:49] Nathan Wrigley: Yeah. It is more value pricing based upon what I think they can afford as opposed to what I think I can deliver to them in terms of how I will grow their business.

Do you know what I mean? It's a fairly blunt division there, but if I really work out that this particular client is. In incredibly wealthy and ostentatious with it. I think it's quite likely the number will be a little bit higher. Is that reasonable? That seems like human nature.

Maybe I'm just being greedy.

[00:43:20] David Waumlsey: No, no. I think it is. And also, this is the key thing about the value, the value of one lead to your lawyer might be much higher than the lead to my plumber. That's right.

[00:43:32] Nathan Wrigley: Yeah, that is right. That's a good point, but yeah. Okay. Yeah. So

[00:43:38] David Waumlsey: I think we're coming to the end.

We can just talk a little bit about pricing tactics that are available. Just we don't really use many of these, but discounting.

[00:43:46] Nathan Wrigley: Yeah, I G w when you say discounting, are you meaning that you backpack. On a price that you previously offered. Do you mean that, or are you literally just saying, you if you get this, and this, if you combine all of these four different things that we're offering, we'll knock 10% off the overall price, or are you saying, okay, if the client pushes back, you just knock 10% off to make them happy and we're off to the races.

[00:44:13] David Waumlsey: To be honest, I'll just write the word. I do

[00:44:19] Nathan Wrigley: think real-world example that I told you a minute ago. I think. Not a good idea to just suddenly slash the price of what you've proposed because of let's say client pushback. And in my real world example, I had a decorator common quote for me and I'm going to make some numbers up, but let's say that they quoted 5,000 pounds to do some decorating work in my house.

I then had another decorator come and honestly, they both sounded reasonable and they showed me the kind of things that they could do. I had every belief that they could both pull it off and they quoted 2000 pounds. So I went back to the first one at 5,000 and said, look, I can't go with you because because I found it a much cheaper quote, thanks very much.

And sort interrupted and said, how much was the was the other quote? And I said it was 2000. And they said, okay, I'll do it for 1800 instantly set those words. And at that moment, I was like, What you've literally just knocked off 3000 pounds because I said some words that immediately, I didn't want him to come and do the work for me because I felt like he was defrauding me.

Do you know what I mean?

[00:45:33] David Waumlsey: Yeah. Oh, I know exactly. Maybe from their perspective, he's going to lose the job anyway. So why not just try this last

[00:45:40] Nathan Wrigley: thing but in my head that I, my I don't mean estimation. I didn't lose any estimation for him. Cause obviously, he was keen to get the work, but it, you know, 30 seconds before he was saying it's 5,000 few seconds later, it was it's 1800 that the Gulf was so huge that it, it pulled me up short, it, it was so huge.

So maybe if the other guy had come in at four and a half and he'd said 4,200, that felt more palatable. So when I'm saying this, what I mean is don't discount yourself out of credibility.

[00:46:18] David Waumlsey: Yes. I agree. I don't think that can work. Actually. I could have combined this with another note that we've got here about putting up kind of fake high prices, so you can discount them all the time.

Like the endless DFS furniture sale we have in the UK. And we know a lot of products as well out there on a WordPress as well. It would constantly you go to their site and they've got it automated that there's a sale running all the time. Discounting with the service does can ever work a discount.

[00:46:46] Nathan Wrigley: I do.

You know what? I'm sure it works because it's deployed in every kind of commerce. It must work. I guess you've just got to be realistic about it. Is it a real discount or is it some sort of fake discount? If it's a fake discount, at some point somebody's going to call you out for it, will the collateral damage of getting called out for it?

Will it hurt your business? I don't know, but if, if you've got millions of customers, probably not, but if you've just got one or two and you live in a little local place, like I do, that could be catastrophic.

[00:47:19] David Waumlsey: Yeah. I guess you've got to give a reason if you're going to discount your service, where effectively the hoping that you've costed, what you think is your reasonable profit and your costs and your time to come up with this price.

If you discount, it always seems a little bit fake anyway, doesn't it? Because which of these is, has given way. You would need to maybe justify it. Like you were balancing out a, I don't know a low sales time in the year or something like that when you're not so busy. So you do a little discount, someone, I think to make it creditable for a service, not a product you would need to add some other element in that would make sense.

To the

deal.

[00:47:57] Nathan Wrigley: Yeah, I do the model of discounting, the more you, the more they spend, if you know what to mean. So let's say there are four components to this website and they could only get the website going with the first bit. So let's say that's a thousand pounds or something like that. And then there's this other thing which costs another 500 and another thing at 500 and another thing at 500, I would be quite happy to say, look, I can knock 250 quid off the last 500 because you go in all in those kinds of models feel like a good way of discounting.

Cause it's, it works in both ways. Your you're getting more work and you're working more closely with them, but at the same time they feel like you've done them with.

[00:48:39] David Waumlsey: Yeah, and actually, and it also makes sense, doesn't it? Because your business costs, which you have to factor in is the fact that you need to go and get work out there.

So if they keep you busy for longer than you can discount them, because you don't need to spend money on doing so much of that. So it it makes sense. Yeah. So discounts can work in your weight, loss leaders, things that supermarkets do when they put something at a loss to pull people into their supermarkets.

Yeah. Yeah. I literally

[00:49:05] Nathan Wrigley: can't afford to do that. You know, it absolutely will work. So by loss leader where, meaning, you, you, you put something on such a ridiculously cheap price that everybody flocks to your store and whilst they're there, it's inevitable that some of them will stray off and buy other things.

And that kind of idea I, I've never done lost leaders because my business is, kind of time for money model more than anything else. And so I don't, I wouldn't, I don't think.

[00:49:37] David Waumlsey: I I talked to you before about one situation where I did, because I'm low price anyway. One of our sessions will be about 500 grid, which is maybe about seven $50.

And that could build your website, but generally I want, two or three days to do it well, but there was somebody who I knew because I'd worked on another one of their sites. She just needed this personal site. They needed it to be out. They had one before it's fallen apart and they didn't want to spend the 500.

Cause they said, literally I don't need it to do anything for my business. It just needs to be up there. No one will go to it. And I said, okay you need to come in on a hosting and care plan and I cut it right down and we worked from a template and I think maybe the hours that I spent on it meant there was no profit in it at all.

But over the period of time, The hosted and care would made up for it. He doesn't contact us about anything. So you just keep paying each year for that.

[00:50:31] Nathan Wrigley: So that was more of an accidental loss leader, but it was. Yeah, but

[00:50:36] David Waumlsey: it just made me think that maybe I would do some of that in future a little bit more.

I might drop my prices when someone had a good reason for doing so. And I wasn't really making much on making it, but if they're coming in for the long-term on something that will make me money over the period, which is of course what the supermarkets are trying to do. Aren't they just trying to throw you in.

So you'll buy other stuff from them or just make them your supermarket or you'll make them there's your supermarket. So

[00:51:02] Nathan Wrigley: It isn't that the same thing as the thing I was mentioning a moment ago, whereas if they buy all four things, I guess you get one of them cheaper. Essentially you've done the math that haven't you and you've worked out.

The maths means you get more. So you're not really losing out there. Are you, it just seems like a slight different variation of a similar thing. I wonder if it is, I wonder if would you ever actually spend money to get a client in the hope that they would stick around? So you see that's where I'm imagining loss leader comes from.

I'm actually hemorrhaging money on the promise that something good will happen in the future. This client will stay on my care plan. For years and years, this client will come back and do a rebuild every two years or something like that. But in the meantime, I have actually lost money on the first thing.

I can't.

[00:51:58] David Waumlsey: I guess in this case I would have not met probably cause I guess we spent longer than we would have normally. So I lost my time rather than any actual payment for Scott else, which are lost on it. But, and again, it was still a gamble because you know, there's nothing that holds up person beyond the year on our care plan.

You know, there was still an element where it might've not been worth doing. You know, you have to go with a little bit of that. They probably will stay and they did well, I've

[00:52:26] Nathan Wrigley: had lost leaders, which I never intended to be lost leaders because just for the fact that, the man hours that were put in.

We're so much bigger than I anticipated and yeah, you just want those jobs to come to it. So unintentionally I've done loss liters. There's never, there was never a plan to have it happen that way.

[00:52:48] David Waumlsey: Another pricing technique, a tactic is the adding 97 to the end of any of the numbers

[00:52:55] Nathan Wrigley: that you give. This is so interesting, isn't it?

The psychology of putting a seven on the end or a few years ago, it was 99. I grew up in the era where everything was something pounds and 99 Pence. And I think it actually, on some level it works. I I've definitely done it and I I'm, I'm not trying to be clever about it. I just see everybody else doing and think everybody else is doing.

It was probably something in it. I don't know what the psychology there is, 97 really, to my mind, doesn't sound like. Sorry. I'm a hundred. I was thinking 47 there. Cause I know something that I've sold recently, which was 47 and it doesn't sound like 50. It, I think there's something in this.

[00:53:42] David Waumlsey: Yeah. And 47 is another one. Isn't it. If you were aiming for the one 50

[00:53:46] Nathan Wrigley: or so, they're going to product one for 7 97, 47, 2 4 7. I have to say though that my proposals more or less always end in a zero, it's just, 2000 to 1000 or whatever it might be. It just I don't, I haven't really played those games.

Not doing actual proposals, cause it just seems you know, they're not, they're probably actually gonna stare at this number quite a lot. And if it says 9, 9, 9, they're probably going to be gone. It's the.

[00:54:16] David Waumlsey: I am grounded. I rounded up all my numbers as well, even on the care plan where there's a table for these things, and it's something, they make their decision independent of anything I say, but I did this.

I have to thank Iceland. I don't know if I still end up around the world anyway, because I noticed that this is going back some time they slip from making things like their [email protected]ndtwowithno.zero zero. And for some reason that fooled me into thinking everything had got cheaper things that were a pound seemed suddenly cheaper than they were when they were 99.

I suddenly

[00:54:52] Nathan Wrigley: thought we should take this in the other direction. Shouldn't we? Everything should be 102 or something like that, just go over, round it up a bit. Yeah. Yeah, no, it's interesting. So. From the, sort of the packaging point of view on that. It's just easier to pass the it's two quid, as opposed to the 1 99.

And, and you can adopt if I get three of those at six quid, if I get three of those at 1 99, how much is that? That's 5 97 or something. I don't know. Yeah. I think it, I think there's something in this though. I think the fact that every single business seems to be doing it. I'd be curious if anybody knows if there's some sort of data to show that this is worth doing or not.

It would be honestly, I'd be interested to know in the comments

[00:55:38] David Waumlsey: and it's trickery though, isn't it? Because it used to be 99 and then it had to become 97. Cause everybody knew the 99, they automatically moved it up. So I think, it'll always have to change. Won't it? Like I say, with Iceland fully me suddenly by rounding it up, it seemed cheaper somehow.

So you're going to have to keep shifting, so I don't bother with it at all, but What about the last one we've got as a pricing tactic, which I think can only maybe not, apply to things like care plans where you provide various different options, usually three or something, and one is to balance it out.

So you put this very high price thing on knowing that will be a very small percentage of people that will always buy the top price thing. And that is so high that it makes the regular thing that most people buy look cheaper by

[00:56:25] Nathan Wrigley: comparison. Yeah. I guess the idea here is that let's say you've got three care plans or three methods of building websites you make the first.

Really cheap, but utterly useless. So if anybody buys that they immediately figure out there's just nothing in this, that, that, that table's only got three techs, then you put the opposite and you put something so crazy over price that basically nobody's going to buy it. And then you put the middle one, which is the one you actually want people to buy, which is a reasonable amount.

It's profitable for you. And it's the one you want to sell. Yeah. I've, I've tried this out. Do you know? What's interesting though. I never figured out that was what was going on until somebody explained it to me. I didn't independently figure out that's what those pricing tables were up to. I was naive and thought, okay, that's the cheap one.

That's the middle one. That's the more expensive one. They're all legit. It never occurred to me that there might be people out there who would use the first one on the last. To make the middle one seemed like the right one to choose.

[00:57:33] David Waumlsey: Yeah. Yeah. You've pointed out to me on some products where people have been quite clever to move it the other way to get the high price.

So software or something where you'll get you know, the price is quite close to the highest cost in the middle one. And you get, I don't know, a hundred license, but you get a thousand on the next one. It's just like for that small jump up for the number of extra licenses you get, you're always going to move up.

Even if you probably didn't think you were ever going to need that number of licenses, you just, yeah. And you pointed out a few of those

[00:58:07] Nathan Wrigley: thinking about that one is that usually that only seems to have two options as opposed to there being three options where you're squashing from both sides into the middle one is the one that you want to get in this situation.

You offer something which is totally reasonable for the first one, but then the second one is just outrageously good. For a little bit more money. And in this case, it's software licenses. You know, it's not like you're spending hours making more software because because you're giving away a thousand licenses as opposed to one or unlimited or whatever, it's exactly the same to you.

If you sell one, it's the same as selling a thousand, except there's more money in it. So I see. $97 for three site license. And then I see $197 for a thousand. And there is something in that which says there's a trip wire there for me and I fall over it all the time. I will buy very often the thousands.

'cause I just think to myself, oh, I can see myself going over the three quite easily. The reality is I'll never go over the three. I'm never going to use this on three sides, but there's something about it, which says to me, do you know what a thousand that's really generous? So I think that's a very effective, if you wouldn't want to do it as website builds, we'll build you a thousand websites.

That's why the price of two. No,

[00:59:34] David Waumlsey: I think there is a genuine model. Honestly, the person who, got me most of my business, my old colleague, when she started back in 2000 with our web building business, she had basically three plans, which was bronze, silver, and gold. And the feature it had feature sets.

It was how many numbers of pages you will have of be allowed to have. So you could, she could have easily used. Tactic as well there, she could have said you can have up to a thousand pages.

[01:00:00] Nathan Wrigley: I, something, I think though, that in the era that you, when I started building websites, I think that was a totally legitimate thing to do because you had to build every page, you really had to go in and create the HTML.

And whilst there might've been an element of copying and pasting, you had to build it, you have to actually go in and create the dot HTML page and start writing the mock up and all that. So there was actual work nowadays. It's, it's a CMS, you just log in and, create app new. And, I don't see that being all that effective nowadays.

In fact, I think clients would be what you're going to charge me for the extra one page. Are you kidding?

[01:00:42] David Waumlsey: Maybe. I think it still does exist. I'm sure. You're right. And, and, and you could argue the other way that it hasn't changed because, when you copied your HTML, you. You've got your homepage and then you've copied all the layout that you did and just alter some bits and then copied it.

You couldn't

[01:00:58] Nathan Wrigley: do multiple sites. So I think I misspoke there. Cause obviously if you're designing each page, then that's legit. But if it is literally CMS based pages where you are, they're writing text into a page and that's all it is, or maybe uploading an image or something. I see that as a bit more of a stretch.

Yeah. That's yeah. I think is that it are we done with. I think we are done.

[01:01:25] David Waumlsey: The only thing to say just with our different models is that you could try the tactics and I can't so easily again with this because of the models. So I think that's it. We've got just the last few questions to

[01:01:35] Nathan Wrigley: ask ourselves.

Sorry. I missed those on our show notes. There's five questions. Yeah. Okay. Let's go through these. Yeah.

[01:01:41] David Waumlsey: We can skip the first one, cause we already talked about it. Whether we're establishing a relationship is going to make a difference perhaps to our pricing and deliverable. So you could have, which I did a little bit in the first place and some businesses are probably running around that you can have.

Where you're priced too, to work quickly with a client. So we know the difficulty now is that a lot of people will, clients will come. They say to what a website, they know what it looks like. They don't know what it could do for their business. So if you want to get in and get out and get money off them quickly, you'll do maybe a one day build or very quickly and leave the complex stuff out that might come later.

So when they're not getting the traffic, they want it's okay, we delivered you the website, you didn't ask it that you wanted a SEO

[01:02:24] Nathan Wrigley: or blah, blah, blah. I think that's fine. If you, if you're willing to do that and they're willing to do that. So it's basically a really a cheaper version of a website because it's got hardly any fees.

[01:02:37] David Waumlsey: Yeah, exactly. You know, you're just giving them what they want, which is you know, still most of my clients don't really get the internet and what I might be able to do for their business. And all I want to do is, cause I want this long relationship is to, bombard them with this new information about what their website could do for them and they don't care.

So there's a legitimate model. And just saying, I'm going to give you what you want and that's the end of our relationship,

[01:03:00] Nathan Wrigley: Totally legit. If you've got space for that, then why not? You never know what might come of that.

[01:03:08] David Waumlsey: This is just a silly question. Do we have an amount which will go below or above?

Do we have a set one in our

[01:03:14] Nathan Wrigley: minds? I think there must be an amount that I won't go below. I don't know what that number is off the top of my head, but there has to be an amount because obviously, I'm not going to build you a website for four pounds. That's just not going to happen. So anecdotally there is a point at which I'm going to start thinking, do you know what this isn't going to work out an equally.

There is a point that I won't go above. Obviously if I knew that I could walk up to somebody and say this website with five pages, that's going to take me seven hours is 2 million pounds. And I knew they were going to pay it. Then no, there is no limit. I will accept that work for that fee.

But realistically, everybody knows that the expectation is going to go up beyond a certain amount. So if you're building a website at $30,000, those people are going to want $30,000 worth of value out of it. And they're going to be asking questions. It's probable that you'll need a team of some kind at that point.

So there definitely is a ceiling. What about you?

[01:04:21] David Waumlsey: Yeah, there is with me. My, you know, it's on my site, so you could see that really 500 is my kind of minimum 500 pounds. That is, so again, Islam, some $50 roughly. That's my minimum. And it's got a set number of hours that go with that sprint of work.

So that's anybody who comes in below that is basically out of my range, but that's pretty low, isn't it? Yeah. For somebody, to get started on the work and we possibly could deliver you a basic site for that. But as I say, I made that one exception and it makes me think I must question that though is potential because, but it also goes with another caveat with that one because they, I'm not interested in people who won't come on the care plan.

So that's one of the first things I put in place. So they have at least one year of that to pay. So in fact, no one ever really they're going to have to pay 800 really in effect because they have to pay for that upfront as well. So yeah, I have a below and like you, I guess to be honest, I wouldn't personally, I wouldn't be going above 10.

K. A lot of people will just go what really? I, cause I feel. As with my model. It's fine. I would do eventually over time if we're going through sprints of work. But if that was the initial yeah, I understand. I wouldn't go through that. You know, it's easy for someone to pay me that amount of money over the time that I'll be working with them.

That's not a deal, but I would feel uncomfortable at any, anybody who was expecting a website for that kind of money. I

[01:05:56] Nathan Wrigley: believe I know what they would want. I know what you mean. I think that the low price, the one you won't go below is basically what your business can't tolerate. You'd be better off spending that time looking for a different client.

And the high one is more based around what the market will bear. It's more like I can't charge that because literally nobody will pay it. Yeah. And I'm sure everybody in this line of work has had those questions. Should I send this proposal with that actual number? Really?

Is that number two? Yeah. Oh, you've sent it and it's backfired and you've probably sent a few and it's oh, it worked. Wow. Okay. What about this one? Do you have a price which you'd be happy to cut features out of? If the client comes back and says, no, that's too high.

[01:06:47] David Waumlsey: Nathan answered that one yourself.

Cause you talked about this

[01:06:50] Nathan Wrigley: earlier. So I think this is quite an, I wonder how many people have done this in your proposal? Have you ever put in things that, they will not need safe in the knowledge that you can cut that out later? So that you are able to bring down the price. I don't mean it's a bit like that pricing table that we spoke about earlier.

The third option, which nobody's going to pick has got loads of things in that nobody ever needs. That could be a tactic, I guess it, I find where we're straying into the realms here of being a bit disingenuous. In fact, being very disingenuous, but I have had clients who have come to me and they've had these very grand ideas of what their website wants to be.

And then you throw the cost back at them and they say, whoa, that's a lot of money. And then you say what about if we took that out, you'd still have a website and we could take that out. And it still works perfectly fine. And actually in most cases, I know that they don't need them anyway. So it's easy for me to pull those things out.

So yes, that kind of. I

[01:07:56] David Waumlsey: think that's a really good way of putting, you you'll give them the features if that's, they're going to pay the full price, but it does give you a route to be able to backtrack unlike, your decorator that's right. It gives you a way that legitimately say, okay, we can knock these things out or you may be can do them later.

[01:08:16] Nathan Wrigley: That, and it might be trifling little things. I don't know, you don't need a chat widget just yet, because you, haven't got a sales team organized. It'll just be you in the chat. We'll get in the way of your life and okay. Let's pull that out or whatever it might be. You don't need the membership area.

Now you don't have any leads. We can do that later. Yeah,

[01:08:37] David Waumlsey: I think that's really great. I hadn't really even thought about that before. It's not going to be appropriate for my model because I'm not doing propositions with mine, but I love the idea. Last one that we've got here really is do we ever give a low price and then upsell the ad-ons.

But we have. You know, in my case effectively, I do that because of the Kevin hosting has to come. So there is an upsell on the price of the website.

[01:09:02] Nathan Wrigley: Yeah. I think for me the answer would be basically, no, the number that I've got on that proposal is really the number. And whilst there might be Adam's, those ad-ons are literally that you are adding to the price.

It's not a question of me lowering the price and hoping that the add-ons comment, cause then I'm in a sticky situation, whereas they don't want any of the add-ons I'm then I am then cutting the price doing what we talked about earlier, literally lowering the price in order to get the word that the base price has to be something I can work with.

So yeah, it has to be something that if they accept. I'm happy with that, but yeah, you've written down things like, add on keyword research, maybe some extra testing or it could be some work around browsers that whole browser thing. Was it really an album in the day? Wasn't it? You could genuinely say and we'll test it in internet Explorer six.

And that was a legitimate thing to do nowadays. I feel like there's very little difference between all the browsers.

[01:10:03] David Waumlsey: Yeah. There are some things, it's still some things which are just kind of experiment. It'll all just be in Firefox and credible. Won't be in the other. So it could be a factor and just the testing of it as well, because there will be some different displays.

If the brown had just something very simple as filling out the forms, there were certain things that, you can't style with CSS directly at the moment. You know, you might. Want to work with that. So this stuff, which I don't think we get into, I guess there's one up sell that I have.

And it's because of my agile approach, the idea that I'm going to go to our client and going to say, we don't know where we start. Maybe we ought to start with. So the thing that I often want to do is keyword research with people. I want them to do that before we even start the site. So by seeing a small sprint and a minimal viable a website is what we're aiming for.

So it's low cost, but please, let's do the keyword research because for your thing, if we get that wrong, you're probably not going to get the visitors. And we all wasted our time for the rest. So in a way I do often start with that.

[01:11:04] Nathan Wrigley: Yeah, fair enough. If it works for you and you, but a genuine upsell, right?

It isn't, you're not cutting out the cost at the beginning. You are adding the cost on if they go for it. Yeah, yeah, yeah. I think that's yeah,

[01:11:16] David Waumlsey: exactly. We don't, we don't know what their cost is going to be with the agile approach. We know how much it's going to be to get the minimum site and then it's going to be entirely up to them.

How much they're going to spend on top of that. Yeah.

[01:11:25] Nathan Wrigley: So yeah. Yeah. Hey David, guess what? I think this is the longest episode we've ever done. No, I know we're at one roughly an hour and eight minutes. I, you know, I wonder if there's a single human being that's got to this point, I suspect the answer is no.

Yeah, pricing is done in our little business series, which is fabulous. So that was episode two of series one. Should we just quickly say what's going to be episode.

[01:11:54] David Waumlsey: Yes gets in a brief we'll just try being brief,

[01:11:59] Nathan Wrigley: get getting to be brief. Yeah. Okay. So scoping out the project product kind of thing.

Yeah. Okay. That's it. Perfect. All right. Thank you. I enjoyed that. Yeah,

[01:12:08] David Waumlsey: I enjoyed it too. Thanks,

[01:12:09] Nathan Wrigley: bye. I hope that you enjoyed that. There's always more to these debates than meets the eye. There's always a ton more, once you start exploring and getting into the weeds of it. So today we were talking about pricing, perhaps you agree with us or disagree with us, or think perhaps we miss something out either way.

If you want to add a comment, you can head over to WP Builds.com and search for episode 2, 5, 9, or go to WP Builds.com forward slash Facebook. That is our Facebook group. And you could do the same thing. Search for the thread for episode number 250. Like I said at the top of the show, we're taking a couple of weeks off.

I would hope that if you are also taking some time off, I would wish you a very happy holiday season. We will be back on the 6th of January in 2022. So stay safe for a couple of weeks and I will see you soon. I'm going to fade in some cheesy music and say, bye-bye for now.

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