I’m loving these posts!
On Monday, we talked about the surprise math of a dream vacation.
I say “surprising” because people put off these crazy, wild ideas for decades…even though you can break it down and actually get what you want surprisingly soon.
For example, what seems like a crazy vacation to Paris — including an awesome hotel and eating wherever you want — can sound like an impossible $10,000 trip.
Or…it can actually be a few short months of earning more money on the side. (I covered the math in Monday’s article.)
I know, I know.
The next question is, “where the hell do I earn more money?”
Today, I want to talk about 3 counterintuitive things I learned about earning more.
By the way, you won’t find many other people talking about this. It’s easier to talk about cutting back (which has its place), but fewer people, especially “experts,” can talk about earning more in a consistent, legitimate way.
They don’t know how.
I’ve made this a really meaty article so you can dig in. Enjoy!
INSIGHT #1: What’s simple to you is a big pain in the ass for someone else
When I was in college, I taught venture capitalists how to use Youtube and Myspace. And I got paid for it!!
Notice that I didn’t think of myself as a fancy consultant. Also, who the hell ever thought they could use YouTube…and get paid for it? To every college kid, YouTube/Myspace were no big deal, but these venture capitalists had no idea what they were or how to use them.
This is the funny part of earning more.
One of the first things we tell ourselves is, “What would anyone pay me for?”
Then we turn around and happily pay someone to change the oil in our car, clean our house, walk our dogs, repair a broken faucet, teach us how to dress better, build Powerpoint decks for us at work, teach us how to learn Spanish/accounting/teach our kids piano, and on and on.
We spend thousands of dollars a year on services that other people provide, yet we turn to ourselves and think we have nothing to offer!
- Maybe you’ve housetrained 6 dogs in your life.
- Maybe you love throwing really great birthday parties for kids
- Maybe you have a Pinterest addiction and now have the most organized kitchen of anyone you know
Each of those ideas could generate over $50,000/year for you.
These are all skills people will (and have) paid for.
Just this year I’ve paid people to:
- Pack my suitcase
- Return an item to the store
- Deliver a package
- Design a presentation
- Help me brainstorm an idea
- Teach me how to make cocktails
The point is, you don’t have to be a programmer or a designer to make money consulting. Just browse Craigslist in the “gigs” sections and you’ll find people are looking for all kinds of help:
By listing out your skills, strengths, and interests, you can come up with many ideas for making money on the side.
INSIGHT #2: Pricing cheaply doesn’t do your clients any favors
When we look at the math of how much you can earn on the side, what stands out?
For many of us, at least at first, the idea of making $50/hr seems lofty, let alone $100 or even $500 per hour.
When I first started consulting, I charged just $20/hr. And the truth is, a lot of people will pay you at that rate. But I quickly found that I didn’t want A LOT of clients. I wanted the RIGHT clients.
I discovered 2 surprising facts about charging low prices.
The lower my rate, the more people would try to haggle.
This was amazing to me, but true. Hundreds of my students have had this same experience.
Why is that? Logic would dictate that if you give clients a great rate, they’ll be less likely to balk at your price. But the truth is, when you price low, you attract customers that are looking for the lowest price, not the best value.
Have you ever held a garage sale? Try to sell a lamp for a dollar. You’ll have people negotiating with you. That same lamp in a high-end antique shop priced at $100 and no one would bat an eye.
People that want to pay less tend to be MORE work.
When I charged $20 for my consulting, these clients would not only argue the price, but they were also the most demanding, difficult customers to work with. Later, when I charged $2,000 per hour, these clients didn’t argue with my price and they were actually LESS stressful.
Clients that are paying a higher amount value your work and respect you more. They made a deliberate choice to invest in this service and they know your time and advice is worth it.
Think about people that want to get fit. Why are personal trainers that charge $500/month or more so much more successful than gyms like Planet Fitness. Yes, part of it is the personalized, 1-on-1 commitment. But also, $10/month is just not enough to motivate you to use their service. You’re not invested enough that it actually motivates you to go.
So, how do you get your clients invested enough to A) Pay higher prices and B) Be invested enough to value your services?
By asking them to invest in you first. The best way to find out if a client is serious is to give them some “prework.” This could be an application process, a survey, or an intake form.
This filters out the clients that aren’t ready to invest the time to work with you. If they don’t want to take the time now to fill out a simple survey, why would they take the time to follow your advice later?
Here’s a sample intake form from my Earn1K course:
INSIGHT #3: Clients are NOT paying you for your time
I’ve seen a lot of articles floating around that calculate “what’s your time worth?” as a way to determine your base rate.
This is a completely backwards way to look at pricing. Nobody cares that you think you’re worth $50 or even $20 per hour.
Nobody even really cares how long a project takes you.
If you tell me that you can build me a website in 2 weeks, does it matter to me that you spend every day from sun up to sundown working on it? Or if you spend a grand total of 10 hours?
No, I don’t care. You gave me the estimate, I’m ok with it, it doesn’t matter what happens in between if the RESULT is good.
If I pay you $5,000 for a project that brings in $20,000 in revenue, your hourly rate is irrelevant to me.
The only thing that’s relevant to me is the result.
And what we see as the result is not always what the client sees as a result.
Let me show you what I mean.
Beyond websites and cakes: finding what the customer REALLY wants
Let’s go back to the website example. If I hire you to design a website for me, I don’t actually care about the website.
I’m going say that again because it’s important. Your client doesn’t care about the website you make them.
What they care about is the result the website can get.
So as a web designer, the question you should be asking is WHY they want a website to begin with.
Is it for new leads? Or for credibility? Or so that customers can find directions to my store on Google? These are all very different results and if you create a beautiful site, but customers still aren’t finding my store, I’m not happy. You gave me a result, but the wrong result.
This works in any industry.
Say we have a cake business on the side and we specialize in Disney cakes for kids’ birthday parties. What’s the result? Some moms truly want a cake that tastes delicious. But some want a cake they can take a picture of and post on instagram or Pinterest. See how knowing the result our customer is after can dramatically change our approach?
Think of how easy it is to pitch a mom that’s desperate for that perfect Instagram photo of the party. Instead of wasting time giving samples and taste tests, you can show her what the cake and the display might look like.
This cake might taste awful but nobody cares
What would that woman pay for something like that?
In both these scenarios, our “hourly rate” is trivial if we can deliver on the result.
Here’s 7 sample questions to ask to discover the true result your client is after:
- How would you define quality?
- On a scale of 1-10, how satisfied were you with your last (vendor/consultant/etc.)? How could that have been changed that to a 10?
- What are your biggest sticking points right now? How have you been dealing with them?
- If we solved this problem, what would you do with that extra (time / resources / money / energy)?
- Of these ideas I’ve brought up, what do you like the most? What do you not like?
- What 3 specific things could we accomplish to meet this goal?
- Who else is involved in this decision?
Now it’s your turn. In the comments below, I want you to think of a time that you (or someone you know) paid someone for a service. Why did you pay for it? And what was the REAL result you were after?
- “My wife paid someone to clean my house. She wanted our house to look nice for the holidays. The REAL result was she wanted my mother to be impressed with her.”
- “My mom paid someone to tutor me when I was in high school. I had good grades, but she wanted me to have a leg-up in school. The REAL result is she wanted me to get into a good college.”
- “I paid someone to do my accounting. I wanted to make sure it was done accurately. The REAL result is it was taking too much time and I was tired of doing it. I wanted that time to spend on things I enjoyed.”
Leave a comment below with a surprising reason you paid for something.
P.S. A quick clarification: In Monday’s post, I noticed that we accidentally sent out an image that was not properly purchased. We’ve corrected that and I wanted to make sure you know that we take the intellectual property of artists seriously. Thanks!