Focus Client Communications on Value, Not Rate

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:: As a website developer and communications consultant in the competitive Bay Area, I must be ready to pitch my services at the drop of a hat. Over the years, I have honed my elevator speech and endlessly rehearsed talking to potential clients about their website and media needs. However, conversations invariably turn to that sticky question…“So, what’s your hourly fee?”

The best answer? A gracefully phrased, “Let’s focus on your real question.”

In my experience, clients are not actually asking for my hourly rate. What clients really want to know is an estimate of total project costs and value. It doesn’t matter if my time is $30 per hour, or $300 per hour — that number means nothing without knowing the estimated time for a project.

Think about the math. A thirty minute project at an rate of $200 per hour will cost $100. But a six hour project at a rate of $25 per hour will cost $150. Despite the lower hourly rate for the second project, the increase in time needed makes that project more expensive. For business owners deciding how to allocate their limited resources, knowing an hourly rate is therefore less important than knowing the final project cost:

Time Estimate x Hourly Rate = Project Cost

Although this formula is clear to me now, it has taken a long time to find a graceful way of reframing the hourly rate conversation.

My formal education focused on critical thinking and the social sciences — hello, Bachelors in Anthropology and Masters in Cultural Studies! While fascinating, these subjects did not prepare me for the business side of building a successful website company with a consulting base spread throughout the world. I learned to navigate projects and client communications by observing how other business owners managed relationships, adapting successful project strategies to my own circumstances.

At first, I made classic mistakes. Despite having years of experience in social media strategizing and website design, I priced my services wildly low. I compared myself to my peers in the field, ignoring our differences in circumstances. Despite my additional experience and customized client services, it initially felt unfair to price my hours higher than the wages of my peers. And of course, there was Imposter Syndrome — that old enemy of so many female professionals — lurking in the background…

In the end, it took a combination of factors for me to find a pricing formula that I believe in and communication tactics to focus on value, rather than simply rates. Many traditional business formulas, such as this one at NOLO, use a standard approach to determine an hourly rate. I quickly discovered that this formula was not realistic for my needs, and the suggested base rate was barely covering my costs…much less earning a profit! My hourly was just too low, and because I bill in increments, I was sometimes billing entire projects at significantly less than my hourly.

A different formula was better suited for my situation. But these formulas (and their many peers) pale in comparison to the real-life experience of asking clients for feedback about how my work had improved their businesses. With that information, I have been able to establish and best communicate the worth of my work.

Nowadays, when clients ask about my hourly rate, I reframe the conversation to discuss project requirements and deliverables. Rather than discussing an hourly fee that means nothing without the context of project needs, I offer a free consultation to discuss the project goals and specifics. With that information, I can estimate project requirements and provide clients with the information that is important for them — a realistic estimate of their project costs.

Elliot Olson is a web developer and communications strategist at Studio Anansi, where she consults for a variety of clients including local startups and international nonprofits. Based out of the Bay Area, Elliot is passionate about working with business owners to build beautiful websites, develop effective online communication plans, and manage personalized social media strategies.

Comments

  1. Great perspective, Elliot! Good guidelines for any sales situation, “reframe the conversation to discuss [the specifics behind their concerns].”

  2. Thank you, Ginger! And yes, that’s a valuable way to reframe the conversation for any sales situation.

  3. good site thanks for sharing

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