Several years ago, before I started this company, I had an urgent request from a customer of the company I was with at the time. Her site was down. Hard. It was either a full page of errors or a white PHP screen of death and she wanted my personal, out of support scope help.
I told her that I’d get her running for $120. The short of the story is that I either went into her
.htaccess file or her
wp-config.php file and fixed it. In 30 seconds. Done. Site up, customer clapping hands over the Internet 1s and 0s.
Then the guilt hit me. I just “took” $120 from a lady for something that took me 30 seconds to fix. That would be $14,400 per hour for 30 seconds of my life. I’ll never forget it.
I immediately e-mailed her a moment after telling her it was online again, thinking she was going to be pissed that she just spent $120 so quickly. I asked her if she wanted most of it back, like $100 of it.
No, I spent over an hour trying to fix it myself. I’m happy to pay that much for having my site back online, regardless of how much time it took you. It was worth $120 to me and I wish I’d asked you sooner so I could have that hour of my life and my site uptime back.
Your skills, whether it be physical or intellectual, are worth a certain amount regardless of how much time you spend using those skills.
Changing a lightbulb is a pretty simple task that anyone can do. Changing a lightbulb at the top of a 300′ tower on the edge of a 1000′ cliff will come with a hefty price tag. Get where I’m going with this? Skill — particularly the scarcity of it — directly influences the market price. It’s simple supply and demand. Certain skills take that to an extreme.
No one in their right mind is going to pay $14,400/hr for WordPress services, but they will pay $120 to get their site back online. So don’t settle for $1 for such a task.
Application as a solopreneur
I was encouraged by Brian Gardner of StudioPress to raise my hourly rates by 50% in 2011. He said it’d weed out the riff-raff and make my life easier. I was afraid I’d lose opportunities when people were pricing me out against others. It did. I lost opportunities. I’m glad, though, because it turns out those were probably clients I didn’t want to work with. I raised my rates again. Same thing happened: I got higher quality jobs and clients who didn’t complain or want more for nothing.
According to the 80/20 rule, 20% of your clients create 80% of your problems, extra work, and misery. It’s amazing how many things the 80/20 rule apply to. So, I took the 20% best clients and made them 80% of my work by raising my rates. I was many thousands of hours into using WordPress all day, every day and that made me more valuable than someone who uses a little of this and a little of that. They struggle where purists in one platform breeze through.
Stop there – kill your rates altogether
Now that you’ve raised your rates as you’ve learned more, kill them. Hourly rates hold you back. They make you an employee again, working time to get paid.
I attended my second WordCamp Orlando last weekend and heard a great presentation from Syed Balkhi of WPBeginner, someone I met at the first WordCamp Orlando in 2009. He was a surprise presentation on getting paid what you’re worth and a lot of his (pep) talk revolved around not posting an hourly rate and not charging by the hour.
Instead, charge by the task or project for what it’s worth when it’s done by you.
One of his more awesome points was when you give a project price and include a bunch of features, and the client comes back wanting to pull out features to save money. First, you should be selling benefits, not features. Second, it doesn’t really save money because you’re already in the mindset that your delivery of said project is worth X. Adding or removing little items isn’t going to move the needle unless it’s a qualified scope change.
I looked back over the past 3-6 months and it’s been pretty rare the number of times I’ve billed someone by the hour or fraction of an hour. When I did, it was often an arbitrary price the task or project was worth on the market. That price was then converted into time because they’re old school and were expecting an hourly price.
This week I killed my hourly rate. Have you killed yours? How is it going? Let’s talk below.