What is the Best Way to Bill Clients?

Learn how to bill clients in a way that’s easy for you, will reduce errors and provide the least amount of resistance for your clients to pay.

RAW TRANSCRIPT:

What is the Best Way to Bill Clients?

Hi, everyone, this is Mike Volkin, lead instructor of Freelancer masterclass and host of the freelancer school podcast. Today we’re going to be talking about what is the best way to build clients. There’s lots of ways to build clients. There’s actually five main ways. And we’re going to discuss each of those ways right now. So, first thing before we’ve talked about any of the ways to build client, we have to talk about the number one rule never undercut your pricing and never undercut your services, meaning don’t offer less quality service just because a client undercut your pricing, so never undercut Why do I say that? Well, there are lots of freelancers that undercut the majority of freelancers undercut their pricing, and they’ll even talk themselves out of pricing. I hear a lot of freelancers on Discovery calls, sometimes I sit in on them, and very often do I hear them quote a price and go well, you know what, I’ll even do it for this.

Come out if you like, you know, it’s like they just self negotiate themselves down. Don’t undercut your pricing because there’s no bottom to where you can go. There’s always someone who will offer lower, let those people offer a lower price you maintain your value in your integrity by offering a better price. So what are those ways to build a client? Well, the first way, the most obvious way is hourly. Okay? This is most common, especially with clients on Freelancer platforms like up work, right. So you browse through other freelancers and you see that they have an hourly rate. This is a terrible way to make a living. And I am just shocked at how prevalent it is. I never I don’t once I’ve never I very rarely bill hourly, I only do it when I’m trying to introduce myself to a potentially bigger project mostly all of my billing is recurring, which I will explain here in a minute. But hourly billing has many disadvantages. The easiest advantage is for the client to say

Okay, this person is worth this much per hour. But that leaves so many open unanswered questions for the client. How fast is this person worth per hour? How long will this take to complete? Most of the time clients think that they’re most of the time there’s a dichotomy between what clients think it takes to get a project done, and what it actually takes. So they might go into something, let’s just say it’s writing a blog thinking that it would take three hours to write. And you as a writer know, it’ll take seven, because you got to research the title, you got to format it, you gotta, you know, do recite references and all the stuff that the client ever thought of. So a lot of times when you’re you are talking about an hourly rate you and your clients are on different ends of the spectrum. And another thing is, is that, for example, when I hire writers, and I see two similar hourly rates, I don’t know how fast they’re going to work. In fact, I did this recently. I hired

writers to write very similar blog posts, same criteria, same length, same quality, same brand, everything. One of them delivered a perfectly fine article for in half the hours that another writer did. So even though their hourly rates were pretty much the same, ultimately, I got an end product for about half the price from one writer than I did from the other. So from my perspective as a client is a terrible indicator of work output. Try to avoid building a practice run hourly. The worst part about hourly from your perspective as a freelancer is that you are succumb to the amount of hours you can work in a day. Okay, and the reason that you want to become a freelancer is because you have the freedom to work the hours that you want and and get more per hour than you would say a corporate job or a salary job. And when you are working hourly, you are breaking all of those rules, you’re diminishing your chance for freedom and you’re diminishing your chance for the ability to scale. Okay.

Another way is fixed price. This is common for a lot of marketers like like myself. And sometimes I do this.

If you know the, what it’s going to cost in terms of resources and hours from you, you might just want to tell a client, listen, this is what it’s going to cost you forget about the hourly rate, instead of hiring me for eight hours at $50.

Then I’ll just charge you $400. Right? That way, a client will know the fixed price and what’s going to cost to get it from start to finish. Now, I do not recommend a beginner doing this unless you know exactly what it’s going to cost to get the project done, especially if you’ve done it before. And the reason for this is because of scope creep. scope creep allows a client to come in and say, Oh, I thought this was a part of the project or I thought you were going to do this as a part of your fixed price. When that wasn’t your intent at all. I just experienced this even though I had a very clear scope of work written down in a document. I was building out these Facebook ads for clients.

And they said, Oh, I thought you were going to build this landing page to the Facebook ads. I said, No, I’ve never mentioned landing pages. I never had it in the contract. I don’t know where you’re getting that from. And they got a little bit upset. But once I started reviewing all the correspondence, and they understand, but just going through that whole process with the client, reviewing correspondence going back and forth, that all took time, billable time away from me. So fixed price can be a little bit tricky. You really have to know what you’re doing. And you have to offer very templated niche service in order to be able to do this properly.

Another type of a way to build a client is value based, that’s when you talk to a client. And this is for experienced people only this when you talk to a client, and you know the value that you’re going to provide. And let’s just take a new website, for example, a lot of web developers do this. They say you know what, you can get a new website for $2,000. You know, I can design one, I can throw some coding up. It’ll be nice. It’ll be mobile optimized all that stuff, right. But then you can also approach them with the current

Why do you need a new website? And they might say, Well,

our website goes down quite a bit. It’s slow. And we know that the users don’t flow from homepage to checkout. Okay. And then you ask, Well, how much do you think that’s cost you in revenue? Well, we know for a fact that since our, our website has been kind of clunky lately, it’s cost us at least $20,000 a month in revenue. Okay? If you say, Well, how about I build these you for free or for nearly free, and I’m going to charge you, instead of $2,000. To build this website, I’m going to charge you 10,000. And here’s why. Because with my work, I’m going to guarantee that you’re going to get that 20,000 back in revenue within three months. And what I’m going to do in addition to looking at your website, I’m going to look at the stats, I’m going to look at the flow rate and analytics. I’m going to see where the users are getting stuck. I’m going to look at heat maps going to look at all that so I can you x out a proper wireframe, and then build your website from ground up rather than just taking direction from you and telling me this needs to be fixed that needs to be fixed. I’m going to look at what it took.

get to that point from where you’re at with 20,000 or more revenue per month, extra down to where you’re at now, and I’m going to fix all that now that’s going to included, it’s going to be more than just a website built out, it’s going to be a comprehensive website, overhaul and overview that’s value based when you’re giving the client the ability to understand the value that your services are going to proceed in terms of revenue numbers, and you can guarantee it or you don’t have to guarantee it. But that’s a very strong way to build out web development projects, marketing projects, anything where you can directly tie your work to revenue. Okay.

And then package base so this is common with the agency so a lot of times you’ll see a client will come to you say okay, I need some SEO work done well great. Okay, so I can do SEO work but I can also for the lesser or more of a price but a

a lesser holistic price because I know after you build out the SEO, you’re going to need some off page SEO right after I fixed the technical components of your your website for SEO, you’re gonna need some link building right that’s

That’s off page SEO. Well, I can throw that in there too, right? And then you’re also going to need some some email marketing, right? So if you have a team behind you, or if you yourself can do a wide range, a wide array of different

services, you might want to offer package based pricing because a lot of times clients have a need for many things, especially if those things are tied together. SEO is usually tied to some kind of web design. Web Design is usually tied to some kind of conversion optimization on the website. So all that stuff can be packaged together almost like a value meal at a restaurant, right? You go to a fast food restaurant you say okay, well I might I came in for hamburger, but those fries seem pretty appealing. I could see how that would make my meal more satisfying. Oh, I’m going to need something to wash it down with how about a coke You know? So that’s like a package you came in for hamburger and you want to with a hamburger fries and coke. Okay.

And the last thing is what I’m mostly doing is retainer based. That’s when

a company has an ongoing need. This is when you transition from Freelancer to consultants and

Just had a freelancer coach called me. She’s only been freelancing for a few years and she’s a freelancer coach, and she was trying to sell her freelancing services to me even though I had five times the experience she did. And she’s like, Oh, well, I work on retainer based projects. I’m like, okay, so you’re not a freelancer? She’s like, No, I’m a freelancer. I teach other freelancers how to do retainer base.

Most, every retainer based work is consulting based. And let me tell you the difference between freelancing and consulting because this Freelancer coach didn’t even know the difference between freelancing and consulting. a freelancer is someone who’s who does specific projects, okay. A consultant is someone who solves a problem for a client on an ongoing basis and works towards a goal. Okay, so freelancing is project based consulting is goal based. Now of course, there’s some gray area there, but that’s basically the gist of it. So I’m, I do most of my work on retainer base now. So I’m a consultant and a freelancer. So a retainer basis when a consultant or when a client comes in and say okay,

Please help me with my marketing. I need someone to lead a marketing department I need someone to help me manage a team. That’s an ongoing goal. And then so every 30 days I set goals that you know, what can I achieve? What does success look like in 30 days from now? Well, we need to do we need to hire two people here we need to increase the conversion optimization, we need to reduce the bounce rate, we need to get you some new revenue streams in that kind of stuff, that’s retainer base. And you can charge them a set monthly fee, say 5000 a month for working them on an ongoing basis. Okay, so I hope these top five ways helped you understand different ways that you can build clients. Good luck.

 

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