Sent by Jonathan Stark on July 6th, 2018
Some of my coaching students have shared experiences with me recently that have reinforced a long-standing belief of mine:
When getting started with value pricing, it’s almost always easier to get new clients than it is to convert old clients away from hourly billing.
The very existence of a long term hourly billing engagement is a strong indication that your client views you more or less as an employee.
They see you as someone who they manage. Someone who they assign tasks to. Someone who they expect to do as they’re told. And most importantly, someone whose opinions are tolerated but not valued.
(Do your clients sometimes ask for your advice and then not follow it? That’s a sign that they might not really value your opinion.)
Value pricing a project requires that you push back hard on what a client is telling you to do. You have to force them to expose and validate their assumptions about their chosen strategy, tactics, and timing.
If you take this approach with a client who you have essentially been taking orders from for months (or years!) they’re naturally going to react with some variation of, “Who are you and what have you done with our developer?”
You’re not just asking them to pay you differently. You’re asking them to see you differently. It’s not impossible, but it’s very hard.
So... what are you supposed to do? Tomorrow, I’ll give you some tactics for dealing with existing clients when you are trying to ditch hourly billing.
P.S. I know not everyone reads these messages as soon as they come in, so here is a head’s up: I’m planning to announce something on Monday that is going to be time sensitive. Keep your eyes on your inbox early next week if you’re curious.