Pricing is always a hot topic, especially when venturing out on your own and trying to make a living, all while not pricing yourself out of opportunity. Additionally, there is a tremendous amount of information concerning pricing, negotiations, sales tactics, etc… so determining your “price” can be a daunting task. Below you will find a few check points that will provide a 360-degree view, helping to ensure you do not price yourself out of projects. Of course, this is simply a checklist and one component to the overall strategy to close more business.
Skill Scarcity- If you are going to market your specific skill set, determining the scarcity of your skill is a critical step. Are you in a saturated market where most individuals compete on price or are you in a smaller market where there are fewer competitors and therefore each “specialist” can fetch a premium? Understanding your offering and where it resides in the value chain is important to uncovering the right fee to charge.
Strategic or Tactical- Similar to skill scarcity, where would you rank your specific skill from a strategic standpoint? Would the service you are providing help change a company’s trajectory and is tied to strategic direction, or would your role be more inline with assisting a company in an on-going initiative, essentially adding “horsepower”? Knowing the answer here will help further develop an understanding as to the value you can associate with your specific skill set.
Market Pricing- This can be easy to determine if your skill set is ubiquitous, but more arduous to uncover if the skill set is scare. Additionally, there are many regional implications on pricing (e.g. The Atlanta area may fetch a lower rate than someone providing “like services” in the Bay area). Due diligence on pricing can be a helpful benchmark, helping you to adjust your rate based on the average experience of the individuals providing similar services and where they are physically located.
Project Duration– Project duration is an important, albeit often overlooked, consideration. We have engaged with many consultants that, prior to working with us, simply provided the same rate no matter the situation. This is an OK approach, but sometimes more high-profile projects, with critically short time frames, can and should fetch higher fees. This is because the stakes are higher and you will generally need to be “more available” to your partner to ensure you hit the requested deadlines. Plus there are opportunity costs that should be considered should you move forward with the project.
Opportunity Costs- What are you giving up to take on the project at hand? Is the project duration so short and rate so low that your time would be better spent looking for a better fit? Not all business is good business, so keeping a critical eye on your specific situation, agenda, and objectives is important. After all, no one knows your ability and interests better than you. This is a good segue into why looking at an opportunity holistically is crucial.
Holistic Opportunity- Once you have had a chance to think through the aforementioned areas, it is critical to look at the opportunity in its entirety. Is this a “one and done” opportunity, or is there much more work to be earned? If the latter is true, then sometimes this may call for a slightly reduced rate in order to ensure the business can be won. This does two things; first, it can greatly reduce proposal iterations and second, let you quickly add value and earn trust, which can generally be parlayed into a longer and more lucrative relationship.
If you are struggling with pricing, please reach out…we are happy to help. The Free Agent takes the guesswork out of pricing, ultimately “co-selling” opportunities to ensure the right price is passed onto the customer and all parties feel confident their interests are covered.
About the Free Agent- The Free Agent utilizes a vetted bench of battle-tested experts that work directly with companies in hyper-growth. Simply put, we provide the right strategic experts at precisely the right time in order to accelerate results. If you are interested in learning more, or joining our vetted and curated platform, please do not hesitate to reach out: firstname.lastname@example.org. We live and breathe the gig economy and are always interested in beginning a dialogue.