Episode 1 with Brennan Dunn
How to Charge 10 Times More Than Your Competition

Brennan Dunn is the founder of Double Your Freelancing and helps teach over 40,000 freelancers and agencies how to earn more money and work with better clients. He's also the co-founder of Right Message, a software company that brings onsite personalization to the masses.

How to Charge 10 Times More Than Your Competition

Brennan Dunn is the founder of Double Your Freelancing and helps teach over 40,000 freelancers and agencies how to earn more money and work with better clients. He's also the co-founder of Right Message, a software company that brings onsite personalization to the masses.

In this episode, Brennan teaches us how we can charge more as a freelancer by:

  • Pricing your services based on value:

    You can charge more if you focus on what you’re worth to the client rather than simply the service you’re offering.

  • Treating your client like a partner:

    You get more creative freedom if your client trusts you to deliver results, and they get a more valuable service - which you can charge more for.

  • Uncovering how your work will affect ROI for your client:

    Learn how to ask the right questions so that you can determine the what the client will get in return for the work that you do.

  • Selling an outcome:

    By determining project goals and how you will reach them, you can price your work based on the results you’ll achieve rather than the outputs you provide.

  • Distinguishing yourself from other freelancers:

    There are likely many freelancers who offer what your client thinks they need. But you can show you’re different by getting to know what your client really needs and offering a solution that’s tailored to that.

  • Using case studies to your advantage:

    Having clear examples that show how you’ve impacted other client’s businesses can be instrumental for showing why you’re charging more.

Full transcript

Juan

You're listening to the Six-Figure Freelancer audio course, brought to you by AND CO from Fiverr. We interviewed top professionals who share their exact formulas for success in starting, growing, and maintaining a six-figure freelance career. And I'm your host, Juan Felipe Campos.

Juan

Okay, freelance masterminds, remember: on every episode of the Audio Course, there's a giveaway of digital goods or resources from our partners that other people don't have access to. To get your audio course resources, subscribe to the audio course on iTunes and then visit and.co/resources. Again, that's a n, d dot c o slash resources to access your digital goods.

Juan

Brennan Dunn is the founder of Double Your Freelancing and helps teach over 40,000 freelancers and agencies how to earn more money and work with better clients. He's also the co-founder of Right Message, a software company that helps bring onsite personalization to the masses. Let's hear more from him in this episode of the Six-Figure Freelancer audio course.

Juan

Brennan, thank you so much for coming on the show.

Brennan

Yeah, thank you Juan.

Juan

Brennan, walk us a little bit through how you think about pricing your services as a freelancer. If I'm a freelancer, I don't know how to run my own business. Maybe I'm the best SEO person, the best designer, but I don't actually know the business aspect of it. How would you get started with figuring out what my pricing should be?

Brennan

So the big realization for me, and this came back when I was going beyond myself to start an agency and start to hire employees and all that good stuff, was realizing that clients weren't paying me for design; they weren't paying me for code. They were paying for an outcome. They were paying for a better business than they had today. And the mistake that I made early on was just I focus so much on the technicals, you know, I'm a good coder. I am being hired to write some code. I focused on: what's this code going to, not look like, but how are we going to write it? What features are we going to build and sell on? Instead of focusing on, you know, 'why is this business willing to pay thousands or tens of thousands of dollars to somebody like me?' I never even asked that question. I never thought through what was at stake business-wise - I just focused on what I was doing. And the problem became, I was commoditizing myself. I couldn't argue if they said, 'hey, there are guys on Upwork.com who are $8 an hour and can also write code, why should I pay you 15 times more?' So the big thing that kind of set my agency apart early on was this transition away from just being a technical provider to actually being, really, a solution company, right? I know it sounds 'Enterprisey', but we would go in and actually figure out, what's at stake? Where's the business now? Why are they firing like their old website and getting a website redesigned from us, what's wrong with the old one? Not just technically what's wrong, but how's it failing their business and what needs to happen to make this new thing, not just a new design, but also something that is actually gonna make them more money than they're spending.

Juan

Okay, perfect. So basically by deploying empathy and putting yourself in the shoes of the employer, you're able to figure out what it is that they need and maybe ask the right questions to understand what it is that they're buying. They're not buying someone that just clocks in and clocks out to write code. And that is what they're getting at Upwork. So if you want to increase your prices, it's not just saying I'm a better developer. It's saying, okay, let's take a step back. What are you trying to build and why are you trying to build that? And then you know, being more of a consultant in that sense and more of... in your case, it was more of like an outsourced CTO that is helping them make the right decisions even, instead of helping them just delegate whatever decisions they already made and then just coding it and taking a step back and saying, I'm not responsible for whether or not this works. So you're actually aligning yourself with their values. Right? So that's one of the main principles so that you ask the right questions, so you price it accordingly.

Brennan

It's really all about risk. I mean, really it boils down to risk mitigation. It's about if you know what's at stake, you're more likely going to deliver a better product and therefore you're able to charge a premium for a better product and really everything boils down to that - it's reducing risk. There's a lot of risk in saying, 'I'm going to swing my coding hammer for you for 50 hours.' That doesn't imply that anything actually beneficial is going to come out of that. You might technically deliver it, but you might actually fail when it comes to delivering the wrong thing. Right? So that was the big thing. I mean that's really a lot of what I teach when it comes to figuring out what the problem is behind the project and quantifying the potential upside of a successful delivery. It all boils down to risk mitigation and delivering a better product that demands a better price.

Juan

Sure, and I'm sure, especially in your case as a coder, by asking the right questions and understanding where the business goals are for the project, then you can make a lot of these micro decisions that you would have otherwise, like at every crossroad, at every fork in the road, you may have taken a decision that was faster or just easier for you, but now by understanding where the project is going, where it's going to be a year from now, and what it's going to be used for, then you can make a lot more of the right decisions. So when you deliver something, the client is ultimately happier with the end result than if you had just taken decisions in the selfish, short-term for what's in your best interest. So even that - there's value in that that you can easily mark up for.

Brennan

Absolutely, and you're able to get away from being just an order taker. When I started, I thought the client had everything figured out. They knew what they wanted and we started transitioning more into being really partners and I know everyone says that, but I legitimately mean in the sense that if the client wakes up and says, I have this great idea that I thought about last night, can we redo what you just did over the last week and do this instead. The old me would've said, sure, you know, being paid by the hour or whatever, but really one of the benefits of working alongside your client first and figuring out where do they need to get to. And that's it. Like the, the code you write, the designs you do, and everything else is a means to an end to getting there.

Brennan

So both you and the client really need to justify scope changes and justify, well, okay, so you want to do this instead of that. Tell me how that's going to get us to the goal faster and more efficiently than we thought we'd be getting there. Right? So I mean, just that kind of stuff is, for my own agency, for instance, it allowed us to have more creative freedom, which is what a lot of us want, and to be just treated better by clients because you're not just the vendor they're delegating out to saying 'jump this high for me'. And instead they're working alongside of you, where you're the technical expert, you've worked with a lot of people like them, you've seen what works and doesn't work, and they're the domain experts. They know their business, they know their industry and so on. And you find a way to kind of work together to produce the right project, which is really key.

Juan

So, Brennan, let's walk forward to the other steps of this process. Let's say listeners at home, they're saying, okay, I believe you. I absolutely need to be asking the right questions. I can see how this is hurting my positioning because maybe if I come back with an opinion but I haven't been consistently interested in where the project as a whole is going, that I'm going to ask the wrong questions. I'm not going to look like I'm contextualized as opposed to you who look like an expert because you've partnered the whole way through and it's you and the client versus the problem as opposed to, in my case it's me and the client and this tug of war of how many hours and how much per hour and all of this. Let's move onto the next phase. How do I actually then figure out how much to charge them? Are you doing it by the hour or are you doing it in packages or are you bulking together value? Can you walk us through that?

Brennan

Yeah, so I can give you... I haven't been a consultant in quite a few years, I've been running different online businesses. But the last time I sold a consulting package, it was a $50,000 project to do email marketing and copywriting, and the way that pricing came to be was I just basically looked at the business, I looked at the current state of things, so how do they make money, what is their current volume and so on. And then what I did is I just applied, well, if we did this and you were able to fix this bottleneck and that bottleneck and so on, based on your data, based on your numbers, we could project out to this sort of ROI within six months, 12 months, two years out, three years out and so on. And what I was able to do, I was able to anchor my costs against the upside, and the upside was not just some like 'pulled a number out of thin air'.

Brennan

It was something I worked alongside my future client in figuring out, looking at their numbers. And the way I was able to get this data was telling them, I don't want to work with you unless we know there's going to be an ROI. I respect you as a business owner in knowing that you don't care about email copy being written, you only want it written if it's going to yield a return on investment. So let's figure this out together. And then that way when they got to my cost, it was previously anchored against an upside that was outweighing that cost. So they're not just seeing $48,000, (which is what I quoted them), is that too high? Is that too low? What's the going rate of somebody writing copy and stuff. That was never even a question. It was more focused on here's where I want to get you to, here's reliably how we'll get you there, and my overhead, my cost is going to be this. So that way it's, do you want to spend a dollar to get two back?

Brennan

And that's basically the argument that was being made. Instead of just saying here's the quote, here's a bunch of line items, about 20 hours doing this, 30 hours doing that and so on. How the sausage is made was completely left out of the equation. It was more of a focus on here's where we're going to get to. And yes, I don't charge by the hour, don't charge for time and I obviously have like an internal estimate in terms of how long I think it will take and so on. But there's plenty of padding there that even if it was to take twice as long as I expected, it's not a huge deal for me. And on top of that because I mandate with my clients that, look, we're, we're partners in this in the sense that I know how email marketing works, you know the financial services industry, which is what this client was in.

Brennan

I don't know your industry, you don't know what I do and so on, but we're going to make it so if you want to do something that's going to take considerably longer than anything we talked about early on. And I appreciate and understand that scope does change, especially as you start to play with things, get more data and so on. What you do might end up needing to change however we both need to really justify to each other if we're going to make changes, if we're going to do something different, why we're doing that and this way they didn't just have like a blank check at an all-you-can-eat buffet to just do whatever they want for $48,000. Instead it was really both me and my client dictating what was going to be done and having a very clear end goal.

Brennan

Not in terms of how much, or how many hours, or how much stuff, but more of a when we meet this, when we get here, that's the completion of this project. And that's, I mean that's been my attitude for the last eight, nine years and it's worked really well because it allows me to have more freedom. I'm obviously making more money because I'm not competing against the world and... Like the work I did, for instance, for that client - managing email marketing software, writing copy, doing a little stuff when it comes to looking at their site, even writing a little javascript and so on to make things work. I wasn't selling copywriting, I wasn't selling this many words. I wasn't selling anything technical. I was selling an outcome and, internally obviously, I knew what had to be done to make that happen.

Brennan

But I think that's the big difference. That's the difference between when I first started and I thought I'm a Ruby on Rails developer. What is the going rate of Ruby on Rails developer? I kind of treated things like I would if I was getting a job at a company, and I'm applying for a software development position. I'm going to tout my software development skills. Obviously you still want to show people that you know what you're doing. Case studies are great way of doing that to show that like, here's other people like you. Here's where they were, here's where I got them to, here's a few bits on how we got them from here to there. But the big thing is I realized that when you internalize that people are not paying you for code, they're not paying you for design, they're not paying you for words, they're paying you for a business outcome that the are hoping to achieve and you sell that outcome and you sell a clear path from getting to that outcome that shows the client and you get their business, you understand that, they don't wake up and say, 'wouldn't be great to spend 20 grand on design?'. No one, no business, ever thinks like that, right? They're thinking, we have a problem that needs to be fixed and if you can figure out what the problem is and help the client figure out how to fix it, that's what's going to set you apart from everyone else who's just saying, I'm a freelance designer. I charge 50 an hour because that's what other people are around me are charging, and you know it, it kind of becomes this race to the bottom.

Juan

So this is a huge paradigm shift. I think a lot of freelancers, when we jump into entrepreneurship, we think... What we tend to do is: this is what other people are charging for this kind of service. I'm either better or worse than the other portfolios that I'm seeing and if I'm better, I will mark it up by 10, 20 percent, 30 percent. If I'm worse, I'll mark it down 10, 20, 30 percent. I'll take into account the country that I live in, and the currency, and the country of the clients that I'm looking to reach. So if they're in Europe or in the US, that might increase the prices a little bit. And then that gives us the little magic formula at the end of 'I am worth $23.50 an hour', or whatever. And Brennan, what you're, what you're proposing is totally different.

Juan

It's basically setting up a plan of action with the client to understand the upside of the project. So this project has an expected result of 250, four, five hundred thousand dollars. My fees are $48K. My fees. It's not even, this is how much time or anything like that. It's my fees to give you that result is $50K. We just ran the numbers and I'm anchoring everything to that end result. This is so, so different than how many of us are pricing. And, for those of us listening, I hope that this is very, very valuable. If you really understand the paradigm shift that Brennan is proposing, it can be tremendous for increasing your prices. So that's the strategy. Let's walk a little bit through the tactics Brennan. Am I expecting to get paid for that research? Am I going to say something like my fees are typically between $15 - $30K, but let's get started with a $2K commitment to come up with a one year, two year, three year plan. How does that work?

Brennan

Yeah, so I call it road-mapping. And the idea is you basically sell a preliminary entry-level product that is fixed scope, very defined and typically the deliverable of that product is a report which is really a proposal, right? So what I encourage people to do is if you think about it, especially if you do something like custom software where you're talking about multi-month-long engagements, sometimes, it's not only financial risk, but there's a lot of risk in terms of the amount of time somebody will invest in working with you, the amount of opportunity they might be risking by going with you versus somebody else. And there's also risk of like, hey, the client's really eager to move forward, but you're fully booked for the next month. What do you do? Do you just double up, do you hope maybe they'll wait?

Brennan

So what I like about road-mapping is what I typically do with this, and I do it whether I'm selling email marketing or back when I was doing software, is it's a either a few hours or even an all day session pricing between anywhere from $1,000-$5,000. And the idea here is it converts somebody into a client, which is key. It creates that, they've now paid you, they're your customer. And what you're able to do is you're able to sell it as a consulting service where you're going to go and formally diagnose their business, figure out all these different things that they can't really do easily outside of a client relationship because you're under NDA. You're under all these things where they can talk in the open, talk numbers and so on. I use this as really a scoping session where we're looking at the big picture.

Brennan

Where do we want to get to working with a client, to come up with an initial prioritized list of what's going to happen and then, for the deliverable, basically telling them, look, if there's anything that I need to maybe do a little additional research in that we talked about during our session, I'll do that after we meet. And this can be done remotely, it can be done in person, it doesn't really matter. I like in person because you can do like three by five note cards and whiteboards and all that good stuff. But the deliverable is a report that basically sums up everything you discussed and is effectively a sales letter. So it's not just a list of itemized whatever. It's a sales letter saying here's the problem and this is what we talked about.

Brennan

Here's where you need to get to the solution. This is what we talked about. Here's some different paths we could use to get there. I like offering different packages because it's better. I'd rather them say, do I want to spend it? You know, do I want to choose A or B, versus do I want to hire, not hire. That's a big psychological trick because if you want to basically you want to show them: here's where you need to get you. Here's where you said you want to get to business-wise. Option A can meet you halfway there, Option B will get you all the way there, Option C will get you even well beyond where you thought you could get to know and they'll be priced accordingly. Right? So by focusing on that, you give them the option of do I want A, B or C, and then you include the urgency which is really the opportunity cost, which is how much are they losing by not moving forward doing this.

Brennan

So this is all really just recapping data points that you've captured through this paid road mapping. And the report is taking a proposal, if it's a free proposal that you spent some time on, you send to a lead, they don't treat it that well versus if it's a report they paid for. I mean this is something they paid a lot of money to get. And in that is basically the upsell, which is, if you want me to now implement what you've done, I can do that. Or you can take this and shop around and I can tell you first-hand that I've never had anyone shop around, because there's still going be a lot of risk if, let's say, they work with you in that initial upfront road-mapping. You get an idea of who they are, what business they have, where they need to get to and so on. There's going to be that risk. If they say, well, I'm going to lose this person who has all this context and start shopping for maybe somebody else who is on paper capable of doing some of this stuff. But then there's that whole risk of like, well, are they really going know what needs to get done? Are they going to act the way, in this case Brennan acted, are they going to have a process similar to the process he's listed out and kind of encapsulated in this report? So if they do want to, maybe sit on it or look at somebody else or maybe hire somebody in-house to do it, cool. Whatever. At least I still got paid for that.

Brennan

At least it was still a meaningful transaction for both of us. But it's really the benefit is you're able to sell that whenever even if you're fully booked, it doesn't carry a lot of overhead and risk for the client because it's only a few thousand dollars. I've seen some people charge like $200 for this, where it's a one hour skype call. You know, the packaging, the format, it's really up to you. But the real thing here is that it allows them to have a stepping stone into working with you, versus doing something where it's all or nothing. And then you go into your cave and write this big proposal, throw it over the wall. Are they going to accept it? Yes or no? It's just, you know, I like proposals to be more of a collaborative exercise versus it being this kind of back and forth sort of thing.

Juan

Oh, totally. So, oh my gosh, this is so much gold to dig through. I mean, basically what you're talking about, Brennan is using, in sales there's this concept of the monkey's paw, which is those ginormous ships that we see, how do you think those big ships get all the way to port? They typically do rope them in, but each rope is like as thick as a person. They don't just throw that over. So what they do is they actually have a roll of rope, just a small ball of it. And that has a very thin rope that is then tied to a very big, big, big rope that actually reels in the boat. And that little roll of rope gets thrown onto port and that's how they start pulling in the bigger rope. So it's a very small, thin piece of rope that actually brings in the bigger rope that eventually brings in the ship.

Juan

And that's essentially what we want to do in sales, right? We have a high ticket service and many people say, well, I'm worried about increasing my prices because my prices are going to be so high that no one's going to want my business. What Brennan's proposing is they do want your business. You just have to lower the risk for them. And the way to do that is very simple. It's both in your interest and in the client's best interest because you're going to do research, you're going to do a scope of work for what their relationship is going to look like. You're going to get to know each other. You know, it's like, I can't work with you until I work with you. It's a small commitment on their end. It's a low risk on your end because you're getting paid for the work, you do the research, you do the analysis at a smaller buy-in, and once the client is convinced, and we have tons of strategies here for making sure that they don't just drop off at this point.

Juan

First of all, they've already spent money on you. Second of all, they've already spent time on you, so that by itself is on your side. Third of all, what Brennan is suggesting here is this is a hack that you can do with kids, basically eliminating the option of the yes or no, but you say, do you want to leave now or do you want to leave in 15 minutes? It's not 'do you want to leave now or not?' It's do you want to leave now... So in this case it's, do you want Plan A, Plan B or Plan C? It's not, 'do you want to work together or no?' That's a mistake many of us are making, is this is the final proposal. Take it or leave it. Brennan is actually saying, here's three different ways we can do it at three different speeds. The middle one, it meets your expectations. C actually exceeds them, and funnily enough, you'll be surprised. Some clients might actually get on your premium package if they even know that the option is there because money isn't always an issue, and if money is an issue, then they can go at the lower tier service and then you still got paid for the research and now you signed on the client.

Juan

Okay, freelance masterminds. Do not forget to pick up your digital resources from this episode. It's very simple. You just subscribe to the show on iTunes and then once you've done that, visit and.co/resources. Subscribe on iTunes and then visit a n, d dot c dot o slash resources to get your digital goods. See on the next one.

Juan

Brennan. This is amazing, amazing info. As you continue to grow and take your business forward, where's the best way for people to stay in touch with you and learn more about what you're doing?

Brennan

If you go to freepricingcourse.com, if you want to dive really deep into what we just talked about, that's probably the best way that'll get you in communication with me and so on. I'm also doubleyourfreelancing.com, which is a community of about 50,000 freelancers and small agencies where we talk, focus on the business behind your business. And if want to say hi to me, Twitter is also great. Brennan Dunn there. B R E N N A N D U N N.

Juan

Perfect. And all of these links are going to be in the show notes. Brennan, thank you so much for coming on the show.

Brennan

Yeah, thank you Juan.

Juan Felipe Campos
About your host

Juan Felipe Campos

Juan Felipe Campos serves as VP of Technology at Manos Accelerator in partnership with Google Launchpad. As a freelancer, Juan has worked on growth and customer acquisition for VC-funded startups including Ease, Admix, Timeular, and AND CO from Fiverr. He hosts the Six Figure Freelancer audio course/YouTube channel, leads the Freelance Masterminds Facebook Group, and is passionate about helping remote workers make more money and live life on their own terms. His companies have been featured in major publications including Entrepreneur, Huffington Post, Inc. Magazine, and Forbes.

next episode:
How to Never Get Paid Late Again: Using Contracts and Agreements