Chris:

I'm curious, do you have a question about your business? Maybe it's social media marketing, maybe it's a pricing thing. Perhaps there's a book that you read and you read something in it that you thought was really cool or interesting but didn't fully understand it. And that book could have been my book, or you might have heard me say something on short on YouTube and you're like, "I don't have context on this. I don't fully understand what the heck you're saying." Well, if that's the case, I'm here for you. So all you have to do is bring it and I'm ready. So Drigo, I'm going to throw it over to you first. I know you have a business question and I'm here to help you.

Drigo:

My question is, how do I start facing out my bad clients?

Chris:

Oh, okay. Good question. Yeah, so Drigo's question is about, well, if I'm bringing in new clients, how do I start getting rid of my bad clients? Is that the question, Drigo?

Drigo:

That is correct? Or how do I start raising my rates on them?

Chris:

Okay. So those are two different questions, I'll answer both. You know that I'm not going to do a conversation about pricing and business if I don't mention Blair Enns at least one time. And I like this the way he phrases this. He says, "We build our agency, our practice, one new client at a time." So you get a new client that's better than your old clients and you cycle out your old clients. It's just a natural thing that happens in all businesses. You're always going after bigger and better clients and you get to find bigger and better, however you want. And you got to get rid of some of the older ones to make room because you don't have enough capacity. The mindset that a lot of us have is that we're afraid that we can't find a new client. So we keep holding onto these, bad sometimes toxic clients.

And I think you already know what those clients are. They generally don't pay you what you're asking for. They ask for lots of changes and they're pretty much very demanding on you, and when you're supposed to be available. They might call you on a Friday night and ask for something by Monday morning and they don't appreciate anything that you do. They don't trust you, they don't respect you. And every time you make a suggestion like, "I think we should go this way." "Yeah, I hear you, but we're going this way." It's not even a discussion with them. So it's easy to identify those types of clients and I'm painting a very extreme picture because it's much easier to like, "Oh yeah, I want to get rid of those clients." So I think what you want to do is you want to resign that client. Now, I would do this ahead of you even getting a new client.

So let's say in a given year, you want to have 10 clients that give you recurring business. So throughout the year they're calling you for this or that, but they're calling you. And we want to try to manage just about 10 clients that we're working with in a year. So you want to cycle out the bottom two, number 10 and number nine. And if you read other business books not written by Blur Enns, they'll ask you to say, "Define in your mind who your ideal client is and what are they doing?" So create some attributes for them. Is it about the price, how they talk to you? Is it about the kinds of projects and how much creative autonomy you have? And then go and rank all of your clients from a scale of one to five. And then you'll quickly see that the D and F clients, you have to fire. The A clients, you want to get more of, you want to take better care of them because they're the ones that you want more of, right?

So now you've identified them using some kind of objective measure or metric and just get rid of the bottom two, just get rid of them. And so you're going to resign them. And the best way to resign a client is potentially, ask for the terms that you want or say goodbye. So one of the greatest or easiest ways to say no to someone is actually not to say no to them, give them a choice and then allow them to pick. So for example, if price is one of the biggest problems. Like you love everything else about this client except for they never want to pay you what you think you're worth. So you can just say, "Starting in February, I'm changing my rates for all my clients. This is the new rate. I wish that you would come along, but I can respect that you might not want to pay this new rate and the choice is yours."

And that's a really great way to resign or fire a client. And sometimes you'll be really surprised that many of them will say, "Okay. Yep, you're right. We can't afford that. We're not budgeted for that. Thanks for letting us know in advance of the date or the price change. And then some of them, to your surprise, will say, "That seems reasonable." And when they say that to you, now it will happen to you. I promise you, if you have this conversation, not all of them, but a handful will say, "That seems reasonable." You're going to be sitting there asking yourself, "Why did I wait so long? What was I afraid of?" Because all this time you've been working with them just grinding your teeth, doing the project, not loving it, mostly because you feel like you're just working too hard for too little. Have that conversation.

And I'll share a personal story here. When I first started doing one-on-one coaching, which I hadn't planned on doing, but I was getting asked for advice from all corners of the internet, from DMs to emails to comments. It was coming at me at all different angles and I wanted to help people, but I found that the level of questions that they're asking were just way too complicated. I'm going to have any free time for myself to run my own business. Well, the way I resolved that was I put a price tag on it. So instead of saying no, I sent people to a page where they could book me. You see, I'm applying the thing that I'm telling you to do. And by doing that, I essentially allowed them to say no to themselves. And initially the price to do one-on-one coaching call with me I think was $500.

And I thought that was a lot of money because prior to that I was giving it away for zero. I was just giving advice because I wanted to help people. And I also, I just had this idea in my mind that if I started to price people out, I'm going to make it so that the people who need my help the most were not going to be able to afford it, which is counter to my mission. But I did it at $500. And initially, the kind of questions and the queries that were coming at me slowed down and stopped, great problem solve, I have my free time back. But then people started booking me again and at first it was like, "Oh, this is nice. I can go and buy something for this one hour that I'm exchanging with someone." Like, "$500. Great. I feel less guilty when I go out to eat at a nice restaurant with my wife or my kids. Okay, cool."

But then the booking happened more and more, so demand was expanding. I needed to do something different. So I had to raise the price and I wanted to only do a couple of coaching calls a month. Three or four is a max that I ever want to do. It's not scalable for me. So I raised the price to a $1000 and I thought for sure this was going to be the end of it. This is it. That's double. Like, "Who wants to pay a $1000 an hour? There's a lot of things you can buy for a $1000. Why would you want to do this with me?" So of course again, it stopped and then it started again. So people are booking me at a $1000 an hour and it got to the same exact, quote-unquote, problem... I know, this is rich people's problems, right? And I had to raise the price again and I raised it to $1,500. Same pattern happens over and over again.

So a couple lessons to peel away from here. So if you never change the price, you never realize what the ceiling on your value is. And at least in my case, I was always pleasantly surprised. Like, "I wonder what that ceiling is because I had done this for a year at $500 an hour, maybe I should have just started at 1500." I'm not advocating for that, but I'm just letting you know whatever price you're at right now doesn't have to be your final price. You can keep raising your price. And if there's a skill gap where you honestly feel that you can't deliver that kind of value for what you're charging, rather than keeping your price low, fill the skill gap. Go learn some things, go get coached, take a course, do some experimental projects so that you can develop some experience doing these kinds of things. And this is how you build your agency or practice one new client at a time. I'm going to pause there. Drigo, did I answer your question?

Drigo:

You did, Chris, I was wondering if we a little bit more [inaudible 00:08:33] meta and maybe sort of do a role play of how would this conversation sound with a client like if you're calling them up or you're doing this over the phone, what would you recommend?

Chris:

Okay, sure. Is this for a video project, Drigo? Give some parameters. Give me the high level.

Drigo:

Yeah, so I've been working with this client for about a year now. Our average projects with them, were around $4,000, but we're really putting in an $8,000 production. We want to keep working with them, but we're to the point that we built out that portfolio. We really got what we needed, but now we need to start making some money working with them.

Chris:

Okay. This is very interesting. So there's a couple things here already, I'm hearing. You're doing projects for clients that you're charging $4,000 for, but you believe that you're giving them $8,000 worth of production value. Is that right, so far?

Drigo:

That's correct.

Chris:

And if you gave them a $100,000 worth of production value, would it make any difference on their business?

Drigo:

I think it would.

Chris:

What would they say to that?

Drigo:

I'm not quite sure what they would say to that to be honest with you.

Chris:

Okay. This is the thing we need to start thinking about, right? We think mostly through our lens, what we do. So we say if we exercise and put more craft and just polish it and add production to it, that then the product is worth more. And in a lot of cases it's not. You know who MrBeast is and his videos, I think, objectively speaking, are not the best on the internet. It's not shot well. The audio's okay. It's not really well color corrected, but he was the number one creator on YouTube last year. Number one, number two, number three, number five on the top 10 list.

I saw a report that it's estimated he made 54 million last year as a YouTube creator. And so if MrBeast sat around and said, "Why don't we shoot on 8K like MKBHD and let's color grade this thing so it looks like a Hollywood production or shoot it in the way that DevinSuperTramp does with his videos, that it would get more views." But if you care about views and hours watched, maybe putting more production into something isn't actually something that matters to your clients. Can you consider that, Drigo?

Drigo:

Yeah. So I guess, to get clarification on this. It's more of, we're putting a lot of pre-production into the project that were not pretty much billing the client for. So like the casting for talent, booking account, dual location scouting, all these different elements that goes into doing the commercials, what we're charging them for, we're pretty much only charging them for the date of the shoot and the editing.

Chris:

I understand. So there's a couple different things here. Again, I want to answer your question, I will. Because you're like, "Dude, why isn't he answering my question?" You're talking about what it's costing you to do, but you're not focusing on the benefit to the client. So yes, you are doing casting, you're doing pre-production, you're doing storyboarding, you're making a shot list. Those are all things that you need to do, to do your job well because if you don't cast well, if you don't do wardrobe and art direction and you're not doing location scouting, well that reflects poorly on you. But these are all costs to you. And to be honest, most clients don't care about that.

Like when you go out and buy a fancy car, one of these European imports that is going to be high, five figures, maybe six figures and up. Does the salesperson sit there and talk to you about how hard it was to make the car and where they got the rubber for the tires and how many mechanical pieces that are moving in the engine? What do you care about that? You care about how it makes you feel. So imagine two salespeople, one salesperson talks about how hard it is to make in the labor and the other person says, "Sit in the car. Imagine yourself driving in the road with your... I know you're a single guy, but with your girlfriend. Imagine how you would feel pulling up to that restaurant with everybody's looking at you and you smell that leather and that wood and you touch the materials and there's that solid thud when you close the door or when the engine rumbles comes to life." What's he selling you? He's selling you an emotion. The other person is just talking about themselves. Which one are you more inclined to buy from? I'm curious.

Drigo:

The guy that's made me feel something.

Chris:

Yeah, and we talked about this the other night. When we make decisions, almost all of it is emotional. And so when we're appealing almost all of it to the logic, especially the logic that is about us, how hard it is, and we can get really detailed. For example, you talk to a prospect and instead of talking to them about what matters to them and their business and how video may or may not impact their long term business goals and their desired future state, you sit there and talk about, "Well, we're going to shoot this with a Sony A7S Mark Three, I'm going to be using a Sigma lenses and then I got this gimble that you're not going to believe." Who cares, right? Who cares? That's your job. What are you telling me all that stuff for? "Oh, the color grading. My god, I got this new LUT, I bought some new color presets from Peter McKinnon. Oh this is going to look so good and I'm going to shoot a really shallowed up the field. It's going to have that creamy bokeh." And then, "What's bokeh?"

You see what I'm saying? You're talking about yourself. You're talking about your gear, your equipment, how hard it is for you to do. In some instances this does matter, I don't want to discount this entirely. But at the end of the day, the general conversation you're supposed to have with your client is this, "What's a problem you're trying to solve that you haven't been able to solve? And is this something that you desire to solve?" And then they'll tell you about a problem. And then in your mind you're listening to that problem and you're trying to see, "Do I do anything that might solve this problem? If I don't, I'd owe them an honest answer and then I'm going to tell them and then I'm going to refer some other people and that's it." Clients aren't buying what you do, they're buying a solution to their pain. Find the pain point, find the desired future state and then offer that up.

So Drigo, let's go back to your question. Your original question is like, "I'm doing a lot of extra work that I'm not getting paid for." And then I have another question for you, whose fault is that?

Drigo:

Oh me. I know it's my fault, but it's like I wanted to get my foot through the door with them. And I got my foot through the door with them, done a lot of great projects, but now it's at the point that I feel like the relationship, it's definitely more laying on us and it is on them.

Chris:

So you do what a lot of people do and I don't blame you, you buy the project. Essentially you subsidize the client's budget by charging the less than what would cost you to do to another client, right? So it's an $8,000 video, easily, and you're charging $4,000 for it because you want them to say yes. You essentially buy the project, right? You give a discount, you underestimate on purpose what it's going to take you to do and so that you can build this relationship. It's really important for you to do this. And so you do it. And then as soon as you finish this project or even while doing a project, you think to yourself, "My God, the amount of work I'm putting into this, I can't do this again." So what happens though, the client's like, "Oh, that was wonderful. We have another project for you for $4,000." And now you have this dilemma.

"In fact, I've told 10 of my friends that you do these kinds of amazing things for $4,000 and they're going to be all calling you." You have a problem. Okay, so before we have this kind of problem, we could probably solve it. I'm curious if you have any ideas as to how you might solve the problem before you have it.

Drigo:

I would want to have a talk with them before the next project comes up. And as we're wrapping up this project, I would want to have the discussion with them about future ones that we had a great success with this one, but coming up with the next one that if you could allocate more budget to making an even better project.

Chris:

Yes, that's a solution. The solution I was thinking of is before you actually even do the first project with them, you should have this conversation and it would go something like this, "Mr. And Mrs. Client, I really am excited about your brand, about the project and what we could do together. Now I'm leveling with you. Normally, I would charge $8,000 to do this." And you would just take a deep breath, "But I'm willing to do as a one off deal for you for $4,000, but I'm going to ask for something in return." And they're going to say, "What's that Drigo?" "I'm going to ask that you refer me to three friends and let them know how great of a job I did for you. Only if you feel that way in your heart, do we have a deal?" And they're going to say, "I think so." And you're going to say, "Well, my business is built up primarily on referrals, word of mouth advertising."

"And so in order for me to do this, it's cost me a $4,000 difference. But I think you're the kind of person who's a really good connector and I'll leave it to you. So towards the end of this project, as we're wrapping up, I'm going to ask you for three names. And I would appreciate if I held up my end of the bargain and I'm extra motivated now, to do a good job because I just have this agreement with you that you actually follow up on your end. Are we in agreement?" And they're going to say, what? Yes. So you've prevented the problem before the problem even begins. You've anchored high, you're letting them know this is an $8,000 package here that you're going to give them a 50% discount. And I got to tell you, anytime you offer anybody a 50% discount, they just buy. Like right now, literally I'm on a website, I'm going to buy a shirt, I don't even want to buy a shirt, but it's like 60% off, I'm like, "Maybe I need to buy this shirt. I don't know."

And so they're putting the value in their mind at eight. And if they think about anything else like, "Well, I don't want to make an extra change because Drigo's already given us a 50% discount." And it's really important for them to let the true value of this thing sink in their mind at least... I'm sorry, the perceived value at 8000. So they're not sitting there later on and just needling you for let's change that pixel right there. And so now you've solved almost all of your problems. You don't have to go back to them and tell them, "Well, next time you ask me it's going to be 8K. Or please don't refer me to people and tell them that it was 4K." They understand the value. Now does that sound like something you could do?

Drigo:

I got the gist of it.

Chris:

Okay. So the gist of it is you're going to listen to this again and then try that script role play and see how it works out for you, okay?

Drigo:

Will do.

Chris:

All right. Nidhi, do you have any thoughts on this?

Nidhi:

Well, yeah. So something that came to mind too, Chris, and I'm curious what your thoughts are, is, if that particular client [inaudible 00:19:16] discounted the services for something that I've been able to do before is, agree upon being the choice for future projects. So gave a discounted rate, but it also meant that I was going to be doing six additional workshops at that discounted rate and that amount of money coming through is significantly higher than one workshop at my standard rate, right? So that was another thought that came to my mind is, potentially, leveraging it that way. But I wasn't sure what your thoughts are.

Chris:

Yes, I actually brought up a different point and I want to talk about that. So Drigo's approach here is, "I want this client, I'm renegotiating myself because I want to give them a discount because I need to get started." Right. And a lot of the creative people that are listening to us are probably in a similar camp where you're just trying to get started, you want to do packaging and you only mostly do logo design. Or you do logo design, you want to get into identity design or branding. So each time you go into a field that you don't have any evidence that you can do, you're going to have to make some concessions. You can work on your individual kind of spec projects, some side hustle stuff, or you can give some of it away at a discount and look at it as a marketing expense for you and your company.

But when a client comes to you and says, "Look, Drigo, we know. We heard from Mr. And Mrs client that you did this video and we want the same thing. They told us it was 8000 bucks." So first of all, things are going well for you already. And then they say to you, "But we don't have $8,000. That's the problem. We only have four. How can we make this work?" That's when you do what you're talking about Nidhi, which is, "I really can't take this on for that, but we can get creative. Before I say no, let's try and figure out a way to make this work." And then they say, "Well, what do you have in mind?" And you say, "Well, do you have more projects to work on that you can prepay for?" They're like, "Well, yes. So we have three more videos that we need to make later this year or middle this year, what would that look like?"

Okay. And then you just negotiate that part and say, "I can do four videos for you at 6000, not at four, but I can do them for 24K instead of $32,000. But you have to pay half upfront now." So you have to get some commitment. The reason why I say this is because people promise you future projects and then you'll give them the discount today and then you never hear from them again. So not only did you not get them amount that you wanted, but you had a promise and then you can't even enforce that. So I need to get some kind of agreement in writing and I need to get some of that money up front because otherwise, they could just totally disappear.

Nidhi:

That makes total sense. Absolutely. Yeah. And that would be such a loss, right? Because now you're losing out not only in terms of the opportunity to perhaps leverage that relationship to build other connections, you didn't ask for that, right? You asked for something different and there's no guarantees, if you don't get it in writing, so that makes total sense to me. And I do think that there's a place, especially early in your career where you perhaps don't charge the full fee in order to build the portfolio and get the repertoire down so that you can leverage that then to be able to get more of the gigs that you want. So yeah, just really appreciate this conversation. Thanks.

Chris:

All right. Anneli, what's up?

Anneli:

I was wondering your advice there to Drigo, did you just mention to ask for referrals to different... That was the suggestion, right?

Chris:

Yeah. So when Drigo was approaching it in this hypothetical situation, he would anchor high the $8,000, he would say then, "I'm willing to do it at $4,000." But you'd never want to make a concession like a price concession without asking for something. It's the give-get principle.

Anneli:

Yeah.

Chris:

In order for me to give you something, I have to get something. Otherwise, they think that's an imaginary inflated number and you're just pumping it up, so you have to ask for something.

Anneli:

I totally agree. And the thing was, when they give their other contacts, I think that's great. No one is also going to know about that, so no one can see it, which is a great thing. But I wanted to add, because I think we can actually ask for more things when we give as much discount as that. So maybe, you want to add more things to that list what you actually want in return, so that was just my suggestion. I think about something that I don't ask about so often, but it's really valuable is you want case studies to your website, really good case studies.

It takes some time to write a good case study with someone, so if you can have that from them. Maybe you even do an interview, like talk to them, record that on Zoom so you can share that too. Maybe they do a video testimonial that you can share in your social media, for example. So I think there could be actually a list of things that you can ask for, especially if they pay 4K instead of eight for example. So, I wanted to add that.

Chris:

Yeah, absolutely. So all of you can write down a list of things you can ask for. Now remember I just want to be very clear about two different things that are happening so we don't conflate the two. One is you want to give your project away for less money, but you don't want it to be a problem in the future. All right, so imagine prior to this you're already going to give it for $4,000. So anything that you want to ask, let's just create a list and you can ask for it. And something that Anneli said is you want great case studies. You can't ask your clients for a great case study because you write the case study. You're asking them for a testimonial or a review on a site that other people look at, that is important. So just make a list. "I want a video testimonial from you, I want X, Y, and Z." And you have to caveat, "Only if I hold up my end of the bargain."

Because clients are going to be very reticent to agree to something, prior to you actually doing the work. Imagine if you brought your car in for a repair or service work at the dealership and they're like, "We're only going to work on this if you give us a positive review." Well I'm not going to do that, I'm not going to do that. Why would I do... I'm not going to agree that. So you have to say, and this is really interesting because you're already going to do a good job for them. You're going to say, "Well, I'm extra motivated to do a great job for you because I know that, according to this agreement, you'll only write the testimonial. You'll only give me a referral if I do a good job." And so most people are going to read that. "That sounds fair to me." Okay?

Anneli:

Mm-hmm.

Chris:

The give-get principle is very simple, whenever you're in a negotiation with someone and they want to reduce the price, you cannot just say yes, you have to get something back. If you don't, they're going to feel like they can just keep driving the price lower and lower and all your prices are fake. Even if you want to say yes, ask for something, ask for a longer deadline or ask for a shorter window for feedback. Ask for something, ask for more money up front. So if they're like, "You know what? I want to pay you $4,000 for an $8,000 job." This is when you don't want to give them the price discount. Well you could say, "Well, I don't really want to do that and I can't do this more than one time, but if you pay me 100% upfront and only limit this to two rounds of revisions I can consider it. Does that work for you?"

So every time you give something, you have to get something back. Just remember that. Otherwise, the other person is going to feel even though they got the upper hand in the deal that they could have asked for more. Let's do this. Let's move the mic around a little bit. Oh, I see Mike, let's go.

Mike:

Yeah, so let's say you do web design for 4000 and customer calls and goes... You want to get 4000 but you'll end up doing it for 3000. Just how to not sell yourself short before you even really talk to them.

Chris:

I see there's some self negotiation that's going on?

Mike:

Yeah. In your mind, you're ready lowering your price before they even ask kind of.

Chris:

And what's driving that? I'm curious.

Mike:

I guess, just you want to pay bills or you don't want to lose the customer or you don't want to wait for another gig a week or two. Kind of just not have enough profit kind of sometimes.

Chris:

Okay, so this is mostly a mindset question, right? You're not always sure about yourself, so the way that you compensate for that is to lower your price just to make it easier for them to say yes, right?

Mike:

Definitely.

Chris:

Okay, what could you do? Okay, so we're talking about an intrinsic belief and the easy thing for me would be just to tell you believe in yourself. But obviously, if you could just believe in yourself, you wouldn't be up here asking this question. So let's move this away from an intrinsic thing. Like extrinsically, what kind of external things would have to happen for you to just like, "You know what, I am worth that." Like for example, if I was published in a national magazine, if I won this award that mattered to people in my industry, I won a Webby Award, I won an Awwwards Award. What could happen outside of you that you can definitely point to and say like, "I'm Adobe certified. I'm an Apple certified genius." Is there anything externally that could happen where you're like, "You know what, I'm worth every penny that I want to ask for."

Mike:

I think good case studies would probably help.

Chris:

Okay, so if you had good case studies. Okay, what else?

Mike:

I'm not too sure, really.

Chris:

Testimonials from big name clients.

Mike:

Yeah.

Chris:

I want you to get really creative, right? And each and every one of you, you probably should do this because I'd love to just tell you how you can start to learn to believe that you're worth whatever it is that you charge so that you don't have to self-sabotage and negotiate against yourself when it comes to pricing your projects. So what I down testimonials because Anneli was helping us out with that one good case study, also an alley-oop from Anneli. Anything else that you can think of? Did you study this in school, what you do?

Mike:

I think, Niching down would be better being better strategized or whatever. More niche in a way.

Chris:

Okay, more niche. I mean a lot of people will say this to me though and that's why I bring up school. Sometimes people say, "Well, I didn't go to a fancy design... I didn't even go to school at all." So one of them could be just to get a degree, a certificate of completion or whatever, or to at least train under two or three people that you really like. So there's a shortcut for that. You don't have to go to two or four year college program, you could just reach out to those people that you think are amazing and say, "What's it going to take to do six weeks of coaching with you?" And you just pay for it and then maybe that'll bolster your confidence. But see, so when it's internal we have no real way to measure if we've good enough. So sometimes this is a strange strategy here, but it might he be helpful to have an external measurement that way you can stop this negative.

Nidhi:

I think that ultimately when we're feeling insecure about our abilities and what we're bringing to the table, I know at least personally, it has really helped me to feel like a master at something by seeking the support and getting the help. And so the certifications are a big piece of that. But I do think that also from the internal mindset element, also being able to deal with some of the negative self-talk because it's really easy for us to invalidate ourselves, count ourselves out. When other people who may have half of the skill that we do have twice the ego and they're charging two, three times more than what we are. So we don't also want to take ourselves out of the game before we've even hit the starting line by invalidating our abilities. So I think it's a combination, right? The intrinsic, the internal and the external worth, they're interdependent on one another.

But ultimately, what I have found with some of the people I work with is that no amount of external success convinces them internally that they are good enough. And then that's where you know, have some limiting beliefs and you got to do some work around, where did that originate from? Because I have a feeling that there was probably some point in your life, when you were younger, where you may have felt similarly. And it's probably tied back to that if it's a continuing problem after you get the certifications. I hope that that makes sense.

Chris:

It does. Thank you. I'ma throw us over to Anneli who has her hand up. Anneli.

Anneli:

Yeah, I think certifications can be really good, but I also think that a lot of people they trust... If you have a proven framework or a process that you can show that you work through and you can just tell who you've been trained by. So it doesn't even have to be coaching, it could also be like, "I follow this process, I followed this framework." It stands for quality and that builds trust, so that's another thing.

Chris:

Wonderful, great add there, Anneli. I already mentioned this, but if you got press, if you have social proof, if you've been featured on prominent websites that people know you, like win an Awwwards Site of The Day or you are featured on Behance and you can get one of those badges, anything that can bolster your confidence, I'll take right now. There are things that you can do, you can look at national surveys of what people charge at your level, in your city or state. And that could tell you, "Here's the baseline." So at least you know, with data, that it's okay to charge this much. You can also join user groups where people of different skill levels who work in your industry and your niche, maybe they can disclose what they're charging. So you're like, "Oh. Well yeah, the market's $12,000 and I'm sitting here trying to negotiate down from four to three. That doesn't make any sense."

The best kind of social proof I think you can get are the actual results you get for existing or past clients. So when Anneli talked a little bit before about case studies, having a baseline before you start and knowing what the delta, the difference between where you started and where you're at with your current clients is a great way to tell yourself, "I actually do make a difference. It's not just a feeling." So for example, prior to me getting involved in redesigning this website, average time on site was 30 seconds, we increased it to four and a half minutes. Bounce rate was 75%, I've reduced it to 43%. So those are quantifiable things that can be measured, that should be part of your case study, not just the design. And so the more of that, that you can have, the more I think you'll start to feel confident about it.

Now, these external measures I think are temporary there, we'll call them like training wheels. Okay. We all want to learn how to ride a bicycle, we don't want to fall down. So you have training wheels so that you can grow in your confidence but you don't want to rely on them solely. It's just a way for you to jump start it, so if you can start to do that. The last thing that I thought somebody would say really quickly, but no one has said yet, but if you had more clients, if you had a wait list so that you wouldn't have to worry about this. So fancy restaurants that work by reservation only and it's a six month wait list, it makes you desire working with that person even more. And so what we have to do is we have to increase the number of opportunities relative to our capacity to do the work.

And so you have to really start to learn how to play the marketing game. I know that's not what anybody here wants to learn unless you're a marketer, you don't want to hear this on a Sunday. That I run a creative practice, I have an employee count of one. Now Chris is telling me I have very little time to do anything, let alone take on another thing. But you all have to learn how to market, you have to learn how to do sales. Without those two things, I don't know what kind of business that you have. I know you don't want to hear this, but I'm going to speak truth to you right now. And I was like you, for a long time, very reluctant to hear this because I just kept thinking and telling myself, "If I'm better at my craft, all my problems will go away." Some problems go away, but not the major ones. So I'll just put a pin on that there. Mike, are you okay with this?

Mike:

Yes, very good. Thank you.

Chris:

Okay, thank you. I'm going to move this over to Angelique.

Angelique:

Hi. I wanted to just comment real quick on what you were talking about. The last point that I wanted to just add is that a lot of us have a starving artist type of mentality coming into this type of field. So it's really hard for us to set pricing or to hear someone go like, "$4,000 for a website." And they're going, "Gosh, I can't afford that." Right? And you're like, "Yeah, me neither." And so therefore instantly, like he was saying, before you even go into it, you're already talking yourself down on pricing based off of where what you value, what you would pay for.

Greg:

Time for a quick break, but we'll be right back. The Futur with Chris Do is supported by First Republic Bank. Have you ever experienced a relationship with a banker who is available to answer all your questions even by phone or email? Doesn't exist, you say? It does at First Republic. At First Republic, everyone gets a personal banker who's ready to sit down and answer your questions no matter how complex. And did you know that First Republic's commitment to extraordinary service extends beyond its clients? First Republic is committed to strengthening the communities it serves through meaningful partnerships with innovative nonprofit organizations. To learn more, visit firstrepublic.com. That's firstrepublic.com. Remember FDIC, Equal housing lender.

Speaker 10:

Angi's List is now Angi. And we've heard a lot of theories about why.

Speaker 11:

I thought it was an eco move, fewer your words less paper.

Speaker 12:

No, it was so you could say it faster.

Speaker 13:

No, it's to be more iconic.

Speaker 14:

Must be a tech thing.

Speaker 10:

But those aren't quite right. It's because now you can compare upfront prices, book a service instantly and even get your project handled from start to finish.

Speaker 14:

Sounds easy.

Speaker 10:

It is. And it makes us so much more than just a list. Get started at angi.com. That's A-N-G-I or download the app today.

Elise Hu:

When should we go into the office?

Tonya Mosley:

And how do you network when you're working remotely?

Elise Hu:

On WorkLab, the podcast from Microsoft, we explore how work is changing. It's hosted by me, Elise Hu.

Tonya Mosley:

And me, Tanya Mosley on WorkLab. We hear from leading experts on the future of work. Economists, technologists, researchers.

Elise Hu:

CEOs, psychologists, neuroscientists.

Tonya Mosley:

Authors, behavioral scientists and more.

Elise Hu:

Find out about productivity, paranoia and how it's disconnecting managers from employees.

Tonya Mosley:

And learn how leaders can inspire the rising Gen-Z workforce.

Elise Hu:

Join us as we figure this out together.

Tonya Mosley:

Follow WorkLab on Apple Podcasts, Spotify, or wherever you listen.

Greg:

Welcome back to our conversation.

Chris:

Before we splinter into the seven different levels of sales mastery. And we're we started at the bottom, which was, "I want to offer a service to a client or a prospect and I want to do it at a discount. And the reason why I want to do it a discount is because I want to get this project under my belt so I can trade this project for other things." And now we're moving into higher levels of sales mastery. And I just made up that number seven and I have no idea how many levels there are, but a big mindset shift is Mike, OC Mike, was having this question about, "Well, how do I get away from this mindset where I'm undercharging and I'm talking myself out of things?" Most of that conversation was about how I felt about my work. And I want to bring it back to where Drigo was, which was what's valuable to your client.

Because here's the thing, okay, I move my mouth, I make money, sometimes I do it for free, but it's not really here for me to tell you how much that's worth. So when business owners call me up and they book me for a session, some of them have a lot of money and some of them don't have a lot of money, but each one of them gets to make the same decision. "Is the amount of money that I'm going to give to someone worth less or more than when I'm going to get back?" A transaction happens when both parties, the buyer and a seller see intrinsically greater value in what they're getting than what they're giving, otherwise, you wouldn't do the deal. So when someone books you or they pay you that $4,000 for your website or $8,000 for your video, they've already made the decision. Their problem is much bigger than this, and if you can solve this they're out ahead.

So rather than us focusing on what we do, how hard it is, our equipment, our creative process, if we spend more time talking to the client about the problem they're trying to solve and if it's a big problem, the four or 8000 or the 16,000 or the $200,000 thing that they're going to spend is tiny compared to what value they perceive. And this is where authors like Blair Enns or Ronald Baker will say, "It's a moment where it's a double thank you, where you thank them for giving you money so that you can run your agency and feed your family. And they, genuinely, thank you for the service you provide because they can move on to the next problem and they can grow their business." So what we want to do is we want to make sure that we understand what their problem is versus what it takes us to do. Back over to you, Angelique.

Angelique:

Okay, thanks. So you had said, "Show them the results that you got for other people." However, just because for instance, I create a brand design or I produce a video for them and I give them this thing, this is where I spun from photography and graphic design or videography into marketing. Because I could never show the results that video produced for them, because there was something else that I couldn't control as far as the results that they received, right? There were things there that, I could almost hand them a golden egg and it would fall flat because they didn't know what to do with it or because they didn't plug it into the right system or a machine for it to be able to work for them. And therefore I don't get any results. I created this great video for them, this was a powerful video, but they didn't do the right thing with it, therefore, I don't get any results. And that is frustrating as a creative.

Especially, in regards to trying to produce some sort of results. If you are only one piece, one cog in the wheel, you almost become like... They become the clog in the wheel and you are now just at the mercy hoping that they have a good marketing team or that they understand marketing to be able to use your tool and that you now become a part of the overall success, right, the overall results. And this is where I had to go in and I had to start learning marketing. I understood they did not know how to use these as tools. So therefore in order for me to claim any kind of results, I had to understand how to help them push that forward. But then again, that poses another problem because now you're offering another service or now, you're having more discussions about where is this going to be used and how is this going to be used.

So I'd like to kind of talk about that part a little bit because I think that it's great when you have a website, obviously, you can log traffic, but some of these other things that we do as creatives kind of just stop when we're done. And where would you measure results from there if you're not plugging it in or assessing or considering it as part of a bigger marketing campaign.

Chris:

There's a lot of things that you brought up, Angelique, I'm going to try to address. Some of which I agree with, some of that might have a slightly different opinion on, okay. And so it's 2022, if you do something that can't be measured, change what you do. Everything that you do needs to be something that you can measure or you need to do something else. Because what we're saying is what we do matters, to what, to whom? We have to be able to measure it somehow. And because something is difficult to measure does not mean it's impossible to measure. It just means we have a lack of imagination. This going to be hard for you to hear because I think we have been sold an idea that what we do is feelings and emotions and we can't measure those things. Yes, you can. People can measure the audience satisfaction to a movie, to a restaurant, to a product.

Why can't they do that with you? And when a client has a successful result, there's probably a hundred different factors that led to that result. Now you can't claim all of the success and all of the reason as to why they're successful, but you can say you are a part of that. I'll give you an example to Angelique's point there, which is there's a brand of soap targeted for men. It's called Dr. Squatch. And I watched their video campaign and their video campaigns were hilarious. It has hundreds of millions of views. So the agency who came up with that, who wrote those things, who produced them, who cast the characters, who produced these viral videos to help them become a multimillion dollar brand, they can say, "Well, before we started they had $4 million or $2 million in sales and now they have tens of millions of dollars in sales."

And most of us could agree that, that probably had a big contributing factor to this. But what if when the soaps arrived that they were terrible and that the customer service experience was terrible? Well, the whole thing would fall apart. So another person could argue, "Well, the marketing got us the initial leads and converted, but it didn't keep the customers and without that we wouldn't be multi-millions. And if we didn't deliver good product, we wouldn't get hundreds of thousands of positive reviews." And I think that's okay. And that expression, "It takes a village to raise a child." It takes a village to run a successful company. And you can just say, "I was part of this." So when a client says, "I need your help with something." You need to ask back and not accept that whatever they're asking you to do is actually going to solve a problem.

And then you're going to ask them questions like, "How will we measure success of this? What is the baseline?" So now we're going to learn how to speak the language of business, not just the language of design and art. This is critical. So even for something as hard to measure as a logo, when a client asks you, "I need a new logo." "Okay, great. What problems to solve?" They're like, "No problems." "Well, let's not do this." "Well, I didn't say that." "What problem is it to solve? What are you hoping to do?" "Well, if you have a really nice logo, because I hate our other logo, we could sell more T-shirts." "That's something I can measure. What else could it do?" And then they're going to go and list through things. And if they can't list anything, I warn you against doing this. Do not do this. And I heard this from Ronald Baker, I also heard this from Blair Enns, and this is coming from the medical practice, "Prescription without diagnosis is malpractice."

So when the client says, "I need you to do this." You're like, "Great, let's do this." And the whole thing falls apart. Like Angelique was saying, you give them the materials, they do not apply it to the right thing or it's the wrong thing to solve altogether, and no results are achieved. I think that's a form of creative malpractice. You accepted money to solve a problem you don't understand and you're just going to do it for the money. So if that's what you do, then the results you get will be what you get.

Angelique:

That's good.

Chris:

Okay. Drigo, what's up?

Drigo:

I went through a very similar problem, being in video production to measure results. And kind of what Chris said was that you identified a problem is how you going to measure video as someone that's only doing a production. And for me, when I realized that, I did a deep dive into learning YouTube. YouTube's a huge play for anyone that's doing video. So for me, learning YouTube, learning how to optimize videos for my clients to know when they're looking up that business and it's appearing number one on YouTube and then they [inaudible 00:47:26] collaborated that to appear number one on Google as well, was a great way for me to measure their success and be able to show that to other business owners.

So you identified the problem is, how do you measure that? And it's just going deeper because a lot of people that I compete in my market, against for in video, they don't know anything about YouTube. And what Chris talked about, what's important to the client. And for most of the clients I work with, what's important to them is to appear number one on Google because that's how they get most of the searches. So when you produce a video that appears number one on YouTube, which is owned by Google, that has a great number of success for them. But like I said, identify a problem and then find a solution for it.

Chris:

So you guys know this, if any of you have a YouTube channel, there's really rich analytics. You have things like retention, views, watch time, and how well you rank organically on search results. This matters, right? So you just need to find something that matters to the client and ask them how they will measure success. If they can't say, "It's your business to know what kinds of things that you do and how it could be measured." You can suggest, "Would it matter if your retention went up? Would it matter if you had a higher click through rate? Or could you put a link to this video that was trackable that every time that was hit, you can see that least people touched that link." Now that would be the end of your responsibility, right, Angelique. It's like your job was to get more visitors to the site.

Since you don't work on the website, you have no control over that. So you asked them, "What would be successful." They're like, "Well, we're only getting two visits to the site from the video." "What would be successful?" "If we got a hundred clicks from this video campaign and each new client is worth $10,000 to us? That's a lot of money." "So I can't guarantee that there can convert, but I can work on this thing so that it does get you the clicks or the visits to your site as you had outlined. I can control that." And that's successful. So when you're writing your case study, we increase traffic to site from two to 100 in 30 days and that's what we sell people. All right, back over to you, Angelique.

Angelique:

Yes. I also think that the psychography or learning their audience is really important because a lot of people don't understand that part either. And they're asking for something that they like, they're asking for something that they prefer. This happens a lot in branding too, I'm sure everyone in the room can resonate with this. Their brand wants to be a reflection in the essence of them and it has nothing to do with who they're trying to target or sell to. So they struggle with making these decisions. And so being able... YouTube is a great tool, especially for this, is just understanding all of the information that goes into profiling for their target audience so that you understand how to make decisions within your piece, even if it's just your piece, that it all leads to the same place. But again, I think that's where I've had to let clients go when they refuse to do this and it causes problems.

Because I go, "Well, there's no point. It's kind of a waste of time for me to help you because I'm not really helping you. I'm just charging you money for something that is not going to work. Because it's not going to go the right place, the right people aren't going to see it. And this is really more for you. And if that's the case, then let's let that be the goal. But if this is really for your business and we have another discussion to have." So I just want to encourage everyone that just because you're a creative doesn't mean that you can't assess data and that all of this is important to how you create and what you create. Back over to you, Chris.

Chris:

Nidhi, is there something that you wanted to say? Just curious.

Nidhi:

Well, the needs assessment is something that I do with every client I work with. So I'm really trying to streamline a process where, of course, it becomes a conversation and I kind of think about it, that intake of, okay, so really getting down to the core of what the challenges are. And before I ever even sell a solution, I need to really make sure that it's a good fit. And I've had to learn that sometimes that means saying no to certain clients because it's just not the right fit. And so in terms of measurement, I think that doing that initial needs assessment. And then after any talk that I give, I make sure to give a follow-up survey and I schedule a short meeting or at least have a back and forth email conversation with the person who booked me for it just to make sure, "Hey, how did this resonate with your audience? Is there any feedback that you want to give me?" Et cetera.

And I think that that is ultimately how you hone in your craft and it gives you some concrete information on which to go off of. So those are a couple of things that I do.

Chris:

Thank you very much, Nidhi. We're going to move on to [inaudible 00:52:17] Hawcon and then Aditi, and then Phil. So Hawcon, what is your question?

Hawcon:

Hi Chris. Great conversation so far. My question is, what's the best or most effective way to price your service based on outputs in your experience?

Chris:

Okay. So you're probably referring to either Ronald Baker or Blair Enns on this. So there are essentially three main ways to price... Actually, it's more than that, but let's just say there are three main ways to price. You can price something based on inputs, that's basically time and materials, what it costs you to make. And it's usually done hourly and it's an estimate. And then the output is, "I want to build you a website, I want to make you a logo." So you are charging for the output. And the third way to price something is the outcome. What impact does it make on your business, right? So you're talking about outputs, what has been your challenge thus far about pricing for outputs?

Hawcon:

No, the challenge probably has been in not conveying the value of the outputs that I offer. And recently I read the book Pricing Creativity by Blair Enns, and I'm now moving into doing three option proposal instead, when I'm offering these different options in my business. So yeah, I was just curious to hear your experience in regards that you said in the Pocket Full of Do, that you've been pricing based on outputs for a long time. I just wanted to hear what your experience about how to go about it and how the most effective approach would be with that.

Chris:

Yeah, so I want to make this work for you. I can sit here and tell you how we did things all day long and it would probably help very few people. Because unless you're in that same position with that kind of market and the skill set, it's going to be hard to relate to. If I understand this correctly, your photographer, right?

Hawcon:

That's correct.

Chris:

And what kinds of clients do you work with?

Hawcon:

I work with advertising agencies.

Chris:

Okay. Do you specialize in any particular area of photography?

Hawcon:

Yeah, I specialize in people and lifestyle.

Chris:

Okay. Well for you and the way that you price photography is pretty straightforward, and pretty well established. Are you trying to do something different than what the establishment has done?

Hawcon:

What are you having in mind of the established way, just to be clear?

Chris:

Are you aware of the established ways in which you charge for photography?

Hawcon:

Yeah, I think I am. I'm just wondering what you're referring to. If you're referring to pricing in regards to the amount of images, then-

Chris:

[inaudible 00:55:01] No, I'm talking about usage. I'm talking about usage and rights.

Hawcon:

Yeah. Uh-huh. Yeah. Then it's the usage. Yeah, I follow you. Then maybe that's my challenge then in regards to how to communicate those different usage options and to communicate the value of that to the client. Based on that you're delivering a set of images, that usage is connected to.

Chris:

Yeah. So when you are a photographer and illustrator, typically when you're talking about fees, it's connected to how many impressions is this going to have? How many different media is it going to be used in print, outdoor? Is it going to be used on television or social media? And so we need to know that. And how wide is the audience? Is it just for North America? Is it just for France, parts of Europe? Is it worldwide? And all those things impact the price, but not really. It's just a way to kind of think about it. Is it a finite usage of time? It's only, "We're going to license this image for one year with the option to renew for one year." Is this a buyout, where they actually own the image and they can do whatever it is that they want? So those kinds of questions. So how many impressions, how long and is it exclusive? Is it non-exclusive? Those things can impact the price.

So you could say in your mind, "My image is worth $5,000." Let's just say it's worth $5,000 per image. And they say, "Well, it's not just regional, it's nationwide, it's national." "Okay, that price just went up. Now it's, in my mind, $15,000." And they said, "Well, it's just for a year." "Well, that's the 15... Okay." Or they say it's for two years, you might add another 5000. So you're going to say, "Now it's 20,000." And it's just through conversation, understanding how important or how pivotal it is to this campaign and how many eyeballs are going to see it. "We don't just want it for print [inaudible 00:56:53], we want it for social media too." And I go, "Okay, well I'm going to add it a little bit more for that."

Now, generally speaking, since photographers want to focus on the art and craft of photography, you should probably get a photo rep, someone who could handle the negotiations for you and actually get a lot more for it than you would be able to negotiate on your own. And if you haven't been able to get one, I think for you, at least the way I understand it, my priorities would be to try to get a photo rep, asap. Because they're the ones who shop your book around at different studios and agencies and they're the ones who are going to negotiate the contract, the terms of use. They will collect a payment and they'll bug the client when they're being late on payment, et cetera. So you get to just focus on your craft. Now is that an option available to you right now, Hawcon?

Hawcon:

Yeah, that's the long term plan. Right now I have to deal with negotiating and communicating this licensing options by myself, in regards to the position I am in the market right now. And I run into some challenges with that, the clients I communicate with don't want to entertain... To kind of go into the value of that usage. And they are maybe other competitors that are giving away this usage for much, much lower fees. And yeah, I'm just wondering if you had some advice about how to communicate so they see the value in that extended usage.

Chris:

I don't even think this is a value conversation. I think it's much, much more simple because like I said, the way that you price photography for advertising agencies has been well established for decades now. So I wouldn't try to go in and undo all that work that your predecessors had done. You don't need to reinvent the wheel as they say. Have you watched this episode with Andrea Stern on our channel?

Hawcon:

Yeah, I watched it. Yeah.

Chris:

I believe she went through the entire structure of how to have that conversation, did she not?

Hawcon:

Yeah, I remember some part of that, that's going into that. I'll re-watch that maybe that freshness up my mind about... Yeah. How to wrap my head around this.

Chris:

Yeah, because I'm looking at it here and the video's title... And I'll tweet it and then I'll pin it here so you guys can see it. Why You Need a Sales Rep, If You're an Artist with Andrea Stern. You're a photographer, she's a rep. We're talking about sales reps and photography. I hate to say it, but you should have memorized this entire part. The part that matters to you, not just, "I kind of remember it." I'm not a photographer. I've memorized the whole conversation. Yes, I was there when I interviewed her, but if you're a photographer, you need to watch this video right now and then you come back with me. Okay. So I think the problem with a lot of us is that there are plenty of resources that are already available to us. What we have to do is we have to study them and apply the principles and then when you get stuck, I can help you with a more nuanced part.

But I really think it's just like a client calls you is like, "Hawcon, we like your photography work lifestyle, we have a campaign for any X, Y, and Z." You're going to say, "Great, I just need you to answer a few questions." "All right, great. What is it?" "How many images are you thinking? Where will this be used in terms of the impressions? Different media?" "Okay, great. Great." "And how long are you talking about?" They're like, "Just for a year." You're like, "Great." And then you just send them a number. It's kind of like that. Do you think that you could be able to do that? Stop reading Pricing Creativity and all these other pricing books, they're for much more complicated things, I can really tell it's spinning you out of control.

Hawcon:

Yeah, yeah. No, I'm trying to take out the gold bits, in regards to what I do, but I have to let go of a lot of other information in that book. It was really good though, but I'm trying to focus in on what I need to focus on. Maybe the challenge here is that I've been trying to have this conversation with other clients that also are not ad agencies. And maybe that's also part of that challenge in that they don't get into that or don't understand the concept of the value of the usage because it's kind of only relevant to people that speak that language already.

Chris:

Yeah. So there's another person that was on our show, I'm going to find that episode too. She goes by the name of Little Patterns and I asked her, "How much do you charge for illustrations?" Surprise, surprise. Her questions were almost exactly the same as what photographers would ask, "How many impressions, how long? What are the usages or usage that you want? Is it exclusive or is it not?" And then she came up with a price. It's kind of like that. And how she determined that price. She just did it in her head. "I already knew. The more it's going to be shared with people, the more eyeballs that were going to be on this, the more it should cost." That makes a lot of sense. Now, whether or not they see value in that, that's another conversation. But this part of the conversation should be pretty straightforward, all right?

Hawcon:

Yeah. No, a 100% agree with you with that. I think that's... Yeah.

Chris:

Okay.

Hawcon:

I'm talking about the other side of the conversation where they don't see the value and that's a different conversation.

Chris:

Yeah. All right. So I'm going to move this over to Aditi. Aditi, the mic is yours. Go ahead.

Aditi:

In last company, when I was working as the logo designer, so they send us mail and I have some mail IDs of their old clients. That company no more exists, but I have some mail ID of old clients. So should I send them common mail related to my creative services or should I study their business separately, each business separately, and then send them mail?

Chris:

You're using a phrase that I'm unfamiliar with, which was common male. I would say in general, never send bulk email out, period. But if you want a client, how many clients do you need to have to change your life and your business? Probably three. So it behooves you to take the time and the necessary process and attention to focus on understanding their specific needs. You have a contact, that's all you have. You don't even have a right or permission to email them. So I would spend a lot of time trying to understand their business and tailor a very specific message to them with a really powerful, punchy subject line. And the first two sentences are probably the most important thing that you're going to need to write. I would not try to send them a really long email, but I'm not an email marketing expert. Not even close.

But email is just one thing. An email is valuable if you use it correctly. And if you don't, then you've lost the opportunity. The problem with emails is you can send it and you don't even know if they got it or if they opened it or if they looked at it. And so this becomes problematic. So I'm not sure if this is true, but a friend of mine who uses HubSpot, which is free, you can craft a little PDF and you can send the PDF with a specific tracking code to each person that you send it to so that if they opened it, what page they got to, where they stop looking at it, et cetera. And at least, then you have some data to help you to see if a follow-up is necessary or if there was some points of confusion.

So for example, if you send somebody an eight page PDF to talk about something that you can do for them, and every one of the recipients stops at page two, it's telling you, you have a problem on page two and you can fix that problem. But just having the email, that's just the beginning of the process. And then what I would do is just look at how you build a relationship with anybody, especially someone that you want to have business relationships with. I'm not sure if that's the entirety of your question or not, Aditi. Feel free to comment back.

Aditi:

Yes, yes. That was it. Thank you so much.

Chris:

Okay, wonderful.

Aditi:

I got my answer. Thank you so much.

Chris:

Thank you. Okay. Okay, we'll move over to Phil. Phil, what's your question or comment?

Phil:

How's it going, Chris? I have a question. Hopefully it's simple. How do I go about having a conversation with a potential client to get paid for some ideas up front, like a small fee, as kind of a test drive before a potential larger engagement? And because I'm kind of new to this, I don't want to hit them with a big number right off the right out the gate.

Chris:

I'm trying to figure out how this question is different than the other two or three questions around this exact same thing. Could you phrase this a little differently for me please?

Phil:

Let me see. I think it comes down to what should I be focusing on in the actual conversation with the client to set up a project that's almost starts with a checkpoint based thing. So it might be a larger engagement for, I don't know, tens of thousands of dollars, but how do I communicate the value of potentially doing an initial discovery phase for let's say like five grand and just getting paid for that work and then being after this engagement is over, no strings attached. You don't have to work with me, but if you want to, we can kind of continue. But is that different or did I get everything I need to already?

Chris:

All right. So is your question how you sell discovery for money?

Phil:

I don't know if you need a little bit more context, but that really what it comes down to... But it's not necessarily discovery in a brand strategy world. I'm an illustrator, so it's kind of like I want to start to create some of this world visually that somebody's trying to make digital stories or like a comic book or a graphic novel or something like that. I want to work with them because it could be a really awesome project, but I don't want to do it for free. But I don't know if we're going to be a good fit.

Chris:

Okay. I think I understand the question. Is the question, as an illustrator, how can I begin working with my clients so they get a sense of where this is going to go creatively while getting paid, but while minimizing the risks of the client? Is that your question?

Phil:

That is absolutely my question.

Chris:

Okay, great. Thank you. So you're looking to do a phased engagement. So when you propose anything to the client, and we'll make this big round numbers to make it easy scale up or down depending on your business and your experience. Okay, everybody? Let's say you want to sell a $10,000 engagement to someone. For some people here that would be a really big engagement. And for some people that's not even the down payment for the job. $10,000. And you already know ahead of time because you know your clients and you've been in business that this is always the thing that derails the whole conversation because it's such a big number for them. So the way you make it easier is you break it apart into discreet phases. This is why it's called a phased engagement. So a good number is an odd number, like three or five. So if you say, "The way I work, the way I'm able to do what I do is I have three discreet phases."

"Phase one, we'll call it world building exploration. Phase two is ideation, and phase three is just refinement and then delivery." Let's just say that's what it is. So you can say, "If it makes more sense to you, we can attack this a phase at a time with no strings attached. If I don't deliver what it is that you are expecting, you can just kill it. So I'll minimize the risk to you." I would only suggest this after you get a pricing objection, not before. Unless in your past, that's all they do is object over the price and they're like, "We can never pay this. This is ridiculous. I'm taking on too much risk." At which point you can say, "I typically charge $10,000 to create this artwork. But in the past some clients have found it that they're assuming more risk than they want to. So since then, I have as an option for you just to begin with phase one, this is what you're going to get, this is what it's going to cost."

Now, oftentimes I like to front load the conceptual work because to me the conceptual work is the hardest part. Meaning even though it's in three phases, I'm not going to divide it in third. So it's not going to be $3,300 and $33 for each phase. I'm going to do it probably $5,000 for phase one and then 3000 for phase two and then 2000 for phase three. I'm trying to get the money up front because the hardest part of the work is there. Once you get into refinement and finishing it, and it might be the opposite for you where that's the hardest part, well, weigh it differently so that part's more expensive. This protects you from getting taken advantage of where they can just give the idea to someone else and they can execute it for the cheap, remember, because the transaction at that end of that face is complete and you're saying, "You can do with it as you want. I've taken your money, you've paid me for it, so do it as you wish."

And here's the interesting thing, many years ago I worked with a director, his name is Robert Howes, and we worked on some music videos together. And he was at a point in his career where he was writing treatments for bands that they'll love, but he couldn't shoot them all. And so, one of the bands came up to him and said, "We want to work with you." And he says, "I can't so booked up right now." And they said, "What if we hired another director and just paid you for your treatment?" And he thought that was the most wonderful idea ever because prior to that point in time, he wrote the treatment as a cost of entry. You write the treatment, if the band likes the treatment, they hire you and you make the music video based on their budget.

So that put in this idea, "My ideas are worth something that I can actually charge for them." And your ideas are worth something and you could charge for them as well. You just have to learn how to break that apart and have that conversation with your client. Phil, do you have a follow-up question?

Phil:

I don't have a follow-up question because that really answered it well. I know typically, don't like going for kind of a phased engagement. But the only reason I think it makes sense in this particular case is because this company that's developing this product, they want to create a story around it to try to help sell it in the long term, but they haven't put together their money yet. They haven't raised the funds that they need. So I think phasing it out means that I can get them to potentially spend a little bit of money as a checkpoint thing and we can grow as they build the funds and then maybe I have a better chance of working on this project. So that's my kind of thought process, but usually I like to have the money conversation, get out of the way, rip off the bandage.

Chris:

Absolutely. Just ask for what you want, get paid and then don't have to get so creative with pricing, right?

Phil:

Thank you so much for your help.

Chris:

You're welcome. All right. Let's see here. I'm going to ask first, my co-host if they have any final questions or comments or anything that they can add to this conversation. Go ahead, Anneli.

Anneli:

Yeah, I just want to add really quick thing because this came up a lot when I was on the client side, but also on the agency side. I know a lot of creatives sometimes because you don't want to ask, you assume that you might get a testimonial if they're really happy, the client, or if you can use it in a case study without asking first, for example. But a lot of people work as freelancers for different agencies. And then you need to be very clear about asking the agencies so you're not like white labeled and work for them because then they are going to use that case study or a testimonial and it's not sure that you can do it. So I think that is just something that I wanted to add to be clear about that, to have that conversation up front so you don't assume anything. I think that was it.

Chris:

Yes. So what Anneli is talking about is the work-for-hire agreements. When a client hires you under the work-for-hire agreement, they actually own everything. They own the IP, they own the artwork, and you probably will have to sign an agreement about when and where you can show this work. It has unfortunately, become the practice of a really large, big brands like Apple and other companies where if you work on their projects, you can't show it, you can't mention it, you can't do PR, you can't talk about it, nothing. They want complete control over it. And we want to work with Apple, we want to get paid what Apple pays people and we agree. And so you can't show any of that work. And so just be careful. This is why it's helpful for you to have your own contract where you explicitly write out, "We have the right to use the work that we created for PR purposes in known and yet to be invented media."

And we have that in our clause, in our contract, and those of you that use our legal kit will have access to that and you could just use that. Now oftentimes, if a client has you signing their contract, there's a line in the contract that you need to be very careful and pay attention to. The line of the contract says, "This contract supersedes all other agreements." What that means is that, it nullifies anything else before that you signed. So this happens a lot in our industry. So we send over our contract, our proposal, they sign, they send the check over and then they send over their contract and we're kind of like, "Wait, wait, wait, what's going on here?" And you'll see that line there. So if you sign that and there's conflicting agreements between these two documents, the one that the judge will go to is the latest one that signed with that line, "This supersedes previous agreements."

So you got to look out for that and you got to have to make sure. So if working with the client's more important than your ability to show the work, you just sign the document and you call it a day. But if you need to show the work and they don't allow it, you're pretty much saying, "I don't want the job, I can't do this job." And if you're a big enough shot, they'll probably strike that from the contract and let you do it. But oftentimes, unfortunately, they have all the leverage and all the power and you're one of many thousands of artists they can hire. So they kind of have us over the eight ball on that. But for the majority of the time in which we create commercials and music videos for advertising agencies, I would say 98, 99% of them, we have the right to do whatever we want with the project to showcase it under the guise of marketing and PR. This is critical. Okay. Angelique has a statement or question. Go ahead, Angelique.

Angelique:

I just want to say this is such a great topic, white labeling, because that is where I have spent the majority of my tenure in marketing and video editing is I was almost treated like a secret weapon. As long as they could keep me underneath their umbrella, right, then I couldn't go out there and market my services, which is one way to look at it. The other way to look at it is I had access to projects that I would've never have gotten access to on my own. So I just want to reiterate that, that can sound like a really bad situation. It could sound like a really unattractive option. It could sound like it's problematic, it could sound like, "Stay clear." But sometimes you get access to do things that you never would have before. And I think that it also leads to Drigo's original question around, and kind of the sentiment was like, "How much time do I put into something? If I'm spending more time on something, I was really familiar, it was going to take this much time."

And then the other piece to that is, what's the scale of charging for your time? But I think that in situations like that, I think it's worth diving in to be able to do something new, even if it's like, "Wow, this took way more time." But you learned so much along the way and you got access to data that you never would have before. You got access to systems and the way that a company process or the process that they go through within their teams, you get access to so many more things that is so much more valuable than being able to claim the results. So just get out there and keep going and then do it again on your own. I just want to encourage everybody after hearing that because it could sound kind of a stay-clear type thing. That's all I wanted to say.

Chris:

Yeah, I'm glad you clarified. I did want to say something. So today you are the independent contractor and you work for agencies and design studios. So they give you work. And the reason why they can stipulate the terms and conditions is because they've done the hard work. What hard work is that? Marketing and sales, the thing that I said you need to learn how to do. And until you do that and you have a direct relationship with a client and they get to dictate the terms. And you might be grinding your teeth like, "Dang it, I'm doing this work, nobody even knows I exist. I can't mention, I can't talk about it, I can't show it. This sucks." Until one day you do that thing that you hate to do and you do the marketing and the sales, and now you're a team of 15, 25 people running a successful agency.

And you know what? You have more opportunities than capacity to do the work. Fantastic, you're charging a lot of money and now you need to bring on independent contractors. Guess what you're going to want them to sign? An independent contractor work-for-hire agreement. Why would you do that? Well, because you've built up your company in the last five, 10, 15 years. You've gone through the expense and the trouble of wining and dining the clients, paying for public firms to hype you up and to talk about you. You've done all the hard work you're supposed to do, and some young kid in a garage or a basement somewhere is going to say, "They did this project." That's not going to sit well with you, I promise you it's not. And then they start to go after your clients and they say, "Well, I did this." "Well, no you didn't. You did a small part of the bigger thing." And now the market's going to be confused.

They're going to say, "Acme Design Studios and John Smith, they did the same project. Who's selling the truth?" That creates all kinds of problems. So before you grind your teeth and want to throw rocks at people, just remember when you're a big, you're going to want your independent contractors to sign the same agreement that you don't want to sign today. So not only is this the way of business, but you'll be a hypocrite when it happens to you if you feel this way. And number two, Angelique is totally right. The reason why you took on this project in the first place instead of finding your own client is, "Oh, right, You don't have a client, you don't have access to this kind of work." So you're going to do it. And they get to keep the lion share of the money. They've taken the lion share of the risk and they've done the hard work.

Years of getting themselves into a position where a client of this stature in size would even be willing to call them. So you are most definitely in a case like this, a cog in the machine. You play your role, you learn from the experience, you see how they operate, and you use that so one day that you can do the same. All right, over to Nidhi.

Nidhi:

Oh, and I think that this applies, even to people that are trying to sell their thought leadership as part of their business, right? Is that you have to be so careful about your intellectual property. And something that I've noticed that a lot of people that perhaps hire you on board to be a speaker is really reading the fine print as to how long they have access and ownership. They should never have ownership first of all of your IP, but how much they have access to your intellectual property. So for example, one of the contracts a couple of years ago had a clause in there that talked about multiple years of being able to use my workshop. Like, "What? No, that's not okay. This is my workshop. I should be able to sell it and use it as I would like. And it's not fair for somebody to just be in perpetuity being able to access the content that is behind typically a paywall."

So what I've done instead is I redlined that in the contracts. I also have my own speaker contract now, but essentially it gives a time limit in terms of how long somebody has access. So it'll be maybe one month, two months at maximum, and then if somebody wants anything beyond that, they pay an additional fee to be able to continue to have access to the content. And so I just wanted to add that in. It's not even just for service based products, it's also for those of you who are trying to really sell the teachings and the learnings of becoming a master in your craft, that IP is also valuable and you have to protect it with everything you got.

Chris:

Okay. If you've enjoyed this kind of conversation about just me answering your questions about small business problems and pain points and challenges as a creative business, I'm more than happy to do this. Again, just let me know. Thanks everybody for jumping in, for sharing and participating. You guys were amazing. Thank you.

Greg:

Thanks for joining us this time. If you haven't already, subscribe to our show on your favorite podcasting app and get a new insightful episode from us every week. The Futur Podcast is hosted by Chris Do and produced by me, Greg Gunn. Thank you to Anthony Barro for editing and mixing this episode. And thank you to Adam Sanborne for our intro music. If you enjoyed this episode, then do us a favor by rating and reviewing our show on Apple Podcasts. It'll help us grow the show and make future episodes that much better. Have a question for Chris or me? Head over to thefutur.com/heychris, and ask away. We read every submission and we just might answer yours in a later episode. If you'd like to support the show and invest in yourself while you're at it, visit thefutur.com. You'll find video courses, digital products, and a bunch of helpful resources about design and creative business. Thanks again, for listening and we'll see you next time.

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