How to Deal with Last Minute Changes Overage

I pin you I wonder what's.OK, so Lauren, you have a clientthat likes to make changes,right?Correct OK.And you said that nomatter how many timesyou threaten to do something,nothing ever changes, right?Well, yeah, so it's aclient that's going onfor a couple of years now.They always haveconference shows,so I do collateral for them,for the conference shows,and I try to plan itmonths in advance.And I never hear anythinguntil like the last weekbefore they have to go to print.And so I do chargethem rush feesand they're alwaysfine with that.But it was more of just likea professionalism questionof is that actually a badclient, even though they'refine with the increased fees?no.Because how much do youcharge your rush fees?What are what's the rate?Probably not enough.Well, I know the answer, right?But how much do you charge likein multiple like normal double?Yeah what would that be?Is that an hourly double?It is hourly, but I have sincechanged to more project based,but I have not put them on.OK, so if you doa project thing,so if you need tochange it, it'sgoing to causethis dollar amount.How much correct?How much is that usuallyor what you plan to charge?Um, probably still doubleof the project, which is.Um, crash wants youcheap with everything.But if it's a safe placeto say these things,it's a safe place.Well, I was working with themas a freelancer before and sincechanged to a business, soI changed my my, my pricingstructure and I'm stillfiguring that out.But I was, I mean, beforeI was $45 per hour,so I would charge them 90 90.Mm-hmm Where do you live?Right now inIndonesia, but I wasliving in Austin,Texas, at the time, ok?All right, and then if youwere to do a project fee,what would you chargethem for an overage?Honestly, probablyonly 50 percent,because I wouldmark up the projectmore comfortably than thehourly rate, so $1 amount,would that be?So hypothetically speaking.I'm trying to think backon what I charge themfor, for a wholeconference package,I think it was around2,500 at the end of it.But again, that waswith my rushed fee.So probably with the rush, itwould be more 3,500 to 4,000.OK, Lauren.May I?Yes no, no, no,it's OK, it's OK.That's why you're here.And I'm here to help you.I'm going to try to drop mymost nurturing tone right now.OK, may I have yourpermission to divea little deeper into this?I can sense thatthere's some discomfortabout talking about money.Yeah, Yeah.Absolutely OK.Because I don'twant to go there.You're like, you don't dodon't do that to me right now.OK that's why Idon't want to say.Right, right.And I don't want toscare him anyway.If you guys have thenext question like,no, I'm out of here, just hangup on this call and run away.All right.So here's the thing,and you're goingto find out aboutthis, especiallyif you want to tune in latertoday and listen to Blairand I talk about this stuff.But your discomfortaround talking about moneyputs you into thisposition where peoplecan take advantage of you.So what we have to do is we haveto just get really comfortabletalking about money.What's your favorite color?I don't have one.I like a lot of colors.How about yourfavorite typeface?You go to typeface.Do you have one right now?Probably even here.Even here.Perfect you see howyou said that to meand you didn't really hesitateand there was no apologizingor anything about that.Yeah, that's a toneyou want to have.OK OK.And if you can't feelsafe here, boy, Ineed to do a better jobbecause this is the placeto feel safe to talk aboutmoney and don't worry too much.So here's the thing.Here's the thing thatI know about this,even though you might feel alittle uncomfortable saying,oh, I charge too little. $45 anhour, which it is too little,it might be double what somebodyelse in this group is getting.Mm-hmm So one of the thingsthat we have to feel good aboutis just, hey, this iswhere I'm at tomorrow.I'll be better.And that's totally OK.We're on a journey, and nobody,at least from my point of view,is going to judge youinside this group.Mm-hmm OK, so we'regoing to feel comfortablewith each other.OK, from here on forward,I'm going to help you.OK, so now it doesn'tmatter where you live.Let me just tell yououtright right up.It doesn't matter whatyour cost of livingis, it doesn'tmatter what it costsyou to make something is whatyou need to do is to chargean international rate.OK as I understand, are youlike an independent contractor?No, I just starteda small agency,so I have about fourpeople that I'm working.Oh, wow, OK, so do youdo you work with localsor you work withinternational people?I my team is all indonesians,but all our clientsare American or Canadian.OK, so what's the spreadbetween what you chargeand what you pay them?OK well, this is thefirst profitable month,so that was really good.What we charge, we mostlydo WordPress developmentand we're still, Ithink, freelancer rates.So we do 3,000 to $10,000for a WordPress website,which will be anywherefrom 10 to 50 pagesbecause we have big,annoying clients.OK, and then the cost todevelop is significantly lessmy front end developercosts about $600 per month.OK, so what's like to do thesame three to 10,000 website?What does it cost you to make?So if it's a 3,000website, it will probablycost to make half ofthat 1% is your margin.Mm-hmm OK OK, so, sobig, complicated websitesshould not be causingthree to 10,000.I think you alreadyknow that and we'regoing to get you out of here.OK, so you have someexisting clientsthat have known youfor a really long time.And so you're kind of stuckwith these old rates, right?Not well.This is where I getdifficult, and thatwas where my phonecall last week playedin is I have people inAmerica who are sellingthese projects for me andare marking me up 15% to 50%So you have salespeople, soyou were like white labeled.I see.So typically, we fit withinthe client's budgets,but it's still higher thanwhat I'm actually charging.I love this.So yeah, yeah,you see their bid.I do not.Do you ever ask for it?I do not.I just say what, I'mcurious about it.Sometimes if I'mworking directlywith the client,then yes, but if I'mworking with my salesguys, then they justdo all that themselves.They ask you for abid, you submit itand they do whatever theydo, and they gives youthe money, right?Correct I'll tell you somethingthat this is fantastic newsbecause you now know that you'reat least 15 to 50 percent,at least under marketvalue, at least now.Since you've never seen it,you have no way to verify this.Also, correct.OK so I'm curious whyyou're not that curious.This is really strange tome because I want to know.I don't want to knowwhy, because it'sthe guy that's mysales guy, I'veworked with him for 12 years.We've freelancedtogether and now he'skind of acting as representationin America for me,and I'm just kind oftrusting him to dohis thing, to get the clients.And then he trusts us to doall the project managementand the development, right?So asking about the money isn'tabout trust at all, is it?Just curious.That's all.So do you think by asking himI'd like to see the budgetand how he estimates the projectthat you feel like that'san expression of distrust?I don't think so,but I think my thingis more of what is thebenefit of knowing his markup?Oh, so you can learn howto build your own projectsin the future withyour own clients.The relationship, you thinkit'll hurt the relationship.Perhaps becauseand I think this iswhy I'm verysensitive with pricingis because people getaggressive with me.And so I have raised myprices on him before,and he basicallytold me upfront,like, don't do this again.And so I definitely easilyget bullied into lower pricesand offering the samehigh quality results.We say that one more time.Yeah, because nowyou're digging, huh?I've been diggingthe whole time.Well, I've been dancingaround it a little bit.You're a good dance partner.Thank you.But soon the song'sgoing to end.You just need to let youknow that, OK, we can onlydance so long.You're going to quarter me.I know.Be cornered.Run straight to it.Let's run right to the corner.No, I well, it depends onhow deep we do want to go.I want to go to the deepest.OK, that's fun.I struggle withcodependency, and so part of.Not necessarily myvalue, but maybe it'shard to put my foot down andsay, no, I am worth this muchso.I've tried raisingprices before,and he told me upfront, just like, no.And it was small.It was $45 to $50per hour, and hewas like, pleasedon't do this again.So I'm overly sensitive.What's his rationale?I don't know.I never cried.never asked.OK so I think I canhave a really, reallydeep conversation withyou, but since thereare 54 peoplewatching, this may notbe the most comfortablething for you.I'm comfortable withthis kind of stuff,but I just don't want to dragyou into those waters, ok?And let me try to do thisin a way that is supportive.That doesn't put you intoreally strange, emotional state.Is that ok?Sure Yeah.OK so I likegetting people, too,but I understand what's that.I don't mind gettinguncomfortable.Oh, really?OK, well, everybody,fasten your seatbelts.I've been given permission.This is it.Oh my God.Yeah are you ready?Oh my god, OK.We're going to needlike the five pointharness here on this one seatbelt or just a regular helmeton your helmet, yourflame retardant suitand put in the harness.OK, because we'regoing to go there,I'm going to throttle it now.So here's how roll it now.OK, so so Lauren.Yes in the interest of timeand all because I just feellike this clock ticking on me.Real bad, right?So I want to get real deep.So just take a deep breath.And let's just go there, ok?I'm just going to go there, ok?Usually whensomebody says to me,like they have ahard time saying no,there is probablya parental figurethat's dominated youfor a really long time,and now you're just living outyour childhood over and overagain.Doomed to repeatthis, it could bestarted with maybe yourfather or your mom or an oldersibling.And then it continues on.And I don't know if you'rein a relationship right now,but then, you know, areyou in a relationship?I am in a relationship andit is a healthy relationshipfor the first time in 10 years.OK, so yeah, so you'velearned somethingabout the patternsof your behaviorand who you acceptinto your life.So when what we need todo is what we need to dois we recognize when somebody isexhibiting these kind of signsand say they're not accountablefor every other relationshipin your life, but you need tobe able to kind of recognizeit and respond toit appropriately.OK so when somebody isbeing nasty and mean to you,I think you have one oftwo options in your mind.One is to fight or to justlet them have their way.Is that about right?OK there is a thirdoption, or actually there'sa myriad of otheroptions in between there.One that doesn't sound likeI have to fight and onewhere I don't haveto give up on myself.And it's really,really important.So if a client isbeing not kind to me,right, I have tojust acknowledge thatwhat am I feeling right now?I'm feeling like not valued.I'm feeling bullied.Even and where I go isI get really submissiveand then I hate myself later.And I know thatabout myself, right?I'm speaking fromexperience right now.I'm not projecting onto you.I'm just saying,this is how I feel.Sure so through sometherapy, I learnedhow to speak up and dosome business coaching.I learned the languagethat I can usethat feels comfortable for me.That doesn't feel likeI have to fight you.Mm-hmm OK so there'salways one thing that youcan do if the conversationgets really uncomfortable,you should say I'm feelingreally uncomfortable right now.I'm not sure howbest I can proceedwithout gettingemotional about this,so I suggest wejust take a break.Is that ok?All right, so can you.Can you say somethinglike that in the future?Mm-hmm Yeah, that'sa really good punt.You know, you can punt.So I'm trying to helpyou with self awarenessand mindfulness is thatI'm feeling uncomfortableand that's OK for you to say.And none of this accusesthe other person.So it's not a fight.Mm-hmm I'm feeling this way, soyou use a lot of I statements.I don't know if I can continuewithout getting emotional.I'm not saying this isyour fault right now,but I need to take a break.Mm-hmm And so then they getto decide, and a lot of peoplelike, whoa, I didn'trealize that in my language,I'm sending thesesignals to you,and most kind andreasonable people say, oh,I'm really so sorry.I'm really sorry.Let me just take a step back.Tell me what I said thatmade you feel uncomfortable.You can say, well, when I sayI'm going to charge you thisand you negate my worthby saying, don't everdo that again.That's where it gets reallyuncomfortable for me.Mm-hmm Because you'reputting a limit on how muchI value my own work.And I think based on themany people I've spoken to,I'm really undervalued inthe marketplace right now.Mm-hmm And I don't wantto think bad thoughtsabout that you're possiblytaking advantage of me.I definitely don'twant to go there again.OK, so if you've taken anyof my communication courses,what we realized isthis is that we'restressed out thinking aboutwhat it is that we want to say.So we think to sayit is stressful,but it's actuallythe opposite to notsay what you think is wherethe stress is coming from.Because once you sayit, you're cleared.Right, so if there's a kidwho's sitting behind youin the movie theater or onan airplane that's constantlykicking your chair forwardand you're like, god, that'sso annoying, it's so annoying.But I'm not goingto say anything.You're all stressed out.Right, but if you actually standup and say, hey, I'm so sorry.But when you kick that chair,it's really disrupting meand I'm just tryingto get some rest.Would you mind stoppingthat behavior, please?And now you've said it.And if they keep doingit, then you justcall a flight attendant overor you go out of theaterand you tell whatever the guywho ushers you into the seat,it's like, you know,somebody is reallyinterrupting my ability toenjoy this film or this flight.I've asked them verynicely and they've not.They've been nonresponsive.And then it's gone again.Have you have you worked witha coach or a therapist at all?Yes, back when I was in Americadid the co-dependency group,I had a life coach and Ihad a therapist at the timeand then since then I'vejust been practicing it.OK, so there's acouple of thingsthat we know when youwork with somebodyelse as a subcontractorwhere your white label,they should make the mostmoney because they'redoing the hardest part,which is to get the work.I don't mean to say like,I'd like to see the bid.It's less out of trustthan it is out of curiositybecause I want to learn, howyou're doing what you're doing.OK, now the fact that youare a little reluctantto ask becauseit's saying to youthat you don'ttrust this person,it's because they've alsocreated that feeling in youdon't ever ask me thosekind of questions, right?Whereas we work withsubcontractors, anybodythat wants to know,I just tell themif they charge me 200 thousand,I mark it up to a million.I just tell them Igot nothing to hideand I don't want to start arelationship that one that'snot transparent.Mm-hmm I just say,give me a fair biton what it is, do you thinkthis is going to cost?And then I will addwhatever it is I needto add to run this project.OK OK, now when you'redealing with your own clientsand you want tocharge an overageand you don't want to dothe work charging hourly,it's the worst way to get intoa situation because I mean,until you start to get intostratosphere hourly rates,it's not enough to dissuadesomebody to make a decision.You are, as far as I can tell,so affordable that they don'teven care if you charge themlike a whole brand new rateagain.So let's just say you charge$3,000 to a website, right?And you're like, youknow, you guys are makingbig changes for the hour.It's causing me a lotof stress and my teamwere scrambling to getthe work done right.And I'm going to chargeyou another $3,000.OK they just signed the check.And if that happens, it'stelling you your original pricewas way too low.Mm-hmm Right, so I imaginethat for some of them,they were thinkingthey were goingto pay $30,000 sothey can changetheir mind 10 times before theyget caught up to their budget.right.OK so I think you need to juststart your baseline at 10k,so have you been practicingsome of the price bracketingstuff we've been talking about?Very slowly in a way whereI feel comfortable, Yes.OK, so you have a peakperformance partner, Lauren.Yes, I do.OK, let's practice with them,practice over and over againuntil it becomescomfortable for you,OK, who's your peakperformance partner?OK, Abby lemon.OK, perfect.She's a great peakperformance partner to have.I think I need youguys to practice.I want you to startsaying to get meto you, to your websitefor the kind of thingsthat I know you need.It's going to be somewherebetween 30 to 10,000.OK OK, I need you justpracticing it over and overagain until it becomesso comfortable with you.It's like saying avanir.Helvetica fruit digger.That's that's what I wantyou to be able to do.OK OK.What are you going to say?I didn't want to just.OK I think I've watched a videobefore of you answering this,and I don't know the answer,even after watching the video.My gut reaction to that is,well, if it only cost me 1,500to make this, howis that necessarilyethical to charge four times,five times, 10 times as much?You have theethical debate, huh?I do.I unfortunately too.OK Uh, OK, so you thinkwhat it costs to makehas some relationship tothe price that you chargethe client, right?Is that right?I mean, that'swhat you're saying.Yes, let's take a position.Let's take a positionhere one way or the other.It's the middleground, the murkinessthat gets us all messedup because some days wefeel like this and somedays we feel like that.So we can't beconsistent with ourselvesbecause we don'tknow where we stand.You know, if you're ademocrat, you're a Democrat.If you're Republican.Just be one.It doesn't really matter.So, and you just needto ask you right now,do you think whatsomething costs hasa relationship to what youpay for it cost to make?And should it be that way?Praying and knowing the.OK, so you don't.OK, so then there shouldn't beany issues with ethics, right?Because look, I charge clientsat minimum 30,000 an hourto do a strategy session withme for one day's worth of work.And then you can say,well, where does the cost?How do you justify?Chris, I don't know.It's just a day of my time.What does it cost me?Well, I go to their office,so there's like $1.50 worthof gas.I show up.With markers and paperand sticky notes,and that has acost, it's 50 bucks.$200 Let's just say I'mbeing generous here.And I bring an assistantwith me usually,so he she has an hourlyfee to me, I suppose,prorated for their salary.So how can I justify charging$30,000 for the strategysession?How would you do that?How would I do that?How can you helpme justify that?Yeah help me.Don't that.Um, because you're Chris,and you're awesome.OK, well, thank you very much.You're awesome.You're offering more valuethan just anybody else thatshows up with sticky notes.OK, so it's notbased on the materialcosts of making itright, because weknow that's not a lot.Right right.So I had this debatewith somebody in Poland.So I asked them this.A lot of people havethe same issue of ethicsbecause they thinkit's unethical.And all you have to do islook into the real worldoutside of your ownlens and your own lifeand look at how many thingsyou buy that probablyhave no connection.To what it costs, likewhen you go to Disneyland,it's $120 a ticket for a day.Are you sitting therethinking really, Disney, itcost you that much to allowme to enjoy this experience?Whether it is one personhere or 100,000 people,it still costs you that much.Really?not really.All you have to do is lookat cars, clothing, evenyour cell phone that you use.You can look up the truecosts of what an iPhonein terms of rawcomponents and seeif you're getting goodvalue on that or not.So here's the debate.The debate is thiswho gets to determinethe value of somethingthe buyer or the seller?Who gets to determine the value,something the buyer, the sellerto support yourargument, the seller,the seller gets todecide the value.OK, great.Well, let's see.OK, so it's midnight here,by the way, but all day?Hang in there, ok?Yeah so there's a differencebetween price and value.OK there's a big, bigdifference in price and value,and people mix thesetwo up all the time.So you, as the sellerof creative services,gets get to determine what youget to determine the price.It's going to cost you$10,000 to do this website.That's the price I get todecide if that's a value for me,if I don't think it's valuablefor me in terms of what I get,I don't buy.I see the value the buyer getsto determine the value period.So what you needto do is you needto help themunderstand the valueand then therefore theprice seems like a bargain.And you should do the work.OK so no matterwhat price you set,the buyer doesn't want to buy.They don't see the value.No problem.You can't force them to buyunless there's literallya gun to their head.They will not buy unlesstheir life depends on it.They will not buy.So you get to setthe price and theyget to determineif it's valuableand when you're the buyer, youget to do the exact same thing.So I think there'sa Dry Bar concept,you know, like women liketo go and have the hair,I guess professionallystyled and it'sthey just use a blow dryer.So it's called a dry bar, right?Now, that seemsridiculous to me.To sit-in a chair, you'regoing to pay somebodyelse 50 or 60 bucksto blow dry your hair,then I'm going to cut it.Mm-hmm but you get todetermine that value, so.So that means thatout of 100 people,only a certain percentagewill see value in that.You see, even thoughthe price is fixed.And so they do afixed price and youget determine it'svaluable for me,so all the customers seevalue in that and that's it.So this whole idea ofethics and surroundingyou or anchoring yourselfto what it costs to makeis ridiculous.Has nothing to dowith that whatsoever.You get to determine yourprice and somebody willdetermine it's fair for them.OK, by making sense to you rightnow, if not fire back, Yes.I need to put this issue on.OK, so here are somekey takeaways for you.You need to practice throughyour peak performance partnerAbby and talk about price.You need to drasticallyratchet up your price.You really do you'reundervalued in the marketplace,especially if it's 50 to 100pages for us, a 50 to 100page website is going to beat minimum 60 70 thousand,if not more.It's a lot of work.And then when you getto the overage point.Right, so youthreatening to chargemore has almost it'sinconsequential amountbecause the original amount was.So low to begin with.OK and it's a painin the butt, and youdon't want to run in circles.You don't want to run in place.So doing work up to90% and then having allchanged the night before.You could just refuse to do it,or you can charge them $25,000and they'll say, OK,we still want it done,and then you could be happydoing the work, think team.I'm super sorry about this,but we got to do the work.I'm going to giveeverybody a $500,500 bonus.Thank you.You could take better care ofthe people who work for you.Yeah and you can thinkabout it like that,so some people have a hardtime fighting for themselves,if you just imagine thosefour people who work for you.Those contractors takebetter care of them.