Jonathan Stark

The Ditching Hourly Guy • I help solo consultants make more and work less w/o hiring • Get pricing tips by subscribing to my mailing list

[Jonathan Stark @jonathanstark]

Client: "While your working on the checkout flow optimization, could you add a carousel to the home page?"

Developer: "How will that contribute to the stated goal of the project?"

Client: "It won't. Our competition just added one and it looks cool so we want one."

Dev: "I'll add it to a v2 list and we can revisit once we declare victory on the current project."

[Jonathan Stark @jonathanstark]

WE’LL LET YOU KNOW

How would you feel if you walked into a lunch place and asked, “How much for a ham sandwich?” and the clerk replied, “Well… _probably_ about five bucks, but we’ll let you know after you finish eating it.”

Now imagine how your clients feel when they ask, “How much will this project cost?” and you reply with, “Well… _probably_ about fifty thousand dollars, but we’ll let you know the final price when we’re done.”

Here’s the thing…

With hourly billing, nobody knows the price up front. The price is revealed over time. This feels AWFUL to the client. They have to make a big risky purchasing decision based on _an estimate_. And by the time they find out whether the estimate was good or bad, it’s too late to do anything about it (other than call in the lawyers).

This is good news for you if you happen to be amazing at delivering business value with your particular skill set because it means that there is a big delta on any given project between the client’s perceived risk and your perceived risk.

In other words, you can take a big risk off their shoulders but only add a small risk to yours. This adds a lot of value to the client, without adding a lot of cost to you.

If you calculate your prices based on value, this means that you can potentially set a premium price that the client is likely to accept.

Which beats the pants off of hourly billing.

Yours,

—J

[This is a repost of my daily mailing list. A prettier formatted version can be found on my website. Go to jonathanstark dot com and click on ARCHIVE]

[Jonathan Stark @jonathanstark]

@sheldonrampton Having an agreed upon outcome for the project gives the seller a valid reason to refuse changes that would jeopardize or delay completion

[Jonathan Stark @jonathanstark]

@sheldonrampton This gets both buyer and seller on the same page with regard to the objective

[Jonathan Stark @jonathanstark]

AWARENESS VS ACTION

Are you trying to increase awareness?

Or would you rather inspire action?

It’s an important question.

Because they’re unrelated.

Yours,

—J

[This is a repost of my daily mailing list. A prettier formatted version can be found on my website. Go to jonathanstark dot com and click on ARCHIVE]

[Jonathan Stark @jonathanstark]

HOW DO YOU PRICE STRATEGY WHEN THE PROJECT SCOPE IS UNDEFINED?

A Youtube subscriber asked:

> How do you actually cost a strategy meeting itself if there’s no clarity the size of the project (thus you’re unable to do value-based pricing)

I understand where this question is coming from but... you can value price anything that is worth something to someone.

In the case of a strategy session, you would first determine roughly what the client thinks the strategy is worth by asking the client questions like:

* “Why not proceed with the project without deciding on a strategy?” or
* “Why do a strategy session at all?” or
* “Why not NOT do a strategy session?” or
* “What do you think would happen if we move forward with the project without a clear strategy in place?”

Once you know about how much value the client places on strategy, you can set a price that is a fraction of the value.

If you can execute the strategy session profitably at that price, then you’ve got a fit. If not, a strategy engagement doesn’t make sense.

Yours,

—J

[This is a repost of my daily mailing list. A prettier formatted version can be found on my website. Go to jonathanstark dot com and click on ARCHIVE]

[Jonathan Stark @jonathanstark]

“WHAT DO YOU DO WHEN A PROSPECT EXHIBITS RED FLAGS?”

Yesterday’s message about prospects who exhibit red flags prompted questions from several people.

The questions were mostly all some variation of this:

_“What do you do when a prospect exhibits red flags?”_

I didn’t understand the question at first, so I asked for clarification.

The clarifications surprised me.

They were asking how I _corrected_ the red flag behavior so I could move forward with the bad (for me) client.

Erm... that’s not what I do.

If someone has red flags, I don’t work with them.

It wouldn’t be fair to them (because there’s someone out there who would be a better fit) and it wouldn’t be smart for me (because working with a bad client is a recipe for disaster).

Of course, this doesn’t help you if you HAVE to take on a red flag client for cash flow reasons.

So... tomorrow I’ll start talking about how to set yourself up to be able to say no to bad (for you) clients.

Stay tuned!

Yours,

—J

[This is a repost of my daily mailing list. A prettier formatted version can be found on my website. Go to jonathanstark dot com and click on ARCHIVE]

[Jonathan Stark @jonathanstark]

TINY FOLLOW-UP TO “PUBLIC SPEAKING TIPS”

Yesterday, you got a pretty long email from me about public speaking. I don’t want to clog up your inbox with long messages (especially if public speaking is not your thing) so today I’m going to keep it short:

My friend and javascript demigod Remy Sharp (@rem on Twitter) wrote in contribute two more tips:

----

_Two tips I always share with new speakers asking for advice:_

* _Where you’d find yourself saying “ummm” just hold it in your head instead. The silence serves as a small break, and it’s always longer to you (the speaker) than the audience._
* _If you talk allows for questions, always have a question of your own in the bag. This means, when you the speaker ask “does anyone have any questions” and there’s a sea of silence, you wait a good 30 seconds in your head, then say “OK, one question I get quite often is…X”, this way you’re warning the audience up to questions and they (hopefully) feel like their question may not be a silly one (compared to the “one you get often”)._

----

Remy is a veteran of the speaker circuit and even runs the #ffconf javascript conference. So, suffice it to say he knows what he’s talking about and I completely agree with his advice.

Yours,

—J

[This is a repost of my daily mailing list. A prettier formatted version can be found on my website. Go to jonathanstark dot com and click on ARCHIVE]

[Jonathan Stark @jonathanstark]

MY “LOVE/HATE” LIST

This past Wednesday, Bradley Hamner interviewed me for the Above the Business Podcast.

I’ll share the recording when it comes out, but something came up while we were talking that’s worth calling out.

Bradley’s worldview is that hiring people is the only way to grow a business, and my worldview is that hiring is the worst way to grow a business.

(I’m generalizing, but this is close enough for the purpose of this email.)

He began delicately prodding my position - like an entomologist who had just encountered a nine-legged beetle - when he asked something like:

“Why do you think this?”

And my answer was something like:

“Because having employees means having meetings, and having meetings is on the HATE side of my LOVE/HATE list.”

Bradley:

“What’s a LOVE/HATE list?”

Me:

“As I go through my day, I notice when I love doing something and when I hate doing something, and then I add it to my LOVE/HATE list. Then I periodically review the list and optimize my life to do less of the stuff I hate and more of the stuff I love.”

Bradley:

“Wait... is this just conceptual, or do you have an actual list?”

Me:

“It’s an actual list.”

...which is true. As of this writing, it has 28 items on it.

Judging by the look on his face, he was shocked by this.

This is a total guess, but...

I don’t think he was shocked that I keep an actual LOVE/HATE list.

I think he was shocked that he had never thought of keeping one himself.

Here’s the thing...

I wonder how many self-employed people don’t realize they can design their life and business to do more of what they love and less of what they hate.

It’s kind of the whole point of working for yourself, no?

Yours,

—J

[This is a repost of my daily mailing list. A prettier formatted version can be found on my website. Go to jonathanstark dot com and click on ARCHIVE]

[Jonathan Stark @jonathanstark]

NOTHING IS FREE

This email didn’t cost you any money.

**But it is NOT free.**

Reading it requires you to _spend_ time, and to _pay_ attention.

And to many people, time and attention are worth much more than their money.

So...

If you’re creating stuff and putting it out into the world - and you want to be able to keep doing that - then you better try REAL hard to make sure that whatever you publish is worth more to the consumer than it cost them to consume it.

Even when it’s “free”.

Yours,

—J

[This is a repost of my daily mailing list. A prettier formatted version can be found on my website. Go to jonathanstark dot com and click on ARCHIVE]

[Jonathan Stark @jonathanstark]

SHOULD I OFFER A GUARANTEE IF I AM ONLY 80% SURE I’LL SUCCEED?

Earlier this month, I sent out an email about offering different types of guarantees.

A reader wrote in with a follow-up question about whether to offer a guarantee when you’re not 100% sure of success:

### Reader:

Would you advise the same for service-based businesses that offer an outcome like a 20% increase in conversion rates?

### Jonathan:

Are you asking for yourself, or is this a hypothetical?

### Reader:

Myself

### Jonathan:

Gotcha.

If you were picky about your clients, how confident would you be in making a promise like:

“I’ll increase your conversion rate by 20% or give your money back”

?

### Reader:

I’d be pretty confident, say about 80-90%, if they follow my process and have some prerequisites in place.

### Jonathan:

Very nice!

So, in theory, this means that for every ten clients you worked with, you’d end up refunding a max of two of them.

But offering the guarantee would likely allow you to charge significantly more than you are now.

Let’s say you’re charging $1000 per client now, with no guarantee. With ten clients, you’d bring in a total of $10k (and one or two of them would be disappointed with their results)

If the guarantee allows you to close deals at $2000 per client, then you’d bring in $16k ($2000 times 10 clients minus $4000 in refunds) and everyone would be happy.

This is a lot of guesswork on my part, but that’s the general concept with guarantees.

### Reader:

Wow. I never thought of it like that. Thanks a lot, Jonathan.

### Jonathan:

Glad to help!

----

Yours,

—J

[This is a repost of my daily mailing list. A prettier formatted version can be found on my website. Go to jonathanstark dot com and click on ARCHIVE]

[Jonathan Stark @jonathanstark]

STOP WORRYING

Worrying more will not improve your odds of success.

In fact, it’ll probably increase the odds of failure.

But “life is full of risks!” you say.

Yes.

Assess the risk.

Make a contingency plan (or don’t).

Proceed.

Worrying is a waste of creative energy.

Yours,

—J

[This is a repost of my mailing list. The most up to date version can be found on my website every day. Go to jonathanstark dot com slash archive]

[Jonathan Stark @jonathanstark]

PROVE ME WRONG

_(trigger warning)_

What you do...

It doesn’t matter.

And even if it did...

You suck at it.

. . . .

. . .

. .

.

Now...

👏 PROVE 👏 ME 👏 WRONG 👏

### Here’s the thing...

The extent to which you’re upset by this message is an indication of where you’re at in your journey.

No judgement from me...

It’s just a mirror.

A check in.

If it made you angry, that’s normal. All you need to do is _collect more **objective proof** of the results you deliver._

If it DIDN’T make you angry, I hope you’re charging your clients a BOATLOAD for your assistance.

Yours,

—J

[This is a repost of my mailing list. The most up to date version can be found on my website every day. Go to jonathanstark dot com slash archive]

[Jonathan Stark @jonathanstark]

TWO SECRETS OF VALUE PRICING

Here are two things that almost nobody understands about value pricing:

1. In almost every case, you CAN’T guarantee the client’s ultimate desired outcome.
2. But if you’re good at what you do, you can almost always guarantee something that _the client believes will contribute to their desired outcome._

I’ll use myself as an example.

Let’s say my desired outcome is to double my annual revenue.

And let’s say you are an expert at growing mailing lists for thought leaders.

You can’t credibly guarantee that you could double my revenue.

Why?

Because no matter how good you are, I could do a thousand things to tank my annual revenue.

BUT!

If you are confident that you can double my mailing list subscriber count

AND

I believe that doubling my subscriber count would lead to doubling my revenue

THEN

You can set your _price_ based on my doubled revenue, but only _guarantee_ you’ll double my subscribers.

### Here’s the thing...

If a buyer is talking to you about the possibility of working together, THEY BELIEVE THAT WHAT YOU DO CAN CONTRIBUTE TO THEIR DESIRED OUTCOME.

If they didn’t believe that, THEY WOULDN’T BE WASTING THEIR TIME TALKING TO YOU.

So...

Price based on desired outcomes, but only guarantee the parts you can control.

Yours,

—J

[This is a repost of my mailing list. The most up to date version can be found on my website every day. Go to jonathanstark dot com slash archive]

[Jonathan Stark @jonathanstark]

WHAT THEY DON’T KNOW...

It’s easy for consultants to recognize inefficiencies in a client organization.

But pointing them out to a client often just adds stress to the client’s life because _what they don’t know isn’t hurting them._

Instead, focus on finding out what keeps them up at night - even if it is something that seems trivial to you - and help them fix it.

## Here’s the thing...

If you solve the problems your clients **know about** and keep a list of the ones they don’t, then when you’re done with their list, you can say:

> “Hey, I’ve noticed a few things while we’ve been working together that you might want to consider addressing...”

Once you’ve solved all of the problems that your clients have identified, you will have earned the right to suggest solving the ones they haven’t.

Yours,

—J

[This is a repost of my mailing list. The most up to date version can be found on my website every day. Go to jonathanstark dot com slash archive]

[Jonathan Stark @jonathanstark]

CUSTOMER VS CLIENT

The joke from yesterday’s Ditcherville comic hinged on the difference between a customer and a client.

Several folks asked me to go into some detail about the distinction between these two terms, so here we are!

Here’s a good summary from Perplexity:

> A customer is generally someone who buys a product or service in a mostly transactional, often short-term way, while a client is someone who engages in an ongoing, relationship-based use of professional or personalized services.

_(Thanks, Cliff!)_

In other words:

- Customer is more transactional, here-and-now
- Client is more personalized, long-term

So...

- If you buy something like a book, you’re a customer.
- If you buy something like coaching, you’re a client.

### Here’s the thing...

The idea of the comic - that the customer is always right, but the client isn’t - is best represented in the medical profession.

Doctors push back on their patients (aka clients) all the time because doctors have their patients’ best interests at heart.

And patients aren't typically medical experts so they are likely to ask for the wrong things.

Which is to say...

**You can’t tell your doctor to give you a triple bypass and expect them to just do it.**

That would be malpractice.

The same should be true of you with your clients.

Yours,

—J

[This is a repost of my mailing list. The most up to date version can be found on my website every day. Go to jonathanstark dot com slash archive]

[Jonathan Stark @jonathanstark]

IS THE CUSTOMER ALWAYS RIGHT?

The customer is always right about the thing they want.

But that doesn’t mean what they want is the right thing.

Yours,

—J

[This is a repost of my mailing list. The most up to date version can be found on my website every day. Go to jonathanstark dot com slash archive]

[Jonathan Stark @jonathanstark]

TWO WAYS TO UNCOVER YOUR NICHE

When it comes to niching down, the classic question is this:

> I know I should niche down to get more/better leads, but **how do I decide what to niche down on?**

This is a tough question because the answer cannot be found in the outside world.

It’s in your gut.

But what if you stink at listening to your gut?

Over the years, I have found that there are two questions I can walk a student through that will sometimes uncover a meaningful answer.

The first is this...

### 1. What do you want to be known for?

This question doesn’t always work but when it does, the answer will generally be a horizontal specialization (e.g., “I want to be recognized as the top SEO expert in the world”) or it’ll be some kind of a mission statement (e.g., “I want to teach 1B creatives how to make a living doing what they love”).

If I get an answer that I believe the student is genuinely committed to, then we agree on a strategy that best fits the objective, and start executing tactics that align with the strategy.

But if I _don’t_ get a concrete answer to what they want to be known for, I’ll move on to the second question...

### 2. Who do you most want to help?

If you know who you want to help, it solves a lot of problems for you. You don’t need to be a brilliant entrepreneur to be successful. Just use your expertise to help these folks get what they want.

This typically raises a few more questions (with my answers):

- “How do I know what they want?” Ask them.
- “What if I don’t have the expertise they need?” Get it.
- “What if there aren’t enough of them?” There are.
- “What if they don’t have a lot of money?” Package your expertise differently.
- “What if I can’t think of anyone I care about helping?” Well... maybe you should rethink the idea of running a service business.

Questions? Just hit reply!

Yours,

—J

[This is a repost of my mailing list. The most up to date version can be found on my website every day. Go to jonathanstark dot com slash archive]

[Jonathan Stark @jonathanstark]

WHY NOT BE PICKY?

Fellow list member Avi Marcus wrote in with an excellent perspective on my recent message about niching down _(shared with permission):_

> Right - niching down can be for any kind of subset of the market. It depends on what you’re optimizing for.
>
> If you’re optimizing for a specialty then you can charge more.
>
> If you’re optimizing for easier marketing and making more use of your domain knowledge in that field, then pick a vertical.
>
> If you want less emergencies and less stress, pick a group that is more relaxed and has less emergencies.
>
> If you want to have more fun and click with a certain kind of person, then only accept those as clients.
>
> Anything that is “I don’t need to be desperate, I can be picky about my clients” is one form of niching down.

I especially like Avi’s closing point.

I mean, seriously...

Why WOULDN’T you be picky about who you work with?

Probably because you’re desperate for work.

If that’s the situation you’re in, you might want to figure out how to decrease your desperation.

The Catch-22 of this is that the fastest way to stop being desperate for work is to start getting picky about who you work with.

Yours,

—J

[This is a repost of my mailing list. The most up to date version can be found on my website every day. Go to jonathanstark dot com slash archive]