How Do You Stop Charging Hourly and Price for Value Instead?

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Hi, I'm Kendra Corman.
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If you're a coach, consultant, or marketer, you know marketing is far from a perfect science.
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And that's why this show is called Imperfect Marketing.
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Join me and my guests as we explore how to grow your business with marketing tips and, of course, lessons learned along the way.
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Hello and welcome back to another episode of Imperfect Marketing.
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I'm your host, Kendra Corman, and I'm super excited to be joined today with Joel Miller.
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Joel runs an agency with his twin brother, and we're going to be talking today about positioning yourself on value, right?
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Pricing, things like that.
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And I'm looking forward to talking about this because I think this is one of the biggest issues that small businesses have when they're starting out.
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So welcome.
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Thank you so much for joining me today.
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Thank you for having me.
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So let's go ahead and um talk a little bit about how you got started.
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My twin brother and I uh own the Sky Floor.
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And we have always been sort of creating, I think we the entrepreneurial mindset was sort of in our blood.
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It's in our in our history.
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Uh our dad worked for himself.
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Our papa owned a store on State Street in downtown Chicago.
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And we were just like, all right, this is uh, I guess how the world works.
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And so it fascinated us from a young age that we could come up with something that people wanted and they would pay us for it.
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And it could be so many different things.
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So I think it was just sort of inevitable that we would end up in business together, kind of doing that long term.
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And so here we are, 17 years later, into our business doing doing that very thing.
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Let's talk about pricing, right?
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So I know that I messed up pricing for several years.
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We'll just leave it at that in my business because I was pricing things so low that I was working a ton of hours.
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I couldn't actually outsource anything because I wasn't charging enough for it.
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I wanted to provide a ton of value.
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I definitely was, but I was doing it at a price that wasn't sustainable.
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And that was making me feel more than burnt out.
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And I don't want to say the word regret, but I wasn't happy, right?
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I was actually resentful.
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I was resentful towards my clients for the work that I was doing for them, but I signed up for it.
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And that was just such an eye-opener for me.
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And so creating a pricing model that worked for me allowed me to actually make a living and grow my business to a point and where I didn't feel resentful anymore.
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So, how did you guys go about figuring out how to price and what lessons did you learn?
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Yeah.
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I mean, trial and error, really.
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Uh, with the error mostly being kind of probably similarly.
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We started off with hourly billing.
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Uh, you know, we had come out of doing some kind of retail-ish jobs and things like that.
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And you kind of just have this mindset that the world works on ours.
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And then we were meeting a lot of people who owned agencies and were running kind of the traditional agency model.
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And so when they come to us, they're like, can you do this website for us?
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Or can you uh design this?
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And what is your hourly rate?
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Is the first question.
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So you just get into this mindset, because that's what everyone else is talking about, that that's the way you have to price.
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But then after a while, you start getting much better at what you do, and and it means that you're more efficient and faster and quality is actually something that's really valuable, right?
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But instead, I'm charging less, I'm making less money from you because I can be efficient, I can do it well.
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That's just it felt inherently wrong.
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And so we started looking at the kind of the mixture of our business and going, like, do we want to, we will run out of time.
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I'm constantly saying that time uh is valuable, but it is not money.
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And I was so sick of it being money.
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So, how do I get out of that cycle?
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Well, I have to look at the value I'm providing and charge based on that and not just how much time it takes me to do things.
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One of my favorite stories is there was, I can't remember if it was a plumber or it was a contractor of some sort.
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And this guy had been doing his own repair job and he'd spent like 15 hours on it, finally calls someone in, fixes it in like 15 minutes, and hands him a bill for like$500.
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And the guy is like, It only took you 15 minutes.
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And he's like, Yeah.
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He goes, but the$500 is for the 25 years of experience, which I learned how to fix that in 15 minutes, right?
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And that's just so important to realize and to change your mindset around.
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So I think that that's that's very valuable.
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So talk to me.
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How do you position yourself for value?
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And I think that can be a really hard jump to make to even, I think a lot of us like have a mindset issue sometimes where we're like, am I even worth like this big number I want to throw out there?
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But the cheat code is actually the conversation you have with the potential client.
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Hopefully they know a little bit about you, enough to actually have told themselves you're worth talking to to begin with, right?
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I think I kind of we tend to run away from pure price shoppers because we're like, I don't, you don't know enough about me clearly yet for me to be talking with you.
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I'm not gonna just compete against five people.
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Not because I don't I like a little competition, but but but it's a signal to me they don't understand who we are yet.
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So you ask a lot of great why questions in the conversation.
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They'll actually give you the cheat code for your proposal that shows that you listened to them, that you understand where they're going, or that you help them answer that question.
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And then because you did that well, you can actually demonstrate that they will profit off of it.
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Like there's gonna be an outcome that you're providing that is worthwhile to the business.
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And so then it becomes up to them to decide if that's true.
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But if you've done a good job of figuring all that out and communicating that back to them, it should be a pretty clear yes or no equation for them.
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And but it's not about, it's not a judgment call on you anymore.
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It's their judgment call on if it's valuable enough for them.
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Okay.
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So I like that.
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So talk to me about the whys, right?
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So you're asking them why to get the cheat code.
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Um, tell me more about that.
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Yeah, I mean, I think every why question you can ask, and then ask whys on the whys, peel back the onion layers.
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I guess see if it makes you cry or them.
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I don't know.
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But if it's uh there might be some tears.
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Sometimes it's business therapy uh when you you start asking the right questions.
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But I think so many questions like that are important to you understanding where they're at.
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Why do you want to do this project?
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And then you wait, ask those questions.
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It can be, and there's no dumb questions.
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Ask dumb questions.
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If you feel like you're being a little bit idiotic because you can assume the answer, that's a great time to ask and shut up.
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Because what you're gonna find out is they some say something they didn't even mean to say, especially with the second or third follow-up.
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So why are you doing this project?
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Uh why now?
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I think that's a huge one.
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Why are you did you decide like you've been in business for 15 years?
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Surely this problem's come up before.
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Why are you talking about it now?
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You're gonna find a pain point when you ask that.
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I one I love is why why us?
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Why are you at why you're talking to us?
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If they wanted a website, which is some of our core work, uh, but we always do it with strategy in mind, why aren't you just going to Squarespace or Wix or any of the other self-service builders?
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And I have reasons why I think they shouldn't do that, but I want to hear what they think.
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And sometimes if you ask some of these questions the right way, not only do they give you so much information about or you discover information about what they're going through, and you can help walk them through that.
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When it comes to the why me question, they might actually start selling themselves on you too.
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Because they have to go, why is this person different from any of the simpler, cheaper uh options out there?
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So I just I love to do it like an interview, ask those questions, pause, and then ask follow-up questions that kind of dig to those next layers.
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I really like that because I mean, that's the way we should approach all marketing too, right?
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This with questions and curiosity, because everything changes on a regular basis.
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So I love that approach to it because it shows that you know your stuff, right?
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So when you started asking for premium pricing, right, when everyone's trying to commoditize it, um how did you start going about that?
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How do you get them off of the hour and onto the value of the package?
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The truth is that there's no simple off-ramp, I think.
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And a story that immediately comes up isn't it directly related, but my wife ran a photography business for six or seven years until we started having kids.
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And I helped her with all the mechanics of that.
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And so one season, we were we were getting a lot of leads, booking a lot of weddings.
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And we were like, we should be making more money now.
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So we doubled our prices.
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And I'm not kidding when I say that the leads went to zero.
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It was just pure crickets on the web form.
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And you're like, how do they even know that they shouldn't reach out anymore?
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And so about a month of that, and I adjusted it and we kind of halved it between where we were and where we wanted to go.
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And they started trickling back in.
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Now, the kind of fun part is that by the end of those six years, we were charging three or four times that price increase and having no trouble getting the leads to come in.
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So, what do I mean by why am I telling that story?
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Because some of these things are a journey.
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Now, I don't ever talk to anybody who's like, what's your hourly rate?
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It just doesn't happen.
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But we're talking to a totally different echelon of client now.
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And so sometimes, and that's I think what happened in the with the weddings analogy too, is that the types of people who had the budgets for the better, the bigger wedding package, uh know other people like that.
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And so we had to like ladder up a little bit.
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And so it's a process.
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And I think the same thing is true when you're getting out of that hourly.
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The people who are thinking of your services like a commodity, they probably know a lot of other people who are looking at the world the same way.
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And so you might have to go through a little of that tension for a while of like, okay, I just pushed a bunch of people away with this strategy, this way I'm doing it, but they're not a good fit for you anyway.
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Don't it's actually just another step towards more success.
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Don't, don't get too sad about it.
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I think.
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No, I think that that's really important.
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So thank you.
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Um, I love that.
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And I love the honesty around the fact that the leads went from, you know, a ton to zero because you're gonna get scared.
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Right.
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I mean, it happens, especially when you lose your first piece of business and you've been winning everything, right?
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Because you've been bargain basement pricing.
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Um, and it's gonna take a hot minute to adjust.
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So let's talk a little bit about AI, because I feel like AI has, you know, become just such a huge topic.
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I mean, I train on it, I teach on it, I leverage it, it saves me 30 to 40 hours a week in my business.
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Right.
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And so I'm packaging things on deliverables, not speed, because AI does make me a ton faster.
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When we're talking about AI and how fast things are moving, what's been your experience into how that works into the value or the pricing that you're doing with your clients?
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At the end of the day, it's still me that they're paying for, right?
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It's still my filter on it.
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So they can get onto any of these services too and ask certain questions.
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They don't have, though, the 17 years of experience running this for clients to know how to shape the outputs.
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They don't have uh though, sometimes the technical knowledge, even like I can obviously ask Cloud or GPT these days to make a pretty good landing page, but it's gonna just probably be the baseline of user experience.
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And it's certainly, if they haven't done a lot of work to hone and guide the context in their in their AI model around them themselves, it's not gonna know them that well either.
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So I can go in and do those things because I know how to operate it, uh faster than just the kind of the default and actually get something good out of it.
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I can make it a partner, but it requires me still, the human layer to be involved.
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So to me, I that's one of the biggest things is just it can speed you up.
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And yet, if you want something that's usable and unique and specific to what you're doing, you still need an expert human in control of it.
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And I think it's just kind of true anyway.
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Like you wouldn't go to, let's say, I'm gonna I need advice about how to make my engineering process faster.
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You're not gonna go to your piano teacher and ask ask them about them that, even though they're like an expert at that, right?
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Like, and so I think AI is sort of like the baseline expert on everything, but like until it has the human operator who actually has the domain expertise, it's just gonna be the middle of human knowledge.
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I don't think that's what any of us want.
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Yeah, I think I mean, I've found that I don't send anything out without making edits.
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Very rarely do I not need edits.
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And I would say the only times I need edits is or don't need edits is when it's my stuff for myself and my business.
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Right.
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Sometimes it's like that's good enough.
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Well, that's also true.
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Yeah.
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Right.
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But most of the time, right?
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I I know my stuff so well and so inside out that I can prompt it to that level.
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But I would say that almost every piece of client work, none of it goes out.
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And I don't think any of it really gets away without some level of editing to some point.
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Yeah.
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One thing I've been thinking about lately, not to I'm sorry to interrupt, but is like that AI, it it's an amplifier for what you already know, right?
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It it can increase that.
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It can also expand what you know, but I think those are two different tasks.
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And like if you're not sure which one you're trying to get out of the session, it actually reduces the quality of what you're getting from it.
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So like I would encourage people to, if you're trying to learn something new about the area that you're working in, kind of work on that as a separate session and then take that knowledge that you then absorb as the human filter and apply it to the amplification of that knowledge.
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It's kind of two different silos.
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Yeah, I definitely think the amplification, the ability to speed things up is just there's just a lot there, right?
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And I think that it makes me clearer in a lot of my communications, which is also helpful.
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And it and it can sometimes think about stuff that I wasn't slowing down enough to think about, which I think has a lot of value too.
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So talk to me about so you do a lot of websites.
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And so I take it that you're not recommending those AI generated pages and sites.
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I did play with one and I thought it was horrible.
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Yeah, I mean, I think to me, it's probably the same reason that I would say, do you want a Squarespace template?
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And and then to not have anyone's strategy or copywriting or positioning expertise when it comes to what goes on that page.
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It's kind of the same thing to me.
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Like a lot of the business owners that we come into contact with, sometimes they don't even know their own business model, to be honest.
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And so we end up helping them either realize what it is or how it's changed, and then setting some parameters around what to do in the future.
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Well, if you don't know those things, then sitting around and trying to both define that with AI, which it can help with, but to get to something final with that and then pump it into a page, and then then you're still gonna have to know where to put that.
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And so that's like can be, I mean, it can tell you those things, but all of a sudden it's not gonna be that much faster for the business owner who has no clue what's going on.
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They should take their time, as always, and apply it to something that only they can do.
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And instead of getting distracted by something that makes it so easy that actually now you're spending 10 hours of your week managing the website, which really like that's why you hire people like us.
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So I still think that's true, even though it could make it faster for them.
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We can't all do every job.
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Correct.
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100%.
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And outsource what makes sense is 100% where I'm at.
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But so let me ask you this question.
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We're talking about premium pricing, we're talking about um not charging by the hour and charging for value.
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Are you getting any pushback from people on the fact, oh, well, you're using AI.
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So we have not had that yet.
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I think most of the clients that we have just they trust us so much.
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And they're so focused on what the output is that I mean, for like to put it kind of crassly, they don't care how we got there.
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Like in the sense of they're like, yes, this is good, we're gonna test it.
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And we're very honest in our business relationships.
00:17:49.410 --> 00:17:53.570
So we're like, here's what we're doing, here's the assumptions we're making.
00:17:54.290 --> 00:17:55.730
And we test them.
00:17:55.810 --> 00:18:00.530
And if it doesn't work, I will throw that out so fast and to and move to something else.
00:18:00.610 --> 00:18:01.730
And we're gonna talk about it.
00:18:01.810 --> 00:18:03.009
We're in a partnership.
00:18:03.250 --> 00:18:10.370
And so I don't really feel like I'm not sitting around kind of scared of the process or how I get to something.
00:18:10.530 --> 00:18:17.009
It's like I'm gonna do what I need to do for this project for my client so that it's successful for them.
00:18:17.170 --> 00:18:18.290
And I they believe in that.
00:18:18.450 --> 00:18:22.690
So it doesn't, we're not having that kind of like there's no policing happening, I guess.
00:18:22.770 --> 00:18:25.250
It's and the trust comes over time, right?
00:18:25.490 --> 00:18:31.250
And so the longer a relationship you've had with a client, the more they trust you, which is really, really nice, right?
00:18:31.410 --> 00:18:37.330
And so we've you you're leveraging AI, which is saving you time, but you're charging for the value you provide.
00:18:37.570 --> 00:18:40.610
And I think that there's a big distinction there, right?
00:18:40.850 --> 00:18:46.050
AI isn't replacing your expertise, it's just honing it a little bit, right?
00:18:46.210 --> 00:18:50.050
Making it more efficient, more effective as you move on.
00:18:50.290 --> 00:18:53.170
Yeah, we get to, and I'm sure you're using it the same kind of way.
00:18:53.250 --> 00:19:03.330
You're you're putting something into it like it is a creative partner or or even when it comes to a website or code or whatever, like I have to put something into it.
00:19:03.410 --> 00:19:04.130
I get something back.
00:19:04.290 --> 00:19:08.530
I'm almost always, like you're saying, refining it to some level or finding an error.
00:19:08.690 --> 00:19:14.770
It's happening a little less, but find that sometimes still, where you're like, nope, you missed that one.
00:19:14.930 --> 00:19:17.810
But but then look at this other component I didn't quite think of.
00:19:18.050 --> 00:19:21.650
That's the same kind of stuff that happens in human collaboration too.
00:19:21.810 --> 00:19:24.050
So to me, it's just another collaborative tool.
00:19:24.130 --> 00:19:35.810
And no one was going around like speaking of multi-person agencies, where you weren't like to the owner or project manager, hey, did you did you use all of your staff for this?
00:19:35.890 --> 00:19:43.650
Is that why it seems like you've got 20 hours of mana, you know, power because you have 20 staff and it took an an hour of time to produce.
00:19:43.810 --> 00:19:46.530
Like, no, it doesn't, we don't think about anything else like this.
00:19:46.690 --> 00:19:49.090
And it's the same exact thing, actually.
00:19:49.250 --> 00:19:52.210
So again, we need to focus on what are we getting out of it?
00:19:52.290 --> 00:19:53.009
What's the output?
00:19:53.090 --> 00:19:57.490
And do you trust the human that is the final filter on it?
00:19:57.730 --> 00:20:01.410
If not, then you've got bigger problems, but it has nothing to do with the AI at that point.
00:20:01.730 --> 00:20:02.370
I agree with that.
00:20:02.450 --> 00:20:05.810
Like I like looking at it it that way is did you use your staff on this?
00:20:05.970 --> 00:20:08.770
Well, yes, of course I did, because I can't do all the work, right?
00:20:09.009 --> 00:20:11.970
And so very, very insightful way to look at it.
00:20:12.050 --> 00:20:19.410
I always talk about AI as, and I can't remember who said it a long time ago, but that AI is uh an unpaid intern.
00:20:19.730 --> 00:20:21.890
And so with unlimited hours.
00:20:22.050 --> 00:20:25.009
So they don't take breaks, they don't need vacation, right?
00:20:25.170 --> 00:20:26.930
You can really do a lot with them.
00:20:27.170 --> 00:20:29.570
So I think I think that there's a lot there.
00:20:29.650 --> 00:20:32.770
So well, thank you so much for taking the time to talk to me today.
00:20:32.850 --> 00:20:34.210
I really appreciate it.
00:20:34.450 --> 00:20:41.090
I do, before I let you go, I do want to ask you the question that I ask all of my guests, and that is that the show is called Imperfect Marketing.
00:20:41.250 --> 00:20:43.410
Marketing is anything but a perfect science.
00:20:43.650 --> 00:20:46.130
What has been your biggest marketing lesson learned?
00:20:46.370 --> 00:20:55.650
I mean, I'm gonna have to kind of uh circle back to what we've been talking about, which is that you have to position yourself before you price yourself.
00:20:55.810 --> 00:20:58.130
I mean, we didn't quite get to that, but you have to do that.
00:20:58.210 --> 00:21:03.250
So you have to figure out what is the value you're providing, what's the outcome?
00:21:03.490 --> 00:21:05.410
And who's the audience you're trying to serve with that?
00:21:05.490 --> 00:21:11.490
And so that for me, because I said we don't haven't niche down really, which is true, I do that on a case-by-case basis.
00:21:11.570 --> 00:21:17.410
So I don't really have like a spot on the website where you're like, here's the audience, here's the general outcome you're gonna get.
00:21:17.570 --> 00:21:25.009
No, I meet with you and and uncover those things, but I can price because I'm starting from that point.
00:21:25.410 --> 00:21:27.810
And it's not just like you get website.
00:21:28.130 --> 00:21:31.970
I'm I'm using caveman speak on purpose because I feel like that's what that is.
00:21:32.290 --> 00:21:34.290
You you get ad at the end of that.
00:21:34.450 --> 00:21:36.850
No, it's like, what are you trying to achieve?
00:21:36.930 --> 00:21:39.570
Will the way we're going to approach it do that for you?
00:21:39.730 --> 00:21:42.850
And then we measure, iterate, and build a partnership from there.
00:21:43.090 --> 00:21:48.610
I love how you talk about it as a partnership and measuring and building because that is what marketing is, right?
00:21:48.850 --> 00:21:57.650
And so positioning and pricing and valuing yourself as you move into uh pricing is just so, so important.
00:21:58.050 --> 00:21:58.370
Thank you.
00:21:58.530 --> 00:21:58.930
Thank you.
00:21:59.090 --> 00:22:00.370
Thank you so much for your time.
00:22:00.530 --> 00:22:01.570
I appreciate it.
00:22:01.730 --> 00:22:04.370
I hope that everybody watching or listening got something out of it.
00:22:04.530 --> 00:22:07.730
If you did, it would really help us out if you would rate or subscribe.
00:22:07.970 --> 00:22:09.890
Until next time, have a great rest of your day.