”The biggest thing is not to just be picking price based on your gut feeling. Most of us are like, ah, I think it's $75 an hour, or, I think it's $200. Arrive at that pricing based on something that is actually tethered in reality. So your pricing should never just be, this is how much I wanna make per hour. This is how much I wanna make per hour based on how much money I wanna work in a year, versus how much time I have is a good starting place. Then what are my expenses? What does it cost me to do this work? What tools do I have?” - Maggie Patterson
During the pandemic, we were told one thing seemingly over and over again. You need to start a membership. You need to start a community. That's the only way you can scale your business. And to be honest, I fed into it. I believed that a membership was the key to stop trading hours for dollars, but the truth is I was trading more hours for fewer dollars.
See, what most solopreneurs don't realize, and what I didn't realize for a long time is that you're always trading hours for dollars. That's what work is. The key difference is how many hours you are trading For how many dollars. And that's what Maggie Patterson is here to talk to us about today.
See, when the pandemic ended, we both noticed something. Many of those who were preaching the importance of basing your business off of a community or a membership were going back to one thing - services. Because when you do services right, you can make a lot of money.
Today, Maggie, who has over 15 years of experience successfully selling client services tells us the key to unlocking more income selling strategy.
Look for these top takeaways.
1. It's important to understand what kind of business you wanna run. A one-to-one business is a lot different from a one-to-many business, and they require different approaches.
2. The key is in the pricing. Don't just price based on gut feeling. Tether it to some reality, like how much money you need to make to pay yourself and run the business, and then listen for feedback. The market will tell you if you're priced correctly.
3. Too many solopreneurs give the strategy away for free In their proposal. They say exactly what they're going to do. Instead, you should hold paid strategy sessions sometimes called discovery projects, where you get paid to truly understand the scope, and give the client something tangible.
In the pro-show, we are going to talk about tips for successfully working with clients, and I'll give you some of my client horror stories. I know Maggie will give you some of her client horror stories as well, and we'll talk about another really important thing for success, and that's boundaries. You can become a member over at [howibuilt.it/join]. You can get all of the show notes that we talk about in this episode over at [howibuilt.it/406]. But for now, let's get into the intro and then the interview.
Intro: Hey, everybody. And welcome to How I Built It, the podcast that helps busy solopreneurs and creators grow their business without spending too much time on it.
I'm your host, Joe Casabona, and each week I bring you interviews and case studies on how to build a better business through smarter processes, time management, and effective content creation. It's like getting free coaching calls from successful solopreneurs.
By the end of each episode, you'll have 1-3 takeaways you can implement today to stop spending time in your business and more time on your business or with your friends, your family, reading, or however you choose to spend your free time.
Joe Casabona: All right. I am here with Maggie Patterson, the editorial director at Scoop Studios and the creator of BS-Free Business. Maggie, how are you?
Maggie Patterson: I'm awesome. How are you doing, Joe?
Joe Casabona: I am doing fantastic. I'm really excited to have this conversation because as I likely said in the intro, I don't think enough people are thinking about this. So, let's dive right into it.
So as we record, this is 2024. In 2023, I noticed a lot of SaaS owners, product owners, and creators pivot from, you need to have a membership. You need to have a community to offering their own services. Why do you think that is?
Maggie Patterson: It's such a great question. This is something I noticed too, and it's really twofold, is number one, we all know what went on last year. It was a very strange year from a financial point of view. I hesitate to use the word recession because technically according to all the markers of a recession, we weren't meeting those in North America at least, but we also had this situation with job loss and a really weird job market and all these different things. That bleeds over to all of us, whether we're a recruiter, product owner, SaaS owner, we need to maintain a revenue. A lot of these people have payroll, they have significant business expenses, so they probably saw an opportunity. They like, okay, I can maintain my cashflow or supplement my cashflow with services.
And then the other part is two, if you have any level of prominence in the industry, you're a Saas owner, let's say, or you're a very high profile creator, people are always gonna be asking you for consulting time. So it's a very natural thing for them to bring in as a potential revenue stream. And for previous years, they were probably like, okay, you know what? That's not core to my business. I'm not gonna do it. But when you're faced with financial reality and the market is behaving unpredictably, that's a good time for you to say, “Yeah. I am gonna do this because it's money that's literally sitting on the table waiting for me to take it.”
Joe Casabona: That last point especially is really good, right? Longtime listeners know that I got my start in the web development world. I was a Web Developer for 20 years before moving to the podcasting space, and I've always said it was easier for me to sell a $5,000 website than a $500 course or a $50 course.
Maggie Patterson: Absolutely.
Joe Casabona: Because I'm meeting face to face with people, I can more easily demonstrate my expertise with a single call usually than all the copy in the world on a course page. And usually, if people are reaching out for me for consulting, they're already kind of warm to that too. So, I think that's really good. And like you said, we all know what went on last year. When you have an opportunity, especially with a membership, any membership, low dollar, high dollar, when you have your consumers, right, when you're doing like a B2C and they are trying to cut costs, there's not a lot that you can do. Our groceries went up 25% last year. I've got three small children and I'm like, how do I maybe pay my family more out of my business? Well, I gotta cut costs, so I'm going to eliminate some of these additional expenses.
Maggie Patterson: Absolutely. And I think the other part of it is everyone's expenses went up personally. And if you have a business, it absolutely went up. Cost of tools went up, the cost of your team went up. All of these things have this ongoing impact. You know, like I looked at all of our team compensation for 2024 and everyone had to get a raise because I'm like, I wanna make sure everyone is well compensated that works for us and were still competitive. But ultimately, that does hit my bottom line.
Joe Casabona: That's exactly right. And it's funny 'cause you do see it everywhere. My wife is a nurse and I know like hospitals were concerned about certain costs rising, but they made sure their nurses were competitively compensated as well because their nurses are some of their most important staff that keep the wheels on the bus.
Maggie Patterson: Absolutely.
Joe Casabona: With that, I think we have seen over the last few years, like recurring revenue is so important, start a community, mostly 2020, right? When people were like at home, there was very much like the, you need to start a community in charge for this community. And I think a lot of people, myself included, tried to do this and couldn't make it work. My membership is a, as the members will attest to you, a constant experiment in trying to find the right value to make this scale a little bit better for me. So, with that in mind, how important is it to solopreneurs? Solopreneurs, especially we'll say to offer services?
Maggie Patterson: This is a really interesting question and I'm glad you asked it because there's a lot of layers to it. So, stick with me, everybody.
So, there's the first part of, we've had this and you said, you know, 2020, it's happening. Before this, there was a lot of focus on you should not do services because if you are not gonna be able to get leverage, you're not gonna be able to scale. And people were looking at things in this very kind of narrow, very scale focused way, or what we saw a lot of is, services were treated as an experiment, a stepping stone for people to do the next thing. So what I saw a lot of in kind of the circles I run in is people would do services for six months or a year and be like, I now have the secret, the secret air quotes to doing services. So now I'm gonna teach you how to do services.
And so a few things started to happen as a part of that is we saw a lot of people transitioning really quickly outta services that didn't actually have the experience. And we saw a lot of people really pushing this message and this narrative of services are not a way you can grow. And I honestly feel like looking at the solopreneurs I work with, they really internalized that message and felt like they had to move from this one-to-one done for you or done with you type service to something else.
The reality is you've gotta know what kind of business you wanna run because running a one-to-one business, and you alluded to this earlier, is much easier to find and sell to those people than a one-to-many scaled audience.
I run two very different businesses. I run a content production agency and we work mainly with tech companies. It is a very stable, and I'm not gonna say easy, I'll say simple business model because ultimately we have clients on retainer. We don't need to do a lot of marketing. We don't need to do a lot of new business. But over on the other side where I'm doing work with BS- Free Business where, you know, we run masterminds, we have a community. Doing all of that work requires a lot of marketing time, money, energy, and I am a marketer and it's still a lot.
So I think for a lot of people, you've gotta decide how do I wanna spend my time? Do I wanna spend my time doing what I would call very peopley activities for the more introverted among us? You know, this is something to consider like do you have the emotional and energetic capacity to be constantly marketing, constantly building your email list, constantly building your community so you have enough people to sell to? Or do you just want five clients that you can work with ongoing or on a project basis and not have all that extra hoopla. I don't think it's a binary of right or wrong. I think it's a matter of understanding what's gonna be best for you and what's required to be successful in each model.
Joe Casabona: I love the way you broke this down, right? So I mean like stuck with you the whole way. That was so clearly laid out. I love what you're saying because as we record this earlier this week, I did an exercise that I probably don't do as often as I should, which is lay out what my friend Chris Lema calls The Product Ladder and then consider my highest leverage offerings because like I said, I have three small kids. We're sending them to a Catholic school. One is still in daycare, and I realized if I don't give us a raise soon, we are not gonna be able to make ends meet. I've been holding off as long as possible. Last year was a down year. I realized I'm not gonna get there selling $10 a month memberships. I have a list of 1400 people. Even if all of those people become a member at $10 a month, it ain't gonna happen. And so I looked at my highest leverage offerings, and guess what? Those are a very specific done for you service for launching a podcast. And then right under that is like the one-on-one coaching. And those are the two highest leverage things. I get 10 of those people. I have made the difference in income I need to make.
Maggie Patterson: Okay. So I love that you brought up reverse engineering the numbers 'cause I'm huge on this and something I really encourage anyone who's a solopreneur is to sit down and figure out what do you need this business to be providing you with? Because one of the biggest reasons I see people wanna burn down their business, become frustrated, start fantasizing about Guinea pig cafe, like the things I hear from my clients are quite funny on a regular basis, but it's usually because we're not able to meet our financial needs.
For example, I have a child in university, so I know for me, for my contribution to our household income, what that needs to look like. If I was not meeting that, that's gonna bleed over into frustration, not just in my personal life, but in my private lives. And I can provide the link to this Joe. I created a reverse salary calculator. So it's like, Hey, here's how much I want to make personally like how much let's say you wanna make? I'll just use around number $5,000 a month. Personally, what are all the things that you need to consider your business to how much revenue you need to make? Because we tend to have this very romanticized, delusional, at times view of how the business is gonna work. We have expenses, we tend to overinvest in a lot of things. And then what happens is we don't get paid. And I see this all the time in the online space. And I'm not knocking coaching or consulting. I'm a consultant myself. But they'll be paying six coaches, be in three programs, have no time to actually work on the business, and they're literally paying themselves like $300 a month, which, hey, $300 a month is $300 a month, but it's probably not what you need given the cost of groceries right now and the cost of living.
Joe Casabona: Yeah. $300 does not cover groceries for a family of five.
Maggie Patterson: Not at all.
Joe Casabona: Even with small children, I know like teenagers eat a lot. Man, little kids, they set food on fire basically.
Maggie Patterson: They need a lot of snacks, if I remember correctly.
Joe Casabona: Yes, A lot of snacks. Usually those snacks come before or after the dinner. They're not hungry enough to eat anymore. I think that's great. I will make sure we link that in the show notes. You can find all of the links in the description in your podcast player or over at [howibuilt.it/406] or Episode 406.
This is great. I think this is really smart. You know, I think in early, I don't know if you remember like the freelance switch days, like this was like when a lot of freelancers were starting to like go online and trade notes and it felt like, kinda like Cowboyie. I heard a lot of people say like, oh, I'll usually just charge a client the amount of money for something I want to buy. And I'm like, that's insane.
Maggie Patterson: Yes. You know what's funny about that is I started freelancing in 2005, so when I kind of fell into that online freelance world, I was like, what are these people doing? I was so shocked by it because I'd come from a very agency background. I'd had all these business fundamentals and I'm like, wow, these people are really making it up as they go.
Joe Casabona: I said in the pre-show, like I started freelancing in high school, real low stakes. That's exactly how I would price it. But then like when I got out of school, I was like, oh, I have like taxes to pay and like student loans. These people who I thought were really successful, like, yeah, I wanted to buy like a new camera. So I just charged the amount for that and I'm like, what about taxes? What about anything?
Maggie Patterson: That's a problem for future you.
Joe Casabona: Yeah, exactly. Now I am happy to say that a few years ago, finally I set up a payroll for my business. And so I get paid a certain salary. And basically anything else, right? Like I am paying myself first. Anything else has to come from other income I make. So that was like kind of the reverse of what you just described.
I think what a lot of freelancers do, because again, I sat down and I'm like, why am I doing this? If I just want to make money, I could do that for somebody else. Like I could work for somebody else and be a lot less stressed.
Maggie Patterson: Yes.
Joe Casabona: I'm doing this to provide for my family and also have a free’r schedule. And if I am paying myself last, I don't have that. I'm not providing for my family and I'm freaking out about all of the money I'm spending in my business. So, I'm working longer hours or weekends or whatever.
Maggie Patterson: Yeah. And I love that you brought up the, I could just work for someone else and it'd be less stressful. And so much of what we don't talk about in business ownership is that sometimes it's better for people to not be in this world because it's not right for them. I literally say this to people all the time, and I think it's really important for people to take to heart. There is no gold stars for sticking this out. If this is not the right season of your life or it's not the right fit, it is okay to go work for someone else.
And I do think collectively. In entrepreneurship, we've been sold this idea that we will all make exponentially more money when the reality is, I know what I pay myself for my business and I'm very happy with that. But I know given my skills, experience, background, and everything else, and this is not a brag, this is facts. I know exactly how much I would be making in corporate, and it is more money. But for me, I don't want that lifestyle. I want the lifestyle I have now, and that's fine, but don't let it be all about the money, because if you just want money, go work a nine to five and not have this much stress in your life.
Joe Casabona: Yeah. That's exactly right. We've been sold this. Everybody should work for themselves. And I don't understand, I mean, it's like there are silos and echo chambers where people are like, why would anybody want to do that? But it's really stressful. And again, like my wife and I, like our work lives are like night and day. I am self-employed to have a free year schedule. She works for a hospital and like, yeah, she gets to make her own schedule, but there are a lot more rules that she needs to follow as a nurse because people will die if she doesn't follow those rules.
Maggie Patterson: Yes,
Joe Casabona: I sincerely doubt anybody's gonna die if I give them bad podcast advice. I don't wanna jinx myself, but I'm very confident in that fact.
The other thing is nothing's permanent. I know a lot of people who were like self-employed and then they got a great opportunity to work for a company and they worked for them for a while and then they went back to being self-employed and they were better because of it, Right? They got all of this experience working on a bigger team or managing a certain group of people that helped give them better perspective to be a better business owner.
Maggie Patterson: Absolutely. And I don't think we give those skills enough weight or honestly respect because I know for me, one of the reasons I continue to grow in my own business is that I have a line of sight into all these other businesses. We're working with these bigger tech companies. We're working with bigger professional services companies. I get to see how those things are functioning and then bring that into my own business. So, I think whether you are doing client work or not, but having those abilities to bring other experiences in, even sometimes going working for someone else for a year can be the absolute best thing for people.
And you know, you've mentioned you have three small kids. Some people need the freedom and flexibility during that stage, and some people need the financial stability. And I think we need to just be really mindful of what's right for us in a specific season. And just because you freelanced for three years doesn't mean you can't come back to it if you get a job. Or you had a job and then, you know, I had one friend, we started freelancing at the same time. She's had four different corporate jobs in that time. She goes through these cycles. She works for a couple years, ups her skills, and is able to charge more, and then freelances for a couple years, and I'm waiting for her to go back into a freelance cycle anytime.
Joe Casabona: That's so true. and I could probably be making, like you said, a lot more money if I had stayed at the agency job that I left almost eight years ago now. Wow. I'm probably completely unemployable if I'm being honest with myself, but I could have probably made a lot more money. But you know what? There were times in that job where I was told, if you wanna get paid on time, you need to work the weekend. And I'm like, I've got Hamilton tickets, like I'm not working this weekend. And I just like hated that. Or like I wasn't gonna miss anytime my kid has like a school play or a thing at the school that's in the middle of the day/. I don't have to ask for anybody's permission to go to it. I can just go to it.
Maggie Patterson: Exactly.
Joe Casabona: And that's so valuable to me.
Maggie Patterson: That's the exact reason I started my business. I had a husband who worked shift work. I had a very long commute. I was like, this is just not gonna work. And I personally have never looked back and I like that I can go to the gym at two in the afternoon if that's what I wanna do on any given day. I wanna start work at 11, I will. That to me personally, I'm not a fancy person. I don't need a lot of money. I'm doing just fine over here.
Joe Casabona: I love that. Speaking of this now, I wanna get into client work. Can kind of sometimes feel like you're beholden to somebody else and you've gotta get your hands dirty and you're always on call. And so I wanna touch on that. But first I do want to take a quick break for our sponsors.
Sponsor: Look, when you have an online-based business, speed and reliability are the most important aspects of a service. Not far behind that is actually owning the website that your business relies on. When you own your website, you're not subject to algorithm-changing terms or accidental shutdowns.
That's why I'm so excited that Liquid Web is back as a sponsor of How I Built It this year. Their cloud VPS is some of the best-in-class hosting you can get when your business relies on your website. From speed to security and protection to regular backups, with LiquidWeb you can trust your website will remain in tip-top shape.
Not technically savvy? Don't worry. LiquidWeb offers fully managed hosting, which means they have a team of knowledgeable experts looking after your website for you so you can focus on running your business. If you need fast, reliable, and secure hosting for your business, check out Liquid Web. Head over to [howibuilt.It/liquidweb] today.
Hey, real quick, before we get back into the episode, I want to tell you about my free newsletter Podcast Workflows. If you are wondering how I can successfully run this show plus two other shows, plus run a business, plus run three children, Podcast workflows is for you. You will get weekly emails with behind the scenes look on how I produce this show experiments I am trying with other podcasts and general advice to start, grow, and monetize your podcast. You'll also have the opportunity to become a member and get ad free extended episodes of this show as well as bonus content. You can do all of that over at [podcastworkflows.com/join]. That's [podcastworkflows.com/join]. Sign up for free today.
Joe Casabona: All right. And we're back. So do services have to be getting your hands dirty? This is maybe not the best way to put it, but that's like what I have in my mind. One reason that I moved away from Web Development is because I wanted to stop doing client work because I, like I think many solopreneurs think that doing client work is explicitly and exclusively trading time for dollars. I have eight hours in a day. I charge a hundred dollars an hour, therefore I can make $800 today. Is that the case?
Maggie Patterson: I have a real beef and a [Inaudible 24:12.5] with the ideal trading time for dollars. That's what work is. It doesn't matter what work you're doing. This is the way our capitalist economic system is designed. When you do work, you are trading time for dollars. So, I think we need to kind of let that one slide. You know, unless you're into investments or real estate investment or something else, there's very few truly passive things. There's leveraged income, sure. But we need to kind of let go of the state, I think, and it goes back to what I was saying earlier, you wanna choose how you're gonna spend your time. Do you wanna spend your time building a one to many business, doing a lot of marketing, doing a lot of thought leadership, really investing in that? Or do you just wanna get in and get out and do some work for clients?
And one of the reasons that people really struggle with client work is they don't set themselves up for success. They don't price correctly. They underprice. They don't set up boundaries. They set up relationships with clients that are not built on mutual respect and trust. We've all had a bad client. I get it. And when you have a bad client, you've gotta look at it and be like, okay, yeah, they really sucked. But for me, what was my role in this? And that's how you become someone who can do services without it taking over your life. How can you run your business in a way that serves your clients and serves you? And I think so many times we mistake being a service business owner for having to like let win rule all over us.
And the only reason I'm still able to do services after all these years is because I have very clear rules of engagement. I vet my clients. I price accordingly. I don't try to bill every single hour. I'm very intentional and strategic about the choices I make. And most service business owners kind of just fall into it like someone's like, oh, could you build this website for me? And then they build the website, and then you're kind of figuring it out as you go. And I think if you're struggling with any of those things, starting to figure out why you're struggling with the client work and what you don't like about it is a really good place to start.
Joe Casabona: There are a couple of things I just wanna like reiterate that you said, everyone does that. When you're at work, you're trading time for dollars. With client work, like you said, that's leveraged, right? I don't get anywhere near 250 bucks an hour for the work I do in my membership. I basically operate at a loss right now for that. So I think that's absolutely right. There's very few passive income things. This is really where the membership and courses myth kind of came from, right? You set up a course and then it just makes money while you sleep. As someone who actually taught in the classroom, that's not how teaching works. And so I love that you said that.
And then again, most people don't set themselves up for success. This reminded me, I went to the University of Scranton, went there and taught there. And so I lived in Scranton for a while and I was working at a coworking space. This guy asked me if I could like do something for him, web related, right? And I'm like, oh, I don't really do that kind of work. And he looked me right in the face and said, you should never turn down the opportunity to make money. I looked him right in the eye and I said, the fact that I'm turning this work down means that I'm going to do work that will make me more money. Not all work is created equal. And if this is going to pay me 50 bucks for an hour and that work is going to pay me 200 bucks for an hour, I've lost $200 working for you.
Maggie Patterson: Exactly.
Joe Casabona: I just think people look at the money in and not the opportunity cost of the work they're doing.
Maggie Patterson: Yeah. And I think what's really interesting, I was actually writing about this yesterday, is I've launched a course. I know what this looks like. And yes, I broke even on all my expenses and everything else, but I learned a couple key things from that is, number one, I don't like this model. I like that one-to-one relationship is really important to me. I really do better just personality wise with that. I like building very strong, long lasting relationships.
I also too, the year I took to build the course, market the course, build the list on all those things. I was turning away client work. So while by all external measures of success, the course was successful and I had made more money. I'd also turned down a bunch of money. So, was I really further ahead with something that I wasn't really loving doing? No. And I think that's the conversation we need to have with ourselves. Whereas if I'd said, oh, I love doing the course, this is great. I would feel differently about that, but it wasn't the right fit for me.
And each of us has to be discerning about is client work something I actually like doing? Or do I want to abandon client work because I think that's what I should do, or there's something that's not quite working right for me in my business right now.
Joe Casabona: That's a really smart observation. And I think, I mean, for me, I love teaching. But like I have a whole video library that people can purchase right now of like podcasting advice and things like that. And it eats at me knowing that some of that stuff is outdated and it's just like not doing enough volume for me to go and update it right now. I was talking to my friend Kat about this and she's like, I need to update one of my courses. And I said, why do you need to update it? 'cause you feel you need to, or because the students who are buying the course are asking you to. And she was like, oh, well I just think it's outdated. And I'm like, I would say, and this like cuts me to the core too. Don't answer what people aren't asking. If people aren't saying, Hey, like this is really outdated and it's still more or less the same thing, right? Like small interface changes and things like that, fine. You don't need to update your entire course. It's probably not worth it for you. And that's something that I have a hard time like rocking as someone who did software for a long time. But it just highlights one of the things that you pointed out, which is one-on-one or like a group coaching, a live cohort thing is probably the best thing for me in that realm because I get to work with people one-on-One. I get to give them the latest information without feeling like my course is getting stale and I feel bad for selling it. Those are things that I shouldn't feel if I'm selling a course.
Maggie Patterson: And the other part of this is we are seeing a shift right now in the industry. You've been around long enough, you've seen these trends, like it's all about courses, then it's all about memberships. Then it was all about group programs.
What we're seeing right now is people are very aware of how some of those experiences have not delivered. And there is some pushback. People want individualized advice. They don't want the one size fits all. So what you said is you can get in there with people, make a very specific recommendation. It has impact much faster than they watch five modules and like, oh, maybe this is what I should do. More people want individualized attention, and if you're not doing it one-to-one, how can you deliver that same experience and really provide people with the guidance they need to get the results that they're looking for?
Joe Casabona: I love that. That's perfect. I was also gonna go on like a little bit of a tear, but maybe we'll save that for the members, which I don't think I mentioned yet. But in the members portion of this episode, we're going to give tips for successfully working with clients. So if you want to hear that conversation ad free, you can become a member over at [howibuilt.iIt/join], or in the link in the description in the app you're listening to right now.
Before we move on to what people are probably already seeing in the title of this episode, we did touch on the fact that most people don't set themselves up for success. We talked about money a lot.
One place lots of us mess up is pricing. You probably touched on this already, but maybe like one or two tips for properly pricing your services.
Maggie Patterson: Okay. I probably could write like my PhD dissertation right now on pricing for Surface Business owner.
Joe Casabona: Summarize, Lord of the Rings in one sentence. Go. That's what I basically just asked.
Maggie Patterson: Exactly. The biggest thing is not to just be picking price based on your gut feeling. Most of us are like, ah, I think it's $75 an hour, or, I think it's $200. Arrive at that pricing based on something that is actually tethered in reality. So your pricing should never just be, this is how much I wanna make per hour. This is how much I wanna make per hour based on how much money I wanna work in a year, versus how much time I have is a good starting place. Then what are my expenses? What does it cost me to do this work? What tools do I have? A great one.
I used to do PR back in the day. I had to buy a very expensive media database. I needed to account for that in my pricing. Do you have subcontractors? What are all those things that go into making the sausage that all have to be accounted for in your pricing?
And then the other part of it is to looking at your market, looking at your potential clients and understanding what the kind of price cushion, you know, like what's that range for people? What I can charge in corporate consulting for a tech company is very different than what I can charge in these solo entrepreneurs. So you've gotta understand what's in the range for them, and then figuring out based on your skills, your experience, how you communicate your value, the results you get.
And if you are really not feeling confident with your price, the best thing you can do is set the price and go from there. Do not spend days and days in analysis paralysis, trying to figure out the price. Set the price, and figure it out from there. The market will tell you, if you start sending out proposals and every proposal is a no, and they tell you it's all because of price, you've gotta do a better job of communicating your value or your pricing is off. Or I tell this my clients all the time, if you are constantly getting a yes on every single potential client, your price is too low. Raise your price. If your close rate is like 90%, no, no, no, no, no. You want people saying no because your price is too high.
Joe Casabona: I always knew it was time to raise my rates. When I got like three yeses in a row, no questions asked. I'm like, well, I'm not charging enough. First of all, love that you never really said lower your prices, right? it was always like set the price. Go from there. Consider your audience. It is a value play.
And in some markets, your price might be suspiciously low. When we were looking for a house, all the houses we were looking for, we live outside of Philadelphia, and this was pre pandemic, so like prices weren't inflated yet, more inflated, I guess. All the houses that we were looking at were in the maybe $250- $350,000 range. And there was one house that looked great from the outside and it was $120,000. And my wife was like, oh, this looks okay. And I'm like, what is wrong with this house?
Maggie Patterson: Yes, exactly. Is it sinking?
Joe Casabona: First question. And it turns out, we looked further into it and it was a fixer upper. And I was like, oh, so we're gonna put more than the difference into this house. So if your prices are too low, people will say like, everyone else is quoting me up here. The fact that you're quoting me down here shows me that you don't really understand the scope of the work or the type of work that you're gonna be doing.
Maggie Patterson: And your potential client wants to work with someone who is confident, who can guide the process. There is a lot to be said to be able to go into the client and say, this is how it's gonna go. This is what it looks like to work with me. Here is my process. Here's how long it's gonna take. Here is the price. Whereas so many of us early on, especially, we kind of let the client guide us and that's not ultimately what your client want. A client who wants to kind of be, for lack of a better word, alpha, is not necessarily gonna be a good client. They're probably going to lead to over-servicing, undercharging and being really unhappy.
Joe Casabona: That is another great point, right? There's the anecdote that like the $500 client is gonna ask you how they're possibly getting the most value out of you, but the $50,000 client or $5,000 client will say yes and just let you do your work. You need to find people who understand the value of what you do for them.
Maggie Patterson: Yeah. And it's not your job as a service provider to convince people they need things, they don't need or to convince them that you are the best. Your job is to communicate it and let them decide.
Joe Casabona: Yeah, communicate your value. When we bought our car, we were looking for a minivan. We were never gonna be sold on a Bugatti. No matter how hard the salesman would've been like, you need this Bugatti. I'd have been like, I can't fit one car seat in here, let alone three.
Maggie Patterson: Exactly.
Joe Casabona: I just think that's so great. Again, I'm gonna share maybe a couple of horror stories around pricing in Web Development. I always got the, my nephew could do it for free. Cool. I'm never gonna compete on free. So, let your nephew do it. And then when they mess up, come to me and I'll be 150% more.
Maggie Patterson: Exactly.
Joe Casabona: Let's get into, I think the big question, the big finale of this episode, we haven't even touched on this really. We did a lot of groundwork. We have a very strong base for this building. What is selling strategy?
Maggie Patterson: So most of us as service business owners, what we do is we sell the service. We go, okay. so I'm gonna build you a website. I'm gonna write your copy. I'm going to design your logo. We don't talk about the secret sauce, the strategic thinking and the skill we bring to that. What happens is we just do that and we don't charge for it. We don't really account for it. We sell a very transactional service when really strategy is transformational work and you want clients who are going to buy into the process, you're going to lay out for them. And I'll talk you through process in a second. How are you positioned in the market? Really looking at all those things.
You want someone who's gonna hire you for that website, copy, let's say, who wants you to do all the work, not just sit down and write words. Because for each of us to do our work, we have to do the strategy. So what happens? We end up not charging for it, giving it away for free, letting our clients go to someone else for the strategy, and then we have to be the one to implement it. That is a nightmare. Been there, done that. And this was something I really noticed over the years with my clients. And I was just like, hold up. What is happening here? What I had started doing is I just started packaging strategy at the beginning. So if I'm gonna work with you on a retainer at the beginning, we're gonna do a strategy project. We're gonna lay out the digital marketing plan, the content plan, whatever it is. we are going to spend that time upfront so that I know what I'm getting into. I can price the rest of this engagement correctly, and that we are essentially building from a place that is mutual understanding, not just kind of making it up as we go.
And that really truly changed my business. And I just kind of did this quietly in the background. And then my friends were like, I don't understand. How did you make so much money? I was like, well, I just started like charging for this thing I've always done. And then from there, I've packaged that into like my own kind of methodology called Sell the strategy where I'm able to walk people through that process of how do you get from, you're doing the strategy and not charging for it to actually having people come to you specifically because they understand the strategy that you are putting out there.
Joe Casabona: This is so important because you move from being a commodity to a partner.
Maggie Patterson: Exactly.
Joe Casabona: Oh, I bought a website from you. You move from that to. Oh wow! I am buying a successful web presence and online marketing strategy, maybe. This is such a crucial switch because someone goes from buying a thing from you to essentially improving their business in some way with your brain.
Maggie Patterson: Exactly.
Joe Casabona: The other thing I wanna point out here right, is packaging strategy. At the beginning when I learned about discovery projects and web development, that was like, wait, you're basically gonna pay me to tell you what someone can do for you. And that someone's probably gonna be me, unless it's just an awful experience for both of us.
Maggie Patterson: Because how many times before you were doing this, Joe? Did you spend time trying to figure out what they needed, hoping you're gonna get it, or if you knew what they needed, you literally wrote the strategy and the proposal for them and gave it to them, and then they can have anybody implement that.
Joe Casabona: Yep.
Maggie Patterson: When I worked in agency, we do that all the time In the pitch. I'd be like, we just gave them a three year PR plan for free. What are we doing?
Joe Casabona: Yeah. Here's what I'm gonna do for you. Now you're gonna hire some intern in-house to do it at a fraction of the cost.
Maggie Patterson: Exactly.
Joe Casabona: That's so true. And then if you're doing it right, you're spending, I don't know, 8, 12 hours, 16 hours, putting together something really good that they're hopefully gonna say yes to. Why not get paid for those 16 hours, right? And say like, Hey, here's what we're gonna do. Here's your very clear deliverable.
I do this today in the form of a podcast audit, right? So someone pays me for an audit where I spend an hour or so looking over their whole podcast and their podcasting strategy, and then I give them a game plan. And then hopefully, the move is, “Hey, can you like automate some of this stuff for me?” Or “Can I hire you to be my coach to help me do these things?” That's the right move, right? I'm not spinning my wheels, I'm getting paid for something. The client gets a very tangible document that they can implement themselves or have me help them with.
Maggie Patterson: And I think one of the things that we need to consider in this is when you start selling strategy, you're probably gonna get more no’s, but you're gonna have a better quality client who understands the value of what you're bringing. A client who says to you, no, no, no, I just want you to do the website, or No, I just write the website copy, doesn't understand the inputs and the strategic thinking that goes to getting to that point.
Joe Casabona: I think maybe I should say here, right, that this is very different from, I have a lot of problems with Alex Hormozi and his like a hundred million dollar…
Maggie Patterson: You and me both.
Joe Casabona: Whatever, whatever. Right? And like he says in his book, if people are hungry, go to that place and you can sell them the worst hotdogs ever. And I'm like, great. People are gonna buy crappy hotdogs from you and then never buy from you again. Why not sell a really good hotdog that people like rave? Like it's just like, maybe I just took this opportunity to like take a pot shot at Alex Hormozi.
Maggie Patterson: But here's the thing. Did we start a business to sell potentially like rotten hotdogs that are really cheap, or do we wanna be hired because we're really good at what we do and we have a really positive experience and the attitude of, I'm just gonna sell you crappy hotdogs, is literally the epitome of so much of what is wrong with the world we're in right now. We need to have care and respect and compassion and humanity for each other. And if we're just looking at people like, I'm gonna sell you this hotdog, what are we doing?
Joe Casabona: And the people espousing that advice, they don't follow that advice. Like, Alex Hormozi didn't become a multimillion billionaire by offering crappy gym coaching or what, like however he made his money, right? Like something in the [Inaudible 43:10.2]
Maggie Patterson: Exactly.
Joe Casabona: Right? That's not how he made his money. And so like that analogy immediately falls apart. So, I love this selling strategy. We talked about it a little bit, but if someone's like, this is great, like I sell logos, or I sell producing a podcast episode or writing an article, how do I start selling strategy?
Maggie Patterson: I have a five step process and I'll walk you through it really quickly. Again, this is the, let me tell you the Lord of the Rings in five to two steps, but the very first thing is product. This comes down to essentially what is often referred to as productizing a service. You are going to do market research and validation. You are not gonna create this in isolation. Nobody. Please do not create this in isolation. Just because you think it'll be cool, doesn't mean anybody wants it. You have to validate that there's an actual need for this. And as part of that product step, once you validate marketing need, you're going to start developing what is the process.
So I'll use content strategy. What are those steps I'm using for content strategy? What does that look like? Because the more you can convey what the process is, the more your potential client will start to trust you and kind of start to relax. And that's what you want. You want your client to be like, Joe's got it. You don't want them having to ask you a ton of questions. You wanna be able to convey that value very easily.
And then from that process, you go into positioning. How are you gonna position yourself as the person to deliver this work? Why are you the best choice for their needs? What are your skills, experience, talents, etcetera, that make you uniquely qualified for this? And then once you get beyond the positioning piece, you wanna look at your pricing.
We've talked a lot about pricing, but your strategy pricing needs to be for whatever this would mean in your business premium. It needs to be, let's say you charge an average $150 an hour. You wanna be doing this at a much higher rate because it is much more strategic work that has a lot more value to the client. And then from there, you gotta have a promotion plan. So many times we've all done it. We'll create something and then we just wait. We're like sitting around waiting for people to come to us for people to buy the thing. People can't buy your thing unless they know about it.
Joe Casabona: I've built it. Why don't they come? Field of Dreams Marketing.
Maggie Patterson: Exactly. Guess what? That does not work. So what is your promotion plan? So are you gonna start going on a bunch of podcasts? Are you going to have your own podcast? What's social? even if you are not someone who loves marketing, you need some promotional plan here.
And then finally, you also need preparation. So preparation is all kind of a scaffolding that goes into building and delivering that service. So what do you need in terms of onboarding documents? What is it going to look like when you deliver the work? How are you gonna create some wow factor around it?
The last thing someone wants is to pay $5,000 for a strategy and then have it be this janky word document. You need to have a little bit of that experience mapped out so that you are sitting down and being able to deliver this from start to finish without a lot of additional work on your part besides just doing the actual work. So when I sit down, and this is gonna get real meta. I do strategy. I'm teaching people how to sell strategy, but when I sit down to help basically create someone's strategy map, I'm able to sit down, you know, and I'm not figuring out like, oh, do I have a diagram for that? What's the document? That is all decided in advance? Because there's one thing that will drive every single one of us as business owners into the ground. It's decision fatigue and trying to figure out what we're actually doing.
Joe Casabona: Yep. That's amazing. Can you recap the five steps really quick for us?
Maggie Patterson: Yes. So Product, Position, Price, Promotion, and Prep.
Joe Casabona: Awesome. The first thing you said, I wrote it and then like fell down a rabbit hole thinking about that, like don't create in isolation 'cause this is something that everybody does, right? It's like, oh, you know, it'd be cool if we had this. I'm gonna make that. Only you think that's cool, right? I feel like that came from early two thousands. The whole like, you need to dog food your own product or whatever. You don't necessarily need to, right? Like I would never buy my done for your podcast launch service. I have a podcast. I know how to launch podcasts, and that's what I'm selling. And again, I'm selling some strategy behind it. But I think that if you only build something that you would use, you have a customer of one, and you are not gonna pay yourself for that service.
Maggie Patterson: And it's really important like most people who start businesses, we have a very specific personality type. We have a lot of ideas, a lot of energy. For the most part, we love ideas.
I literally could create a new product every single day. That does not mean they should ever see the late of day. Like if people saw my notebooks, they'd be like, those are terrible ideas. But if I literally thought they were all fantastic and like started just rolling it out to market, I wouldn't have a business. I would just have a lot of products that nobody wants.
Joe Casabona: Yeah, that's exactly right. And I know like some people will say, if an idea keeps coming back to me, then I'll pursue it. And I'm like, no, don't do that. Instead of when you have an idea and you think it's good, like talk to a few people about it, then you'll know whether or not you should go further.
So, I love that product, position, price, promotion, and prep. That wow factor. Consider the user experience, something I also, maybe being from the web development field, think about a lot. But this was a really dense conversation.
So Maggie, thanks so much for giving us so much great information. If people wanna learn more about you, where can they find you?
Maggie Patterson: So, I have a podcast called the BS-Free Service Business podcast, where I talk about this stuff incessantly. And if you will indulge me, I will fill up your ears with all the conversation about this. You can usually find me over on Instagram and Threads at BS-Free business. And then if you want weekly updates by email, bsfreebusiness.com/newsletter.
Joe Casabona: All right. I will link to all of that and more in the show notes over at [howibuilt.it/406].
If you want to hear our extended conversation where we talk about tips for successfully working with clients, you could become a member. Guess what? That link is also gonna be at [howibuilt.it/406] or if you're listening in Apple Podcasts, you can just hit that subscribe button right in the app you're listening to now.
So, there you go. Maggie, thanks so much for joining us today. I really appreciate it.
Maggie Patterson: Thanks so much, Joe.
Joe Casabona: And thank you to our sponsors. Thank you for listening. And until next time, get out there and build something.