WHAT'S THE GOING HOURLY RATE OF AN "EXPERT"?

What you charge, and how you charge, says a lot about your level of skill whether you like it or not. I meet so many people that want to be experts, thought leaders, gurus, yet their pricing, and how they handle the situation, tells a different story.

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Here's what an expert looks like

I met Steve the week he moved to NYC. Through a mutual friend at a bar on Bleecker St., we were quickly drawn to each other and a first date the following week was scheduled.

Now, Steve had just moved here; I was born and raised in the east village. Did I ask him what he wanted to do on our date? Of course not! As an expert New Yorker I knew it was my job to put together an impressive itinerary of insider hot spots.

Neither of us had any money, so I had to plan an intriguing date that didn’t cost an arm and a leg. I knew he was an artist, so with a dignified quarter I took him to the bar on the roof of the Met to sip a beer next to some oversized Jeff Koons animal ballons. I followed up that impressive and classy spot with a few locals-only joints in the east village, including a sushi bar on St. Marks that is both delicious and crazy affordable. 

Had I asked what he wanted to do, his uninformed requests may have landed us at an overpriced hotel bar in midtown manhattan full of out of towners showing off, or worse, TGIFridays.

Therein lies the difference between and Expert and a Service Provider.

Nuanced but not minuscule, Experts learn their trade over a lifetime, and Service Providers execute ideas based primarily on your direction. 

And like any expert, had I been charging for my expertise I certainly would have charged, and earned, top dollar. Because little secret spots are not easily found in Zagat and Frommers, they are known only from a lifetime of living in the city.

How to Spot an Expert

CHARGING

Most people are service providers and they usually charge based on time. Even if they are proposing a project rate, they formulate that rate based on a forecasted amount of time. This is because they are at the mercy of the client, so they have to predict how much time the client will need!

An Expert’s fee is related to his or her value contribution. They know how long it will take them because they've done it a million times, but they don't charge based on that time. 

He or she has spent years, sometimes a lifetime learning, and clients pay for that knowledge regardless of how long it takes.

Imagine a plumber. I've had a plumber come and snake my clogged drain in 10 minutes and charge $200. And it's worth it! Because he knows how to do it, and I don't. He solved my problem, didn't ask me how, and came when I needed him. That's value.
 

PROCESS

Service Providers are the hands: they execute. They ask, “What do you think? Do you like this?”

Experts are the brain. They tell you why a decision is the right one and give thoughtful reasoning and innovative ideas to back it up.

Service Providers need to put guidelines and restrictions on their work in order to regulate the potential for a deluge of client change-requests.

Experts similarly put in guidelines, but don’t typically need to enforce them due to clients not typically needing more than one round of revisions.
 

RESULTS

Experts and Service Providers strive for you to be happy, but Experts are less likely to sacrifice the truth of a situation to make you feel good. As in, that dress really does make you look fat.

Web designers, for example, are often Service Providers. They ask for page examples, content, photos, and other websites as examples; they are acting as the hands for your vision. But when web designers are Experts, they ask what the client is looking to accomplish. They ask about the brand, the market, what is currently on the site. They ask about the goal.

When Experts asks these questions, they can charge a premium. After all, it costs more to tell the client how a website should look and function than to simply put things in placed based off client notes. Experts will tell the client what pieces of content they need in advance and recommend additional outside help, if necessary. 

Knowing these distinctions not only helps with planning and executing your next project, but with your bottom line as well. Even if Steve had hired me (at a premium) to take him on the date, considering that date would change the course of his life I think we can all agree the benefits he received far outweighed any investment ;)

 

Want to go from "Service Provider" to Expert

 

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TURNING DOWN WORK: PROOF THAT PAID WORK CAN BE UNPROFITABLE

The Carrot

I am constantly goading people to turn down work, and am often met with resistance. Seems counter-intuitive that if you want to make more money you would turn down paying clients. So let me give you an example to illustrate the point: paid work can be unprofitable, and some paid work can actually hinder the achievement of your overall business goals.

Meet Russell, a wedding photographer who generally shoots on the weekends. Though there is a great deal of post-wedding work, weekdays are fairly flexible.

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So when Sally asks if he can do some headshots for her LinkedIn profile, he says yes. He could use the extra income.

He thinks to himself that headshots are easy and can probably be done in two hours: one for shooting, one for editing. Since he charges $5,000 for weddings, $300 feels like a fair rate to him.

Sally shows up to the shoot holding a pile of clothes. She has no idea which outfit to wear. She asks if it’s OK to take photos in a few different looks.
 

The Fall Begins

No problem, says Russell. But once the shoot gets rolling and she’s on her third outfit, Russell realizes this is going to take longer than expected. He didn’t know outfit changes were going to take up so much time. Plus, she did her own hair and makeup and it’s not looking right in the photos. Russell doesn’t know how to do makeup and hair since his brides always have it professionally done. When he looks at the shots, he knows immediately that the lighting is washing her out. He tells her to put on more makeup. This takes up time.

The shoot ends up being two hours. He was an hour off, but hey, he’s still going to make $300 he wouldn’t have made otherwise.

He could have just been watching TV during that time anyway, so what’s an hour?

The next day he looks through the shots. Because of the makeup debacle, only half of the shots are even usable. He finally finds a few good ones, picks his top five and sends them to Sally. She writes back immediately. The ones he sent are not what she had in mind, she really wanted photos of her looking more professional. Sally thinks she looks too friendly.
 

The Fall Continues

Too friendly is not how Russell is feeling right now. He goes back through the photos again and finds some that could be considered more “professional”. Sally writes that these are better, but could she just take a look for herself and pick the ones she wants?

Frustration has now turned into annoyance. He’s already spent almost an hour sifting through the photos and doesn’t want to spend any more time on this project. But Russell doesn’t feel as though he has a choice. Sally clearly doesn’t like what he’s picked and he just wants her to choose the photos so he can move on to editing them.

Sally picks a couple photos, but her hair looks weird in them. She asks if Russell can Photoshop her hair from a different picture onto her face in another. Russell knows how much time this will take, but Sally has made it clear that she doesn’t like any of the other photos and Russell doesn’t want to upset her. After all, he’s bent over backwards thus far and would hate to have spent all this time and still send away an unhappy client!

So he does the work. After another hour he has produced the photo she wants. He sends it off relieved that it’s over and psyched to spend the $300 of some rightly-deserved beers.

But like a zombie, she keeps coming back. Sally writes that she is pleased with this one, but didn’t he say he would provide three final shots? Unfortunately, unlike a zombie, his brain is still intact and he has to continue to deal with this “side project”.


The Lesson

And on and on it goes. If you think this is an exaggeration, then you don’t work with clients. The thing is, it’s not Sally’s fault, it’s Russell’s and his lack of process.

You see, if Russell regularly did headshots, he would have given Sally instructions ahead of time. He would have recommended hiring a makeup artist for an additional fee. Even better, he would have included it in the price. He would have said she is allowed up to three changes of clothes. He would have asked her ahead of time to show him some examples of photos she liked and wants to emulate. This way, when he picked the top five photos, he would know that they were in line with what she wanted (and if she didn’t like them he would have been able to refer to a concrete example). Then he would have told her he only includes one round of editing and any additional rounds or extreme editing, like editing two photos together, would cost extra.

But this is not something Russell does every day so he doesn’t have a process for it. Meaning he doesn’t have a way yet of making it profitable. Had he developed that process just for Sally, it still wouldn’t have been lucrative since he would have spent that extra time developing the process. And unless Russell wants to add headshots to his repertoire, he needs to say “no” to customers looking for work outside his niche of weddings.


Turn Down Work, Make More Money

Imagine if he had spent that same 4-5 hours working to land another $5,000 wedding client instead? That marketing work may have even planted the seeds for a few additional wedding clients. The value of his time spent is incomparable!

Plus, the last thing he wants is for one of Sally’s friends to contact him for more LinkedIn headshots, so he didn’t even receive the value of more potential business. Sally is unlikely to give him a referral for weddings because that’s not why he was hired. For her he’s not top of mind for weddings, if anything he’s top of mind for headshots.

WHY THE CUSTOMER IS NEVER RIGHT

Why the old wisdom of "The Customer is Always Right" is just that, old.

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I’ve been saying it for a long time... Sometimes it pisses people off because it goes against everything sacred from the golden age of Leave It to Beaver and whatever the term "good old days" refers to (also B.S.)
 

AGAIN, The customer is never right.

Many people believe the exact opposite, which explains why tons of small businesses are flailing—overworked, underpaid, and always desperately searching for clients. They bend over backwards because of this lame misconception, and then they still end up with clients who aren’t satisfied.

Here’s why.

When someone hires you for a service, they are not merely hiring you to perform said service. They are hiring you for your expertise in delivering said service. If they knew how to execute the service, they would save their money and do it themselves!

But they don’t.

Case in point:

Many boutique branding companies start their initial conversation asking a client what they want their website to look like.

You may have heard it before… "Show me websites you like. Tell me what pages you want on your site. Send me your web copy".

These web designers/developers are turning themselves into a commodity. They are merely technicians—the hands that execute your vision. But there’s a huge problem with that.

Your vision of the pages and content you want on your site… what is that based on? Are you a website expert? Do you think it’s appropriate to build a website to the specifications of your personal tastes and thoughts, rather than those of your target audience?

What if, instead, the web developer asked you what you are looking to do with your website? That conversation would go a bit differently… Why do you want a new website? What challenges are you currently facing that you think a new website could solve?
 

Now we’re cooking with gas!

You see, ultimately, when someone “needs a new website,” what they are usually saying is they need help with their business in some way, and they think a website is going to solve their problem. 

Maybe it will, maybe it won’t. But wouldn’t it be nice if the website development company—a company that supposedly knows a lot about websites—could help the client figure that out?

By asking the big questions, we might discover that a new website won’t help the client fix their problem. I suspect that’s one reason most companies don’t ask those questions. But you need to position yourself as an authority, as someone with valuable insight the client doesn’t have. That’s what they’re paying you for.

Steve and I have our “core values” prominently displayed on our wall. One of the values that stands out is #4: “Always be in control for the sake of the customer.”

It’s your job as the expert to lead the way. That outdated “customer is always right” mentality suggests that the customer knows more than you about the subject at hand. When that happens, all bets are off. 

This is why it is in your best interest to take the reigns of any and all conversations and projects. For the sake of your clients, get down to the root of their problems and offer up effective actions.

ARE YOUR "SOLUTIONS" LOSING YOU CLIENTS?

Many businesses are walking around trying to solve people’s problems. It’s a commendable mission,  it's even the point of business- to create value for others by solving their problems.

But we’re often missing one crucial detail: we are solving a problem the clients don’t know they have. And if your customer doesn’t know they have the problem you are solving, they will not buy your solution.

So what do we do?

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Sell people on what they want, then give them what they need.

This mantra can change the way you play the sales game.

As the expert in your field, you have so much information that your customer needs to know. But your knowledge goes deep, much deeper than our initial understanding of what you do. If you include all the nitty-gritty details, and try to explain why we need something we don’t understand, you will have a hard time making the sale.

This doesn’t mean lying. Chances are, you already are selling what the customer wants, bundled somewhere in your list of services. But the purchase is based on the initial pain point, and the company that convincingly promises to solve that pain point is the one the customer will hire. And the client will be willing to pay a premium because solving the problem is their most important goal.


Example:

Brett Lavender is an exceptional public speaking coach, but he teaches communication skills that go way beyond public speaking and help his clients excel in all aspects of life. After all, when you are a great communicator, you instantly benefit in relationships with friends, family, and even strangers. 

Being a great communicator is so valuable that Brett wanted to focus on selling that skill set. But how many people actually think their biggest challenge is that they aren’t very good at communicating with their spouse, their colleagues, or their boss? And how many would be willing to pay to improve their skills? Not a whole lot.

On the other hand, tons of people have a desire to improve their public speaking skills, and they’re willing to spend a lot because they know it will pay off.

When you work with Brett on public speaking, you understand and then receive the benefit of becoming a great communicator. But Brett is going to have a much easier time selling the skill of public speaking, because that’s what people want. Once you work with Brett, you understand the value of improving your interpersonal communication skills, and no doubt will want to work on those, too. 

But Brett’s unique approach to public speaking is such a huge differentiator that it sets him apart from the competition and makes it much easier for him to sell his services.
 

Bottom line:

What do your clients need?

What do they know they need?

Which one are you selling them? 

Sell them what they want,

then give them what they need and you'll always come out on top.