When a client requested ongoing support, I knew they'd need approximately 20 hours in the first quarter for integration work, setup, testing and training. So I'd say, "It will be 20 hours minimum per quarter. Which is $4,000."
However, they hesitated. Meetings got scheduled. Budgets got reviewed. Scopes changed a couple of time. And three weeks later, still no answer.
So, I tried something different with the next client. Same situation, clear work scope, same amount of expected work. This time I said: "5 hours minimum per quarter. Which is $1,000."
When I received a response a few hours later, I was surprised. They said yes!
Interestingly, the last client asked for 22 hours in the first quarter and paid $4,400. More than the first client would have paid!
What just happened!? I used to think that, my job was to accurately estimate what a client needed and quote that number upfront. After losing a few opportunities, it's not.
That's when I learned something new: the price is what they agree to, and the cost is what they actually spend. Why they looks and sound the same, they are different numbers. More importantly, the psychology around each is completely different.
When someone sees "$4,000 minimum," they think, "that's a big commitment. What if we don't need that much work? What if it doesn't work out? Let me check with finance."
On the other hand, when someone sees "$1,000 minimum," they think, "That's reasonable. We can do this."
The first framing invites scrutiny. The second invites action.
Interestingly, the work doesn't change. Still takes 20 hours. The support still costs the same per hour. The total invoice ends up being almost the same. What changes is how they feel saying yes the first time.
I used to resist this approach for a long time. It felt like I was underselling myself or playing games with pricing. However, that is not what is happening.
A low minimum is not a discount; it's a door. The cost walks through later, naturally, once they already trust you and see the value of the work.
So when you are pricing your work, don't anchor on what they'll spend. Anchor on what they'll agree to.
The price gets you in. The cost is what happens once you're there.
-Ahmed
However, they hesitated. Meetings got scheduled. Budgets got reviewed. Scopes changed a couple of time. And three weeks later, still no answer.
So, I tried something different with the next client. Same situation, clear work scope, same amount of expected work. This time I said: "5 hours minimum per quarter. Which is $1,000."
When I received a response a few hours later, I was surprised. They said yes!
Interestingly, the last client asked for 22 hours in the first quarter and paid $4,400. More than the first client would have paid!
What just happened!? I used to think that, my job was to accurately estimate what a client needed and quote that number upfront. After losing a few opportunities, it's not.
That's when I learned something new: the price is what they agree to, and the cost is what they actually spend. Why they looks and sound the same, they are different numbers. More importantly, the psychology around each is completely different.
When someone sees "$4,000 minimum," they think, "that's a big commitment. What if we don't need that much work? What if it doesn't work out? Let me check with finance."
On the other hand, when someone sees "$1,000 minimum," they think, "That's reasonable. We can do this."
The first framing invites scrutiny. The second invites action.
Interestingly, the work doesn't change. Still takes 20 hours. The support still costs the same per hour. The total invoice ends up being almost the same. What changes is how they feel saying yes the first time.
I used to resist this approach for a long time. It felt like I was underselling myself or playing games with pricing. However, that is not what is happening.
A low minimum is not a discount; it's a door. The cost walks through later, naturally, once they already trust you and see the value of the work.
So when you are pricing your work, don't anchor on what they'll spend. Anchor on what they'll agree to.
The price gets you in. The cost is what happens once you're there.
-Ahmed