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I talk a lot about my two prices, full price and free, but we haven’t discussed it fully at length all in one place. Here we have the canonical two-prices episode where we compare full price and free, discuss the problem with discounts, the one exception for using discounts, why good friends pay full price, the only reason your price should ever go down, the benefits of pro-bono, how to get pro-bono clients, the reason long-term thinking and setting the bar high is the best way to make the most money, how to run effective giveaways, and why you should never, ever, cold-call clients.

Show Notes
  • Two Prices: Full Price & Free
  • 03:53 When you charge someone full price, they will value your work at full price.
  • 04:35 When you discount your rate, you teach the client that everything is negotiable. It communicates that you lack standards and everything is up for debate. This leads to them coming back for revisions and sets the wrong precedent for the relationship.
  • 04:40 What About Discounts?
    • With Client Work: NEVER discount your rate.
      • The client will not adequately value your work.
    • With Products: ONLY to reward loyalty.
      • Discounts always devalue. If you’re going to discount products, you have to decide if the reason you’re discounting is worth selling out. The only time I make an exception to do so is to reward loyalty.
  • Discounts are always a devaluation.

  • 07:04 Yes, cheapening things will increase revenue, but at the cost of brand perception.
  • 08:53 Brands held in high regard charge full price and are unapologetic about it.
  • Pro-Bono
  • 13:47 Why would you ever want to give something away for free?
  • 13:50 When I say “free” I’m talking about pro-bono. Pro-bono acknowledges the full value of the project.
  • 14:46 For example, when a company does a $500 pro-bono project, the customer doesn’t have to pay $500, but they DO have to pay tax on $500. This is a good illustration of the inherent value acknowledgement of pro-bono.
  • 15:51 You don’t ever go to the client and say “full price or free?” That’s not for the client to decide.
  • 17:54 “Should you ever approach clients?”
  • Good friends pay full price.

  • 20:06 Stop trying to take advantage of the fact that you know someone by asking for a “buddy rate”. I respect my friends too much to do that. If you want to be a good friend, offer to pay full price and then tip really well on top of it! Give THEM the option to give something to you at no charge. Full price or free.
  • 21:39 Full Price and Free are the only two options that acknowledge the full value of something.
  • Feature Removal
  • 23:26 “If the client doesn’t have enough money, can you create a smaller, custom service for which their budget amount would be full price?”
  • 23:45 Yes. Rather than discounting your services, you can remove features. Feature removal is the ONLY WAY your price should ever go down.
  • 25:50 You don’t go into Starbucks and say “Can I pay $2 for a latte?”
  • 25:55 At some point though, feature removal is crippling and you start to cheapen the quality of the result. You can remove features to bring down the price, but don’t go too far. If you allow the client’s lack of budget to cripple the effectiveness of what you’re making, that reflects on your brand.
  • 28:36 Compromise on price leads to compromise on other things.
  • Do the Kind of Work You Want to Get
  • 32:38 When you’re doing pro-bono work to build a portfolio, you don’t have to just do it for charity organizations. Take on the projects that are the kind of work that you want to continue doing.
  • The kind of work you fill your portfolio with determines the kind of clients you will attract.

  • 33:37 Pro-bono work serves two purposes:
    1. Building your portfolio.
    2. Practicing your professionalism.
  • 33:52 When you’re doing a pro-bono project for someone and they’re getting a full-value project at no cost, they’ll be more than willing to go through your process. They’re not going to take issue with the way you work, because it’s coming at no cost to them. This makes it excellent grounds for practicing your professionalism without compromise.
  • Discounting is Compromising
  • 35:26 Ask yourself:
    • Do I want to compromise my brand perception?
    • Do I want to compromise the value of my product to get more revenue?
  • 35:49 “Does discounting always result in more revenue or is it actually LESS potential revenue in the long run?”
  • 36:15 In theory you could make more money discounting, but it forces you down that path: If you want to continue making more money, you HAVE to become a “discount brand.”
  • 38:41 It’s better for you in the long run to value your products at full price even if in the short term it means less money. You make out better in the long term.
  • 39:00 Being in the middle of the road is the absolute worst. Either value your work or your products at full value, or sell out completely. Look at Walmart. You can be successful going all out on the cheap, and going all out on the discounts. But you’ll never be like Apple. Apple has a brand quality that is unparalleled and uncompromising. When you set the bar high and don’t cheapen your products, you pave the way for growth. When you discount, you can only go down.
  • 39:46 If you’re thinking long term, if you want to be the most successful, if you want to make the most money—you need to keep things valued at full price.
  • The only way to make discounts work is to sell out completely and own yourself as a discount brand.

    If you’re playing the middle, you’re just screwed.

  • Giveaways
  • 42:20 “If you give something away for free, is that different from discounting something when you’re talking about products?”
  • 42:46 The story of the free t-shirt.
  • 44:41 If you’re giving away something that is the full-valued thing for free, then people will value it that way—it’s not cheapening. Of course, if all you do is give away all the time then people will just sit around waiting to get free things. It has to be an exception.
  • 45:04 The way that you go about giving something away matters.
  • 46:10 If you’re giving away only a limited amount of something, you should have a no-commitment opt-in to enter the giveaway. Otherwise if you are requiring an action, like signing up for an email list, everyone should receive something of value.
  • How To Find Pro-Bono Clients
  • 50:08 Don’t cold-call clients. You are essentially asking them to do you the “favor” of working with you. This puts you in a position of obligation (see Influence book) where you then “owe” them for this favor. It does not set the right precedent for a professional relationship.
  • Don’t cold-call clients.

  • 51:45 Imagine if a doctor cold calls you and says, “Hey, can I fix anything up for you?” YOU call the doctor. Why? Because he’s a professional. Would you think the same of a doctor who cold-called you as you do another with whom you personally reached out to set an appointment?
  • 53:31 Start with self-initiated projects.
    • Look for problems to solve.
    • There are problems out in the world.
    • If you are a designer and you think you’re good enough to design for someone, that means you think that you’re able to solve problems.
    • If you’re able to solve problems, you should be able to identify problems.
    • If you’re able to identify problems, you don’t need a client to identify problems.
    • Look around yourself.
    • Solve a problem with your design or your skill.
    • Build a solution.
    • Document the process.
    • Make a case study.
    • Show your competence.
  • This is what will attract the right type of clients.
  • 54:17 Cold-calling a client and offering to do pro-bono almost always results in an uncommitted client relationship. The client is not going to have as much motivation as someone who sought you out with the intent to hire you. They’re not invested in the project.
  • 56:08 Instead of cold-calling the client to offer to do a pro-bono project, you can just do the project and present it to them. When you show it to them, present it like you would any paid project—as a full case study.
    • This displays your competence to the client and shows them the objective design decisions you made.
    • Let’s say there are a lot of unsolved problems with your work (this is to be expected as you wouldn’t know all of their goals without having asked), well they might just say “Actually, we have all these other things we need to account for and solve.” Now you have a foot in the door for getting them to hire you to solve those problems.
    • Worst case, this exercise works as a self-initiated project and actual case study for your website that addresses real problems.
  • 56:59 It shows this client that you’re serious. You’ve given them value, which helps display competence and establishes trust. This has a much better first impression than a cold call. It shows that you are the type of person that focuses on solving problems and providing value. This can lead to a paying job.
  • 58:39 Don’t ever just say “Here it is!” even with self-initiated projects. Show your work. Explain the design decisions you made along the way. Take them through your process the same way you would with a paying client.
  • 01:01:34 You MUST treat pro-bono clients as you do your full-paying clients. You have to treat them with the same respect. Treat those projects as real projects. The whole point of using pro-bono as a tool is to practice your professionalism. You can only do that if you treat it like a real project.
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