Winning my first $60K client.
20 minutes in the call I was told ” Yes, let’s proceed. ”
After six days of back and forth negotiations, we had finally cracked our first $60K client in Feb 2015. It felt great, and I was ecstatic. I could never fully comprehend why they chose us when they had a 40% cheaper alternative.
In 2010 I had an interesting conversation with one project manager.
“How do I say this nicely. You need to charge more money” he said. I took a full minute to comprehend while my eyes lingered to detect any sarcasm. My client was asking me to charge more money with a straight face.
Slowly sipping away on his coffee he continued “Project managers won’t even blink an eye if you charge in the vicinity of $1200-1500 for junior devs per day. In fact, the way this has worked out for us I am asking you to charge us $1800+/day. I will get that approved.”
The suggestion came from one of our clients (PM) at the Australian government. Ten days of full-time work and I charged them $8000. Our first year in business and possibly the easiest money we made. The work was doing pure HTML/CSS.
Five years later I realised that I could have gotten away with charging $22,000 for the same job.
I felt great that a client was asking me to charge more, but I attributed that to our great work and did not pay a lot of attention.
For 3-4 years we attracted clients with small budgets. We thought we provided quality work, were better than most digital agencies, got all the work done in-house without outsourcing and yet managed only to attract “constantly bargaining” clients.
There was something fundamentally missing, and we could never crack that part of the puzzle.
We improved our proposals, rethought our sales strategy and even focussed on writing incredibly detailed plans. One of the business owners just browsed through a custom 30-page proposal and in 20 seconds jumped to the pricing page right in front of me. I felt offended. There was something wrong. We did not win that client.
Towards the end of 2014, I and my co-founder sat down and started discussing what we could do to win more “wealthier” clients. It must be tough I argued even without fully believing that myself.
Christmas 2014 I and my wife walked into a grocery store to pick up some sugar. My wife chose a local brand whose price was in the medium to high range. We paid for it, and while walking back to the car, I asked her why she did not buy the one that I usually buy.
Her exact words were ” This is a little expensive, so it must be good. Let’s try it.”. I was intrigued.
One of my friends worked at the local sugar factory as a production line engineer. The factory produced sugar packaging for all brands from the same production line.
In 2015, I decided to quote arbitrary prices to test my hypothesis. There was a risk involved, but it was worth taking as we were not growing.
I doubled my prices for the first few quotes. Some prospects immediately disappeared on hearing the prices while some continued their negotiations. Surprisingly, we signed one for 27K.
At some point when I thought that we had enough work for a couple of months, I decided to notch the price by 3x.
In Feb 2015, I signed my first 60K client. 2015 has been a year of phenomenal growth for us.
If you are struggling with low paying clients it’s worth thinking that “Perception of the value you will provide is important than the value, you will provide”.