Does old money "baggage" prevent you from charging what you should?

| 23-min read

If your palms sweat when someone asks, “What do you charge?” this episode is for you.

In Episode #458 of the Marketing Mentor Podcast, I had my third in what is clearly now a series of chats with writer and coach, Austin L. Church, who has some very interesting ideas about the limiting beliefs we hold about money and how it affects the pricing of your freelance services.  

We both agree that money is complicated, especially for creative professionals trying to earn a living from their creativity.

But it doesn’t have to be that way and in this encore episode, Austin shares his take on pricing your creative services. (BTW his take is similar to mine – but different enough that you’ll learn something new, which is the point, right?) 

I forgot to ask Austin about a baby step so I’ll give you mine – use practice prospects to get in the habit of practicing this conversation when the stakes are low.

That way, you can, little by little, let go of this heavy money baggage and ask for (and get) the fees you deserve or, as I like to say, better projects w/ bigger budgets. 

So listen here (or below) and scroll down to read the full transcript.

And if you like what you hear, we’d love it if you write a review, subscribe on Apple Podcasts and sign up for Quick Tips from Marketing Mentor. 

Read the transcript of Episode #458 with Austin L. Church

ilise benun

Hi there. This is Ilise benun, your Marketing Mentor. And this is the podcast for you if, and only if, you are ready to leave the feast or famine syndrome behind, and I mean for good.

Money is complicated, especially for creative professionals trying to earn a living at your creativity. But it doesn't have to be that way, and today my guest Austin L. Church returns for an encore episode to share his take on pricing your creative services. 

By the way, his take is very similar to mine, but different enough that you'll learn something new, which is the point, right? So, listen and learn.

Hello, Austin. Welcome back for your third episode in the series to the podcast.

Austin Church

Hello, ilise. I love the series. Thanks for the invitation.

ilise benun

You're welcome. And who knows how long the series will go, because we definitely keep having things to talk about.

Austin Church

We do.

ilise benun

So today, and I think we kind of hinted at this in our 2nd conversation, Episode #455, which I will link to also, but we decided we need to talk about pricing for freelancers and creative professionals. And I know that you've been working on that idea, and maybe even working on a book, maybe it's even finished, so you can give us a little update on that. But first, tell the people who you are, please.

Austin Church

Well, my name is Austin L. Church. I am a freelancer and freelance coach and consultant and writer and more other things I won't go into, and I love talking about pricing—which I think makes me a bit of an odd duck. What do you think? 

[Laughter}

ilise benun

Yeah. You are an odd duck, and including for that reason, but we're birds of a feather, as they say, because I love talking about pricing and I love the money conversation, and those two things are inextricably linked in my mind and in my process.

So, I think where I want to start with this is to talk about the complicated relationship that people have with money, and especially as it relates to creative professionals and freelancers. And you can speak for yourself, as well as the people that you know and work with. I always appreciate the personal side, so let's start with that. Do you have a complicated relationship with money, Austin?

Austin Church

I'll say it's a lot less complicated than it used to be, and I can tell a very short story that illustrates this. 

So, I went and did my master's in creative writing, focus in poetry. Finished the program in 2008. Soon after, I ran into one of my old colleagues who is getting his PhD. Ran into him in the grocery store. We were catching up, doing what colleagues do. He asked me how I was spending my time and I said I was working at a marketing agency.

And he harrumphed, you know, he just kind of snorted and he said, "What's it like bastardizing your writing gift?" 

And it didn't even hurt my feelings. I just realized that I was talking to a paradigm that I didn't really share anymore. And now that I've talked to hundreds of freelancers, I've realized that my creative writing program wasn't the exception. A lot of us make it into adulthood without ever really examining our beliefs about money. 

I think those of us who have an arts or liberal arts background even pick up some extra baggage when we have deeply-conflicted feelings about the relationship between art and commerce, or our creative talents and making money off those talents.

So I knew in that moment when I was talking to my friend that I had actually let some of those beliefs go; I'd started to upgrade them. But I just found it very, very curious that his assumption was that my writing talent couldn't be pure, in some respect, if I were monetizing it. And I just thought, "Oh, I actually don't believe that anymore. How curious." So that's one story that kind of illustrates.

ilise benun

Yeah, so let me make two points about that. One is about the first book I wrote. I'm just saying it so I don't forget. And the other is about the idea that you weren't offended, you didn't take it personally when he asked you that question—which is kind of rude I think, just hearing it out of context.

Austin Church

It was rude at the time. You're right. You're right.

ilise benun

But it's not actually something that has anything to do with you. And I love to see and hear those moments as just him talking about himself, really, and how he sees things, and as you're saying, what his perhaps limiting beliefs are. Again, nothing to do with you.

Austin Church

That's right.

ilise benun

And you reminded me about the very first book I wrote. It was called The Art of Self-Promotion, in 2001, I think. And before that, for the five years or so before that, I had been also studying creative writing just because I wanted to get better at writing, not because I wanted to be a poet or a writer or anything. But it was very literary, and the thing that was really interesting was that when I got my first book deal, I stopped studying writing and wrote The Art of Self-Promotion, and everything I had learned helped me so much in writing a very commercial book.

Austin Church

I love it.

ilise benun

So yeah, that was actually never a belief that I held, but I know a lot of people do compartmentalize and imagine actually also that somehow money, or the commercialization or the monetization of "art" taints their art, which I don't think so at all, either.

Austin Church

Well, I'm really glad that you brought up that idea that that wasn't a belief set that you had. And I think those of us, and I would definitely put myself in this category, those of us who grew up with very complex relationships with money need to meet people who have a pretty matter-of-fact relationship with it. It's a tool. You can use it for doing good. You use it to pay your bills. Some people develop an unhealthy attachment to it and obsession with it. Some people do that with their cars, some people do that with food, some people even do that with exercise. So, it's just something that humans do.

ilise benun

Or other people.

Austin Church

Or other people. Right? So some people ... We're really good at ruining things for ourselves if we become fixated on them, right? 

And so, I think creatives in particular need the ilises of the world to raise an eyebrow and say, "Well, I don't believe that. Tell me how you came to believe that," so that we can honestly divest ourselves of beliefs that are holding us back, and more importantly, just aren't true. 

There's more counterexamples, there's more evidence that a different or opposite belief is true than there is evidence that this belief we have, that's probably more an artifact of childhood than anything, this belief that we have is true. Many of mine, I believe, weren't true.

ilise benun

Right. And even if it was true early on in some form or another, I like to think about it as having an expiration date and it being way past its expiration date. Because now you're self-employed, and whatever they told you, they didn't know you were going to be self-employed and would need to deal with money and have the money conversation. Otherwise, I don't think they would've embedded all of that ‘garbage,’ if you will, in your head.

Austin Church

That's so true. And we really are birds of a feather because I talk about beliefs having a half-life, where they start out as being powerfully true perhaps, but over time they become less and less and less true. And then, when you make it into adulthood and you finally put them out on a table like artifacts, and you pick them up and you turn them over and you examine them one by one, and you say: "Is this sometimes true, always true, or certainly false? And can I find counterexamples?" 

And to your point, when I looked around and I met the ilises, and even I met very successful and even critically-acclaimed artists and poets and writers who were wealthy, suddenly the belief broke. And I thought: "This just doesn't work anymore. Which beliefs will serve me better?" So, that's been my journey at least.

ilise benun

Yeah. And I think I was definitely lucky to have been raised by, what I would call, in retrospect, ‘a slimy salesman’ who, when inflation happened, I remember very clearly in the '70s, he said, "Well, things are getting more expensive. We're just going to have to make more money," and went out and did it.

Austin Church

Wow.

ilise benun

And that's what I watched. That was my model. And so that's my attitude that I'm bringing to the world now.

Austin Church

Well, we need that, and I think I'm much closer to that now than where I was before. And I have evidence for that because I taught this cohort-based course called Business Boot Camp for Freelancers. And I was checking in with all of the students afterwards, and ilise, I was shocked when I asked them: “What was most powerful or important for you?” And they were all talking about matter-of-fact conversations about money. It wasn't my brilliant intellect. It wasn't all of my just earth-shattering ideas.

They were like, "It was finally nice to have an open, and to some degree, dispassionate conversation about money with peers, with other people who want to make more money but may have secretly felt guilty about that desire. Oh, and wait, you too? And you too? And you too?" 

There was this one guy in the group, Jay, his story was very similar to yours. He was like, "I don't know what the big deal is. I've just always seen money as a tool." 

And everyone else was like, "Oh, that's so healthy." Right? So, that's me.

ilise benun

And I want to talk, then, a little bit more tactically about how to price one's services, one's creative services, one's freelance services. And I actually happen to be giving a presentation later today to a class of a former client of mine, and it's about proposals, but she said yesterday, "Oh, could you also talk about how they should approach pricing, because they're asking."

So these are students who are in college, and maybe they've done some things on the side, but I thought it would be a good opportunity to throw out there my approach and what I plan to tell them, but also to hear if you have a different or similar approach.

Austin Church

Great.

ilise benun

So my approach is very simple and it has nothing to do with any kind of ‘going rate.’ Everyone always imagines, “Oh, there's a going rate for this and a going rate for that,” but I disagree. I really don't think there is. And if there is, the clients don't know about it, so it's not going to help you.

So the way I approach it is it's a three-step process where you, number one, figure out what you need, what your floor is to survive, right? To cover your expenses, to make a profit. You need to know what your bottom line is in terms of your hourly rate, and then use your hourly rate to build a project fee. 

And step two is you find out in the money conversation—which is hopefully the first conversation that you have with a prospect after you've demonstrated your value, not before—you ask and find out what they can pay, what they can afford, what they have in mind, what their budget is. Those are all kind of variations of the same question.

And then step three is you come to a price together—so that each project is kind of custom priced, maybe eventually you have some standard pricing because you do the same things over and over. But I really think pricing is a collaborative experience with a prospect that allows you to see how easy they are to work with, to talk to, to bring things up with, how flexible they are, how responsive they are. It's just a perfect experience, practice experience, before you ‘jump into bed,’ as it were, with them.

So that's what I tell people to do, but they don't like that because it's not a formula and that means they have to talk about it over and over with different clients, and that's just not what they're looking for. But I think that's what works best, eventually, so I'm curious both what you think of that and how do you answer that question?

Austin Church

Well, what I think about it is that it is very honest and very succinct, and I'm pretty good at the honest part; I'm not so good at the succinct part. 

So, my process is very, very similar to yours. It is more formulaic. It starts with a survival rate, and it's very similar to that baseline that you talked about. What do I have to make as an effective hourly rate in order to support myself, pay my utilities bill? What is that number? 

And then I have some calculations for helping people change that number based on how many hours they can realistically work in a year or in a given week—and it's never as many as they think—how many weeks of vacation or time off or sick leave do they need to realistically expect to take?

So, try to find a realistic, and I call it ‘survival rate.’ This is how I break even. And I'm with you in that, regardless of all of the talk about not trading time for money, I still think an hour of time is the best basic unit of measurement for calculating private project fees, the ones where you are satisfying your own need to know whether this price is sustainable or not. So, that's the survival rate. 

Dream rate is exactly what it sounds like. I would love to make closer to this per hour. And then I tend to think of those two rates as bowling alley bumpers, where you step up to bowl with this particular project and, ilise, it's exactly like you said: you may bounce back and forth between the two bumpers as you're having a conversation with your client, and they didn't have the budget that you wanted and so you're like, "Okay, that's fine. Let's dial back the scope accordingly. What would you like to remove?" And there can be compromises on both sides. 

And to your point again, if the client is unwilling to compromise, come down a little bit on scope or come up a little bit on price, that's a pretty good indication that this person won't be a great client to work with if they're uncompromising.

So my approach is very similar to yours, I just maybe include a bit more numbers because it's kind of the way my mind works. 

My basic rule of thumb, and I'll end here, is: what amount of money would you feel great about making for that amount of work? And I really do think it can be as simple as that a lot of the time.

ilise benun

So I just want to underscore a couple things you're saying, also. One is that your dream rate, essentially, is where you start in the conversation with the client. You don't tell them, and you're not giving them your hourly rate anyway, but you build your project fee, let's say, on the dream rate, starting high and then, if necessary, compromise, adjust the scope, coming down. And both of those things I think are anathema to a lot of creatives who think, number one, "I should never come down off of the price I give; I've got to stick to my guns." I don't know where that idea came from, but a lot of people seem to believe that.

Austin Church

They do. Yes.

ilise benun

And also the fear of starting high, right? Putting a number that's too high out there, and then they're going to vanish in thin air—which actually does happen when you're not in real time with them, sometimes. When they see that high number, they may in fact ‘ghost you,’ if you will. And that's why I always insist on having the money conversation in real time.

Austin Church

So you bring up a good point that freelancers are uncomfortable with that idea of starting high because what if that causes the client to walk away in a huff? And to freelancers, I would say two things: 

One, most of the time that's not going to happen. If they do get sticker shock, then you can have a follow-up conversation with them. And then if they ghost you after that, well, that's again more on them than it is on you. It's not really about your price.

The second thing is strategically, for your positioning, I think it's better to start high and come down a little bit on price if they're willing to come down a little bit on scope, because you do not actually injure your price or your positioning when you come down, as long as you reduce scope, too. So, I think you create a better overall impression of your authority, your expertise, your results, if you are the more expensive option. And 13 years into freelancing, I've become convinced of that, I'll say.

ilise benun

So, I have a couple more questions for you and then we're going to need to wrap up, so we might have a Part Two about pricing because there's just so much to talk about. But I know that you have written about and mentioned that you see pricing as risk management, and I imagine this is one of the ideas in your book. So tell us about what that means and how it relates to the book. I'd love to hear about the book.

Austin Church

So, great question, and I do love talking about this. I'll try to be succinct. Risk management. So, when freelancers are first getting started, we often charge hourly, and that passes the risk to the client because if they change their minds, if they ask for more stuff, if they ask for edits, whatever they ask for that's outside of the original agreement, well, you start the clock and they have to pay more for it. So, you pass the risk to the client when it comes to any sort of change order or scope creep.

The problem with that is whoever takes the risk gets the upside—and I learned that pretty early on with one specific project where I wrote quite a few bits and pieces of ad copy for a bank, and I think I ended up billing them for 10 hours. And I worked very quickly, and then when I saw that total for my invoice—I was charging $40 an hour at the time, this is two months after I got started freelancing—$40 an hour, 10 hours, $400, and I just was so disappointed. It was a gut punch. I was happy to have the money, but I knew I had created a lot more value than I was getting paid for. 

And I realized that the hourly model was penalizing me for my skill, efficiency, and expertise. So that model, the hourly model, it passes the risk to clients. But as soon as you as a freelancer understand your work in different types of projects well enough to control how much time is required, well, it makes a lot of sense for you to take back the risk by pivoting to a flat fee or a fixed price, fixed scope model. Because if you take back the risk, meaning there's always the risk that the client could ask you for extra stuff and it might take time you hadn't originally considered, but if you take back that risk, well, you get the upside, because if you do finish the project quickly, your effective hourly rate can go through the roof.

And then in the book, or at least the section about this risk management idea in the book, I just break down how risk is managed with seven different freelance pricing models, and about how each model is a tool—so let's not call charging hourly ‘a bad model.’ Let's just call it ‘a tool,’ like a paring knife that has some jobs that it's good at in the kitchen, but you really shouldn't take it out when you're trying to cut through a watermelon. Right?

So pricing models are tools. They help you minimize risk to yourself, maximize your earning, and ideally, strengthen your positioning. Each tool does those three jobs more or less well, and so when you're looking at a new freelance project, pick the pricing tool that is best for the job.

ilise benun

And you may not know, right off the bat, which it is, but that's where I like to bring in this idea of just experimenting, essentially.

Austin Church

Yes. Yes.

ilise benun

And trying things out and seeing what works and what doesn't work, and then do it better next time.

Austin Church

And even with the same client on project number two or project number three, you can change your model. 

You're not locked into hourly just because that's what you led with. And you bring up a great point, which is that mindset of, "I'm a scientist in a laboratory designing experiments, and when they don't go the way I hoped, well great, what will I do differently next time?"

ilise benun

Exactly. All right, we are going to need to wrap up, but just last question, what's the book called? When's it coming out? How are you publishing it?

Austin Church

Book is called Free Money. That's the working title. When is it coming out? ilise, I don't have a good answer to that question. I'm going to self-publish it, unless a publisher shows up out of the woodwork and says, "Give us your book," which I doubt will happen. 

But I'm about 30,000 words in, and I don't have a whole lot more I want to add, so I would say that the manuscript will be complete within a week, week and a half. And then after that, I'll be looking for an editor. So if there are any editors in your audience who would love to read my attempts at making a fairly dry topic more entertaining and palatable, well, find me on LinkedIn.

ilise benun

Awesome. I have a feeling there will be. So, consider that a pitch.

Austin Church

Great.

ilise benun

All right, Austin. So, I'm sure we'll talk again, probably about pricing, sometime soon, but thank you so much and tell the people where they can find you and your material online.

Austin Church

Thank you, ilise. Anyone listening, come say “hi” on LinkedIn. Say “hi” on Twitter or head over to freelancecake.com.

ilise benun

Awesome. Thank you, Austin.

Austin Church

Thank you. Always a pleasure.

ilise benun

Oops, I forgot to ask Austin about a baby step, so I'll give you mine. 

Use practice prospects to get in the habit of using this new mindset and practicing this new conversation when the stakes are low, so that you can, little by little, let go of that heavy-money baggage and ask for and get the fees you deserve—or as I like to say, ‘better projects with bigger budgets.’

So, did you learn a little something? I hope so, because that's how this works, one baby step at a time. Before you know it, you'll have better clients with bigger budgets. Speaking of better clients, they're probably not going to fall in your lap. That's why I keep hawking my Simplest Marketing Plan. If you want to build a thriving business on your own terms, watch for the brand new version coming in 2023. It will be simpler than ever. Get on the list to hear about it by signing up for my Quick Tips from Marketing Mentor at marketing-mentortips.com. I'll be back soon with more conversations with creative professionals who are doing what it takes to ditch the feast or famine syndrome. Until next time.

 

Related Marketing Ideas

  Back to blog