Author’s Note: this is one of two seemingly unrelated Bredemarket blog posts that form a cohesive whole. Actually PART of a cohesive whole.
- Why I Raised Bredemarket’s Consulting Package Prices (this post)
- Bredemarket Inland Empire B2B Services: Iterating LinkedIn/Facebook Page/Group Names
I’m making a lot of changes at Bredemarket right now, but I haven’t announced all of them.
For example, when I discontinued two of my editing packages (see my previous post “Bredemarket announcement: discontinuation of editing offerings”), I simultaneously raised the prices of two of my writing packages. I didn’t make a formal announcement at the time, for the obvious reason that potential clients usually don’t respond positively to a price increase.
But as I thought about it some more, I realized that there are benefits to explaining why I raised my prices, both from a “macro” perspective and from a “micro” perspective. (Yes, my BA is in Economics.)
Once I explained my rationale in raising consulting package prices, I knew that some potential clients would NOT want to do business with Bredemarket, but that other potential clients definitely WOULD use Bredemarket’s services. And I want to work with the latter group, because they pay better.
Service pricing from the macro perspective
Simplistically, there are two price tiers for people like me who offer writing services. I won’t characterize them with positive or negative adjectives, but those two tiers can be decribed as follows.
One pricing tier for writing services
One of the pricing tiers is definitely lower than the other tier, and these writing services can be provided by anybody, in any location, for a low price.
In fact, price is the main driver for clients who pursue writers in this tier. This Reddit comment illustrates how conversations between contractors and clients proceed in this lower pricing tier.
I had this exchange last week:
Guy: What is your rate for 1000 words?
Guy: That is so expensive! My other writers do that for $10-15.
Me: Then why don’t you get them to do it?
He was not very impressed with my tone. I burned that bridge, I guess. Damn shame.From https://www.reddit.com/r/freelanceWriters/comments/8e24y1/gee_1_cent_per_word_you_are_a_generous_one_idiots/dxsn8fb/?utm_source=share&utm_medium=web2x&context=3
Ironically, as another commenter pointed out, this contractor’s pricing isn’t all that high either. Let’s do the math:
- $10 for 1,000 words works out to $0.01 (one cent) per word.
- $50 for 1,000 words works out to $0.05 (five cents) per word.
In order to make a decent living at these rates, you have to write quickly.
- Assume that you’re in the United States and you want to make the oft-quoted “living wage” of $15 per hour.
- But since you’re a contractor and not an employee, you actually need to add at least 50% to an employee’s hourly rate to cover self-employment taxes, health insurance, sick leave, vacation, down time when you’re not consulting, and everything else.
- Which means that if you want to make $22.50 per hour on a 1,000 word project at five cents a word, you need to complete that writing project in…27 minutes.
And now you know why so many pennies per word writers live in the Third World. They can afford to live on these rates.
And why the “guy” quoted in the Reddit comment above didn’t immediately go to his $10 writers. I guess his $10 writers weren’t turning out quality writing at those rates.
The other pricing tier for writing services
Some writers choose not to compete on price, instead competing on expertise and level of service, and/or by targeting a particular clientele. Morning Brew cites a Business Insider behind-the-paywall post about one high-end offering.
Some ghostwriters on LinkedIn are making $500–$700 an hour writing posts for high-powered execs and LinkedInfluencers, according to Insider.From https://www.morningbrew.com/daily/stories/linkedin-ghostwriters-hourly-rates
First, look at the market these ghostwriters target: executives and influencers. While the term “LinkedInfluencers” has extremely negative connotations, there are people on LinkedIn who write posts to achieve very specific (and measurable, attainable, realistic, and timely, or SMART) goals, such as talent attraction, lead generation, or revenue realization.
To help their clients reach these SMART goals, the ghostwriters need to provide a superior level of service. The ghostwriters must understand the clients’ goals for the project and work closely with the client to ensure the final written text addresses those goals.
Finally, the ghostwriters need to have one or more types of expertise.
- General expertise in writing. Can the ghostwriter effectively communicate the client’s message, incorporating a focus on the client’s customers and an explanation of the benefits the client’s customers can realize by following the client’s advice?
- Expertise in the client’s industry. Can the ghostwriter communicate the client’s message in a way that is convincing to the client’s customers, and in a way that establishes the client’s expertise?
- Expertise in LinkedIn. Can the ghostwriter produce something that readers on LinkedIn will find? I hesitate to use the word “viral” because of its negative connotations, but if a client wants a LinkedIn article to be read by potential purchasers of electric cars, then the article has to be written in such a way that it will appear on the LinkedIn feeds of potential electric car purchasers.
Guess what? You’re not going to get someone to write that for $10.
Service pricing from the micro perspective
Now let’s look at (some) specifics of my own business, and how my initial pricing affected my business. I’m going to concentrate on two of my service packages: my Bredemarket 400 Short Writing Service and my Bredemarket 2800 Medium Writing Service.
When I initially started Bredemarket and created these (and other) service packages, I already envisioned that these offering would include production of one (or more) drafts with review by the client, and submission of the final copy.
And then I started offering both packages to clients, with rates that fell between the $0.01 per word category and the $700 per hour category. Over the next 16 months, I worked on client projects based upon these packages and prices, using Toggl Track to keep track of the time I actually spent on each project.
At the same time I iteratively expanded my process for completing these packages, adding more value to my offering by beefing up the beginning stages of the project (most recently by incorporating new kickoff questions based on Simon Sinke’s Golden Circle) and adding additional services through the course of the project.
At the beginning of 2022, I audited these hours to see the time that I spent on each package project. Then I asked myself: if I had charged my hourly rate instead of the package rate, would I have made more money with the hourly rate, or more money with the package rate? I figured that if I would make more money by charging an hourly rate, then I was losing money with my then-current package rates.
Guess what? I was losing money (from an opportunity cost perspective) because I had underestimated the hours that I would spend on these package projects. In some cases I would have made twice as much at my hourly rate than I did at the package rate.
To address this opportunity cost revenue gap, I had two choices:
- Work faster by doing less. (“Who cares about benefits? Who cares about your goals? I’ll just put some words together and we’ll be finished. No, this doesn’t include HAVARD citations.”)
- Charge more by raising my consulting package pricing.
Rather than reducing the level of service I provided to clients, I chose to raise my consulting package pricing.
But should I tell anyone that I raised my consulting package prices?
If you look at the September 2020 description of my Bredemarket 400 Short Writing Service above, you’ll see that I didn’t provide my package pricing. I just said “$Quote.” I figured that I would only share this pricing with potential clients who were well into the sales funnel.
This is not uncommon for service providers or product providers. How many times have you gone to a company website to find the price of something and encountered the words “contact us for pricing” or something similar?
In essence, the company will have a salesperson contact you, explain the benefits of the solution in question, and THEN quote the price after you are awed and dazzled by the solution’s benefits.
But there are other views on the matter of exposing vs. not exposing pricing, and there people who state the benefits of providing transparent pricing for services. You can find many sources for the “show pricing” argument, but I like the way that Pia Silva stated the “show priing” case in this Forbes article. Here are two of Silva’s benefits for this approach:
Pricing transparency immediately weeds out bargain shoppers, which are people I’m not interested in working with. If you want a healthy, profitable service business, you must have a decent margin on your work, and that will never be in line with a customer whose only concern is the price point (which is a short-sighted way to make business decisions)….
I believe the best way communicate [values]…is by doing something very transparent that demonstrates integrity, i.e. being upfront about our pricing and not changing it based on what we think the client can afford.From https://www.forbes.com/sites/piasilva/2018/09/26/should-i-put-my-prices-on-my-website/?sh=43c2aed314f5
So my pricing for the Bredemarket 400 Short Writing Service and the Bredemarket 2800 Medium Writing Service is now public. But there’s a catch.
I’m not posting the pricing in this blog post. (What if I decide to raise the prices in May 2022?)
I raise my prices often…Pia Silva, from https://www.forbes.com/sites/piasilva/2018/09/26/should-i-put-my-prices-on-my-website/?sh=43c2aed314f5
I’m not even posting the pricing on the two web pages in question.
What happens when you read one of the two brochures?
- You read a high-level description of the service.
- You see a cutesy picture of a town crier or library, as appropriate.
- You read about the Bredemarket content creation process. While there are slight differences between the Bredemarket 400 and Bredemarket 2800 content creation processes, each process is extensive, with nine steps. I’m not in the business of “you ask me to write something, and I’ll complete it 27 minutes later.”
- Only AFTER you have read about the service and the content creation process do I provide my pricing. It’s kind of like a traditional sales pitch, but in written form.
So if you’re in the market for writing services, go to either of these two pages and download the brochure at the top of the page.
For written content between 400 and 600 words, go to the Bredemarket 400 Short Writing Service page.
For written content between 2800 and 3200 words, go to the Bredemarket 2800 Medium Writing Service page.
Once you download the appropriate brochure(s), you’ll have one of three reactions:
- “I can get writers to do that for $10-15!” (I burned the bridge with you, I guess. Damn shame.)
- Sorry, but you sound amateur. I need a real expert. I’ll find someone who charges ten times that amount and get excellent service.
- Hmm, that sounds about right. When can we talk further?
Well, if you’re in the third group and want to talk further…