Are You Making It Hard For Me To Hire You?

We moved into our house 10 years ago. At the time, I made one promise: “I’m never moving again. They’re carrying me out of here in a box.”

“Why move?,” I thought. “The neighborhood is great, the schools are nearby, and the house has everything we want.”

Besides, it was such an ordeal to move that I did the math and quickly determined that death was preferable to packing boxes, painting bedrooms and killing/trapping whatever appears to be living beneath the back deck.

But, like deciding to have additional children, after a few years, the negative aspects of moving fade. Before you know it, you’ve forgotten what a nightmare it is and you’re excited about the new adventure.

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Which is why last weekend, on a recommendation from a neighbor, we wandered over to a new development going up on the other side of town.

Wow. Pretty much everything we’d hoped for in our quest to downsize, including a price that seemed about right. We put down a deposit right then and there.

As we drove away, we had two decisions to make:

Decision #1: Which model did we want? The builder offers four choices – A, B, C, D – each varying in layout, square footage and price.

Decision #2: How much of the basement do we want to finish? They charge $44 per square foot and they’ll build out as much as you like. (I suggested one square foot, just for its conversation value, but my wife rolled her eyes. Women, huh?)

Here’s the interesting thing:

Decision #1 – a decision worth several hundred thousand dollars – was easy. It took us about 15 minutes to choose model D.

Decision #2, on the other hand, one which will cost between $12,000 and $15,000, is still an open question a week later. Three hundred square feet? Three-twenty? Two-Eighty-Five? We’re not sure.

Don’t you find that odd? Why is it so much harder to settle on a (relatively) teeny number than on a great big one?

I have a theory, and it has everything to do with how you price your services and how easy – or hard – you make it for people to hire you.

Decision #1 is a flat fee; one price gives us everything in the package. It’s a big number, but it’s a straightforward, yes/no decision. It feels satisfying to make it and once we do, we’re done thinking about the money.

Decision #2, on the other hand, is a sliding scale of infinite variation. It offers more choice, certainly, but it also offers more doubt. It’s up to us to figure out where to land on the continuum that runs from finishing zero square feet to finishing the entire basement.

Flat fee pricing is better

I’ve long advocated for flat fee pricing over hourly. For any number of reasons, it’s better for you and it’s better for your clients.

But it wasn’t until our house hunting experience last weekend that I realized one additional benefit: Flat fee pricing makes the buying decision easier for your prospective clients (even if the number they’ll end up paying is considerably larger than if they bought the same thing on an hourly basis).

Take a minute, please, to read that last sentence again; it’s the point of today’s newsletter.

With flat fee pricing, prospects take action more quickly and feel more satisfaction during the course of the project. Money is a simple, one-time decision.

Hourly pricing, on the other hand, is more like our basement build-out choice:

First, your prospects have to decide if your hourly fee feels appropriate. (Didn’t you pause a few paragraphs back and wonder if $44 per square foot seems reasonable?)

Next, they wonder how many of those hours they’ll have to buy to get the job done.

Finally, and throughout the course of the project, they’re constantly adding up the time and doing the math.

Here’s the bottom line. I acknowledge that flat fee, project-based pricing doesn’t work in all cases; plenty of jobs and projects, by their very nature, demand an hourly structure.

But plenty of others don’t.

So here’s my advice: Try and create and offer flat fee packages and programs, even if some of your other work remains hourly.

You’ll sell more and earn more, more easily. And, the people who hire you will be more satisfied with the result.


Discussion Questions:

  1. Does your spouse roll his/her eyes at your brilliant ideas? Give examples.
  1. What do you think is living beneath my back deck?
  1. On what basis do you price your services?

Share your comments below!

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12 thoughts on “Are You Making It Hard For Me To Hire You?

  1. Leslie Lawton

    Love this. And your discussion questions have me laughing out loud, right here with the cats looking up, like a bomb just dropped.

    I do the eye-rolling.
    Raccoons.
    Project price. Always.

    Thanks for the laughs and making your advice so memorable. Love your emails.

    Reply
  2. Charles

    1) Wife: I’m feeling like sushi and a nice bottle of wine
    Me: I was gonna smoke this log of bologna and I just found some pale ales that were lost in the back of the fridge. That’s good right?
    Wife: (eye roll)
    2) Probably the bologna I was forced to throw out. Be good to it.
    3) I only charge flat fee. I have a single video price, package of three videos (most popular), and a monthly option. All 90 seconds each. I couldn’t imagine trying to charge by the minute.

    Reply
  3. Bruce Horwitz

    1) my wife never rolls her eyes…she just tells me I’m wrong!
    2) The ghosts of the failed businesses of clients who lacked the insight to hire you – they really missed out and are trying to get as close to you as possible.
    3) My usual business model is a monthly retainer, since I position myself as a member of the team…just part-time. The workflow may be up-and-down month to month but isn’t that the case for a regular W-2 Director of Intellectual Property too? The retainer model is like a part-time salary. For clients whose needs are so limited that a retainer doesn’t make sense, I work on a fixed-price, task completion basis. Sometimes I might be off high, other times low, but if I’m doing my job right my relationship with my clients is such that it works out over time. Again, this is a workable model since I have an on-going relationship with my clients and not doing one-off gigs.

    I never, repeat never, charge by unit time. I’m being hired for the value of my contribution to the business, not how long it takes for me to make that contribution.

    Reply
  4. Harold Waisel

    I can absolutely hear you asking about 1 square foot. That was a true LOL.
    1) Eye rolls, head shakes, disavowal of knowing me. And that was just today.
    2) I’m guessing it’s a large pile of rough drafts of newsletters, because the real ones are just about perfect
    3) Trying very hard to package price. For one client, included one trip/month as well so that there’s no surprises.
    BTW – finish the whole basement. Your future grandchildren will appreciate it, and you’ve got a man cave for awhile.

    Reply
    1. Michael Katz Post author

      1. Story of my life.
      2. You might be right.
      3. Ouch! That’s a huge basement. I’m thinking 325 but will keep you posted!!

      Reply
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