 And they say, you know, maybe one of their first questions is, so how much does it cost for you to like build a website for me? And then you have to have that conversation about, well, it's not quite that simple. It's, there's a lot of work that goes into discovery and what your goals are and everything. So today we're going to be going over some of the different strategies and models that you can use for pricing so that you can make more money and hopefully not be bound by the limitations of the hourly rate, which we'll be talking about. So this presentation will be online. The video will be on wordpress.tv within a week or two and the slides are available right now at these, at this link here. So my name is Jeff Myers. I'm one of the four co-organizers of this WordCamp and I'm also a co-organizer of the local Milwaukee WordPress Meetup Group. So if after this, after today you're, you're eager to continue the conversation, feel free to come if you're in the area, feel free to come to the Meetups this year. We'll be announcing those on meetup.com. So I was a speaker at a WordCamp Milwaukee earlier or last year. I have a digital marketing agency. So I do digital marketing consulting and strategy but I've really been sort of shifting my focus into custom web application development using WordPress as an application framework. So that's sort of been my late, my most recent shift and I absolutely love doing that kind of stuff because I can use WordPress to its full extent of capabilities and it's amazing. So I've been doing this for 13-ish years since 2004 and I'm sort of the awkward intersection of design development and sort of business marketing. So if I had to pick one, I would say I'm a developer but because I'm constantly working at that intersection of those three things, I think there's a lot of, I think that's somewhat unique in that they all obviously are related to each other and sort of depend on each other. So we'll be talking about how the technical, how the business side connects to that technical side here. So feel free to reach out to me if you have any questions afterwards or after the talk I'll be over in the happiness bar. Also please interrupt me during this talk. I don't want this to just be a boring lecture. So don't wait till the end to ask your questions. Ask them when you're thinking of them, when it's relevant, when it's the right time so that we can make this a little more conversational and a little more interactive. So please blur it out or raise your hand, whatever. If you want to add a comment or you have something that would go well with something that I've said or if I say something wrong that you want to correct, please do that as well. So this talk really is for anyone on this list. Who here identifies with one of the labels on this list here? Okay, so you're probably in the right place then because this talk is for you. Yeah, this talk is really aimed at any service-based business where the service is highly unique and high value. In other words, it's not aimed at services that are sort of cookie cutter or sort of generic by nature. So what we're gonna talk about today is first of all, why pricing matters and why it's something that you should analyze and review regularly. But also look at some of the biggest challenges or problems that people face when it comes to pricing their services because it is, there's no, it isn't in art. I mean, it is sort of like you pull things out of your ass sometimes. I mean, sometimes it really is, you just don't know because the thing is this is a market where we're all selling in a market where pricing is not transparent. It's very opaque and it varies so much because it all varies on what the scope is and the quality and the value that you're providing. So it's really hard to, you know, you can't just do market-based pricing like you can in other areas of the economy. So we'll be talking about the challenges and problems but also sort of the goals that we're trying to achieve. Obviously making more money, working less, working on higher quality projects that we enjoy, working with clients that are less of a pain to work with and are more appreciative of the value that you bring to the table. And so we'll be looking at some of the most common, not all of them, but some of the pricing models that are available to you for different scenarios. But really this talk ties into a greater conversation about how you're positioning and selling yourself. And so this, although this is gonna be focused on the pricing aspect, it all plays back into how you're marketing yourself and your branding and the way that you are positioning yourself in the market and the types of clients you're attracting and you may not be attracting the clients that you actually want. So that's something that we're gonna talk a little bit about. So I probably don't need to go through this list but pricing obviously matters because it directly affects your business and your profitability as well as your time and your work-life balance. It basically touches everything. So having the wrong type of pricing may attract the wrong types of clients and that may cause a lot of pain working with clients you don't like or projects that are boring or uninteresting or clients you don't appreciate you, things like that. So just the pricing in and of itself can attract a different type of client. And if you're trying to move up market and make more money as you're growing, you'll want to start to shift how you're targeting your positioning and your pricing to attract the clients that you do want. So obviously it is I think important and there are lots of challenges that come with that. The title of the talk is about don't be a commodity and that's unfortunately a lot of people just in the services industry, whether designers, developers, copywriters, marketers, salespeople, anyone who's selling their time, there's a tendency for people to compare apples to oranges. So one of the items on here is that in the next slide is that when people are, if you're using an hourly rate and I'll get to a rant in a second here about why I hate that hourly rates, but if you're trying to differentiate yourself and attract new clients and interesting clients, you don't want to be generic or boring obviously. And so how you price your services does affect the way that you're perceived by potential clients and commoditization is what you want to avoid obviously, because then you're just one of the millions. I mean, we're in a pretty saturated market in a way, but it's actually not as difficult as it might seem to differentiate yourself and really focus on a niche and be really good at one thing. So we'll talk about these challenges and how different approaches of tackling them. And obviously the end goals here are, again, pretty obvious, but difficult to attain. That is making more money, working less, again, delivering more value to the client and therefore making more because the return on investment the client is perceiving is greater and greater. So we'll definitely go over this. And to me, and this will vary, this is subjective, but to me, I think one of the ultimate goals as far as business or pricing is concerned is to eventually possibly achieve a healthy amount of passive recurring income, because I mean, as much as I love working on projects and I do, and I wouldn't want to stop doing that, one of the, I think a lot of people would, wouldn't mind having a little bit of passive income from services or subscription-based products that they have. So we'll be going over a couple of these, all of these pricing models and strategies here. These aren't all of them. These are just some of the basic models that help you start thinking about how you're approaching pricing for your business and for your services. The most simple, we'll be going over the hourly or daily, weekly, monthly rates, any type of rate or model where it's your exchanging time for money and it's that direct relationship. We'll be going over fixed scope, fixed price projects, as well as productized services. So sort of turning your services into products that are sort of pre-packaged, where you have a predefined scope and it's sort of something that you're selling, it's sort of more cookie cutter, but it's still, it's not an actual product so you don't have to put a lot of effort into building a product in that way. We'll go over recurring income from retainers and subscription models, as well as some of the more difficult to define and more difficult to attain models like value-based pricing, which is sort of one of the holy grails is that you somehow have a way of directly connecting value to the client to the price that you're charging, as well as things that are a little more involved as far as commitment is concerned in terms of commissions or profit sharing or even equity partnership ownership in a business. So who here charges or currently charges by the hour or maybe by the day or something like that, where it's the time, money relationship? Okay, and what are some reasons that people do that? Just shout them out. Work in progress? Work in progress? Some of the clients doesn't know what they want so if they keep going over, you know, if you want something else, then at least that it grows instead of just having a face, you know, perception. Absolutely. Right, it's much, it actually is very, it protects you as a freelancer or an agency because it puts the risk on the client because, you know, whatever they're requesting, they're being billed for every hour. And so, you know, it's low risk for the person doing the work, it's high risk for the client. But it is, I don't need to define what it is here, but so, I mean, I think the hourly rate or any kind of model where it's time for money, it's very simple, it's easy to understand, it's very common. A lot of people use it, but there are a lot of disadvantages to it. One on here that, one pro that I didn't mention is that it is lower risk for the provider. Maybe in the short term, but in the long term, I think that there's some opportunity that you might be missing out on by using this kind of model. So, as I said before, having an hourly rate encourages people who are shopping around to compare numbers to numbers when it's not a fair comparison. So, that's really, this is one way where you're sort of, you're putting yourself in a position where you're sort of commoditizing yourself or you're encouraging that kind of comparison. So, that's definitely something you don't wanna do because it makes it harder for you to compete and harder for you to differentiate yourself. As I said before, it's also higher risk for the client. So, it's not particularly good for the client either because they're not quite sure how many hours it really will take and as probably a lot of you know, estimating time is so difficult. Especially when you're working on a project, if you've done something before that's pretty similar and you've done it a lot of times before, yeah, you can get pretty good at estimating hours or estimating time. But if in this kind of highly unique, high-value-based industry, it's really hard to estimate time. And that's frankly probably been one of my biggest challenges is trying to figure that out. But it does, it's not beneficial to the client in that way. If you're working by the hour, it de-incentivizes laziness and inefficiency, which is sort of the opposite of really what a pricing model should do. It should incentivize you work faster, you work more efficiently, you make more money in less time, right? That should be sort of the incentive structure that's being used, but the hourly rate sort of contradicts that and encourages slowness essentially in completing something or inefficiency. So another thing is, and this is bad for both parties, is that time has a very loose correlation generally with the value or the results of the project. Generally speaking, the more time you put into something, the better it becomes, right? But it's a very fuzzy relationship and it's not, time is really not always the best indicator of how valuable a client or an end result is to the client. So that poor correlation makes it difficult for clients, including clients, to really assess the cost benefit analysis. And it also, for the person who's providing the services, it severely limits your potential revenue or profitability because everything goes back to the amount of hours in a day. And you can't, you have a fixed number of hours, yeah. I have a good analogy for that. When I'm with clients, I describe an orange and you can, someone can paint an orange and they can take an hour for it and you build for that hour. But then you get a, we have an employee that is not happy with spending an hour, he wants to spend four hours painting the orange because he's made a better looking orange and the client was happy with the first orange but now we've got a bill for the four hours of the orange. It's still an orange at the end of it. And when you explain that back to your customer, then they understand why they're making a choice of time. That's the way I handle it when that question comes up. Yeah, absolutely. No, that's great. And I'm happy to, by the way, if you wanna share, yeah, I'm sorry, I made a, I wanted to move up, I wanted to speak earlier. I was just gonna say that I use it hourly sometimes as like an incentive for them to stop bothering me because I have a typical client that they have two, I set up two nomination sites for them. When people come and they nominate, so they have outsiders come and they register and they do all these things. And then the person says, oh, I can't, they didn't get in and they just call me and say, well, they couldn't get in. Well, I didn't tell them to check the spam folder or they can tell them to check the spam folder. And if they ask me to do it, I charge them by the hour because I don't want to contact their customer and say, check the spam folder. Yeah. So I kind of use it to say, okay, I'll do it for you, but you can really do it yourself. Right, yeah, we have difficult clients and sometimes you need to put incentives in places so that they do things that are more beneficial for you. So yeah, I mean, a lot of the cases, if you have a client who doesn't really know what they want and they really need to spend more time themselves to put time into discovering what they actually need for their own business, if you're trying to encourage that, using the hourly rate is good because it incentivize you're not wasting your time or your money while they're trying to figure out their own stuff before they even contact you. So I mean, there's a huge discovery process that the hourly rate just totally skips over the discovery process unless you charge for a discovery process, which is something that I would love to talk about too. So I think the cons of hourly pricing are relatively obvious, but it is such a widely used and common and simple. It is so simple and easy to go with that. You can jump right into a project, you can just hit the ground running and just start billing. And I'm not gonna say that there aren't cases where you might do that, but I think in a lot of cases, especially if you can define the scope, there are ways that you can make more money, hence I'm getting into the fixed price, fixed scope model here. So who currently uses a fixed model for project-based work? Okay. Yeah, this is what I use the most. And it does require a lot more work because you have to go through a discovery process and that can be time consuming, but if you have a good sense that the client is committed and is serious, that big conversation up front before you seal the deal makes a huge difference in building trust and all that. So, and they're picking the fixed price is still something I struggle with because I loosely base it off of the hourly rate I would like to achieve, but I also base it sort of on historical data. There are lots of different ways that you can approach the fixed pricing model with, you know, if you ask, you know, how often, I'll ask this question, how often do you guys ask a potential client, what is your budget? And they actually have a specific number and they know exactly what their budget is. How many? Not very often, right? And that gets back to, you know, it's such an elusive thing because nobody, you know, whereas we know, we go into the marketplace to buy a car or a house and we have a general sense of what a car or a house costs. I mean, it varies quite a bit just like websites, but it's transparent pricing and we can do more fair comparisons there. And so we have a good sense going in. You know, if you go, yeah. I have a colleague who works exclusively in the nonprofit sector who by law have to publish their budgets and incomes and all that stuff. And his pricing is set on their budgets. Yeah. If you have a million dollar budget for your nonprofit, he charges X% and it's that much. If you have 10,000, it's the same percent. You know, there's maybe a thousand dollar, you know, one time a year or something, but it's very transparent and very easy. He doesn't have to have those budget valuations at all. Yeah, no, I love that. I mean, I've had several nonprofit clients and it's always, the conversation about pricing is always quite a bit easier because they have fixed grants. They have a budget set out. They know what they have. They're not trying to maximize profit because they're nonprofit, but yeah. So that is the case where it's kind of nice when you have a nonprofit because they have a much better sense. If you're talking to somebody that gives you a budget figure, chances are you're not talking to a decision maker. That budget figure was probably set by somebody else. In order to get above that, they're gonna have to go up in their organization, which they might not be willing to take the risk to do. They just want to look good to get whatever they can within that budget figure or less. So kind of make sure you're talking to the right people if you want to start off with the ante. Yeah, that's a great point that you want to make sure that when you're having this conversation that you're having with the right people who have the ability to actually make decisions, important decisions, it's great when you have a small business and you can speak directly to the owner or a shareholder within a larger company. When you actually can talk to those people, then it's much easier than going up the ladder. And so yeah, that's a fantastic point. So I won't really go into detail about all the different ways that you can approach fixed pricing. That could be its own talk and it's really hard. I just, there are lots of different ways you can look at it. But due to the interest of time, I want to dig into the pros and cons of this. So with the project-based pricing, there's a lot more upfront work and commitment because you have to establish a relationship, you have to figure out what are the goals, what's the scope, what are the deliverables, all that stuff. And I think for smaller projects, I think it can make sense to do that discovery process as a complimentary service, as a free service. But for as a project, it's bigger and bigger and bigger. It's riskier and riskier to start the discovery process without maybe having a contract in place or billing for a discovery process, which I think can be extremely helpful. I haven't done it personally myself, but I really would like to. Has anyone done that build for the discovery process and what experiences? Super duper good. So basically the free discovery part is, do I need to charge them for discovery? Just kind of give you an idea of what they have in mind. And if it's some grand, all-encompassing, oh my God. And you say, okay, that's what we discovered in this first three hour or two hours. Now we're going to do a discovery. It was good. They gave them a budget for a warm cost for that discovery, what would we do? But that actually set the total for the entire project. Very big project. But the cost of discovery was more than lots of small upside projects I've done in the past. Just discovery. But that set the whole total. Now we know he has a very good expectation what he's getting, what he should expect, pay, et cetera, et cetera. Super, super duper good. Absolutely. And it's portable. If they decide not to go with you, they still have something that is of true value. They have something that they can hold that they can take elsewhere and they know exactly what they need. Hold them on that. We said, take this, shop it around and compare our price with the same project. And when they come back to us, I don't know what he did with it, but that was part of the selling process of the discovery phase. Yes. You're gonna get a deliverable that you can shop around. Really? Yeah. I'd have to start putting that more into practice. That happened to us, because the second time around, we had the decision maker there and you could give him those choices and you also had the opportunity to upsell. So if you want better product photography, if you want video, now the decision maker's there and he's like, no, we're going this route because we're going to do it right this time instead of doing it wrong back in time before. So definitely you can get a second discovery with the decision maker. It makes your life so easy. Absolutely. Yeah. So much of this is subtle nuance with all the conversations you're having with the prospect. The first discovery meeting is like a half hour or an hour? It was an hour. Okay. I'd say that's about right. I mean, a certain amount of that stuff, if you have an interest in helping clients and building sites, you're just interested, you know, and you've got to get in and I don't usually turn my timers off but I kind of stuff like, it just depends. Especially if you think it's a big fish, you might invest more time than you would for a smaller. Right. Also have everyone who's going to be involved in the project in those two discoveries. If it's web work, we've always had the designer, the developer, the project manager, the accounts person, the sales person and have everybody in there. So everyone's going on the same page before and everyone's getting introduced to upselling and all your account managers there and those about the upselling and those about changes. So, and as the project gets further along, start weeding out people that don't need to be in those meetings. Yeah. So present your whole team. Yeah. We had a similar experience. They wanted to, they flew us out. It was a finance, it was based in New York. They have a 40 employees and some of them were kind of, we kind of came in essentially now after six months or more, like I was like consultants and people were like, we're also like consultants but getting to know those people, having everyone there helped us smooth over so people who were a little, not so happy that outsiders were coming in and maybe threatened a little about what they'd be doing later after we helped and stuff. So having that meeting was important for that also. We'd call them up and say, hey, let's talk about this so they feel comfortable and move on. Absolutely, yeah. Next year I should totally just do a talk just on discovery, project discovery. I think that is one of the biggest things that I've made where I've made mistakes because I'm eager to get started on the project and there's so many details and oh, I don't want to get bogged down with all these details and really defining the scope of the project because that can be, I mean I don't, I don't particularly like putting together proposals especially when there's no guarantee that there's gonna be business that results from that but yeah, I think, yeah, the whole discovery thing is, maybe I should have just made this talk about discovery but no, but with the project-based scope, fixed price, obviously it's much lower risk for the client because the client knows exactly what they're getting. Well, it depends on how well the scope is defined. If it's a loose scope, then there's risk involved but again, you can't always define the project. The scope will always change no matter what so you always have to have a certain level of buffer and flexibility in the end net scope but generally speaking, it's lower risk for the client. It is higher risk probably for the provider because depending on how well they have scoped it out and how well they can estimate their own time and expenses for that. So it is higher risk for the provider but there's a lot more opportunity to make more at the same time. So there's again, higher risk, higher reward and then for the client it's lower risk but relatively high reward, right? So I think it's a pretty good model but it does have some cons, right? It has again, less flexibility. If you need to be really fluid or adaptive, one thing you can do is just split it up into smaller sections and do it in smaller phases. Put it in micro projects if you will, right? And then you just work on one thing at a time. So that's one thing that you can do. And you can always build on extra add-ons or things that are beyond the project scope you could do with hourly or you could build that as a separate project, right? So there are solutions to that and of course it takes more upfront commitment but hey, if you're charging for it then that's totally, totally worth it especially if you're building trust with the client and then they'll probably go with you anyway even if they're shopping around. So moving on to the next model here, productized services and I think this is super interesting and I've started to do a little bit of this but basically it's the idea that you're basically selling products but it's actually just a bundled, you're bundling your services into some kind of package and maybe you're offering your clients various options and the scope is fixed. It's not custom per client. It's you're selling something and if that's what the client wants, that's great. If it's not too bad there isn't usually much flexibility there. So actually, has anyone done this where they've basically sold services as if they were products in a way? Anyone wanna share their experiences with that? My situation was a full branding for a company that also included a website and various print packages but that's this, I'm more than just a web designer so but it totally worked for the client that they're ridiculously happy and I pocketed a lot of money so. Yeah, this is probably one of the most scalable thing models that you can use because you're basically creating something that's somewhat cookie cutter or templated. I'll get on to the next slide here. So yeah, so basically there's a lot of work to do upfront because you have to do market research and you figure out what the right offering to have and then targeting your audience making sure that they're in alignment and all that stuff but I think if you're really looking to grow your business this is one of the things that you'll definitely wanna get to at a certain point, I haven't, I've started to do it in the early stages but I think this is a fantastic model for scaling up eventually, yeah. Is this related to selling SEO services on a monthly basis? So yeah, there's crossover so we're gonna be talking about retainer and subscription based models which often are paired up with productized services so you have a productized service that you pay on a monthly basis or whatnot. So yeah, you can combine these models in a lot of cases, you can create hybrid versions of them. So obviously there are pros and cons obviously and one of the things is because the scope is predefined before you even start having the conversation with the client, you'll still have to have conversations to make sure everyone's on the same page as far as expectations are concerned but generally speaking when the scope is predefined it encourages, it basically puts the provider and the client more in alignment as far as their expectations are concerned for value and results so that's super helpful. I think every project that I've had that has gone wrong it's been because communication was not good enough and or expectations were not in alignment so the constant communication obviously helps with keeping them in alignment but right off the bat you have pretty good alignment as far as expectations are concerned. In addition, because it's kind of cookie cutter and it's sort of fixed, it's set, it protects against scope creep. I should have mentioned I could do a whole talk on scope creep too but I'm sure everyone in here has experienced that where it's like, oh, can we do this? And you're like, well, can we? Is it possible? Yes, it's not in the project or maybe the scope is not, my scope of work is usually not so detailed that you, there's usually, there's gray area as far as is this in the scope, is it not? And so that's always hard but that comes back to the discovery phase. But it protects against scope creep and things are well-defined, which is always nice but again, it's more cookie cutter, it's more fixed, it's not going to be as, you'll attract a certain amount, a type of client but you won't be able to, you'll have to turn, more people will be, it won't necessarily be a good fit for everyone or for many people so there are disadvantages to that as well and it may not be the ideal solution if it's not custom tailored for that client. So who in here charges, has any services where they're billing on a monthly or maybe weekly or quarterly basis? And are they retainers or are they more subscription based? I guess that's kind of arbitrary, I mean there's sort of crossover there but anyone want to share their experiences with sort of moving to that recurring revenue model? I found that it keeps clients much happier just in terms of keeping that constant communication going. I had a university client where we had just a set budget of like 20 hours a month in addition to like once a year big projects and by keeping that flow of communication of small fixes or big change around the site then we kept them happier and we ensured that we were going to get that next project and the clients where we didn't have that but we didn't have a regular check-in moment we were much more likely to lose them the next time they had a big project. Right, I think it's super beneficial for clients in the long run because most campaigns, digital marketing campaigns it's not just you do it and then it's done it's an ongoing thing and you have to keep putting in time and effort into constantly iterating and evolving the product or the solution that you've built and so you're much more likely to be successful if it's an ongoing long-term relationship and constant improvement. So again, this is sort of there are lots of different ways of doing this but retainer agreements or service level agreements are quite common and of course it gets back to that what's nice for any small business or freelancer is that consistent cash flow which is one of the major pros is that if you can build up enough recurring revenue that makes that cash flow roller coaster much smoother and more predictable and it's really nice you know I would give up a certain amount of income just to have more steady income, right? And, yeah. Is there a market for Google and the report? Absolutely, yeah. Will other people do that? I don't know if I'm the best qualified person to answer that but I mean there are all sorts of analytics and reporting for different KPIs like that but yeah, I'm sorry, I'm not... Yeah, we have like five to six clients that pay us to produce a monthly or quarterly analytics report for them and include them through social media they do email marketing we put that in the report for them so it just depends on the client but we've got quite a few that have been interested otherwise they don't go for themselves so... I think oftentimes you will have a regular report or some kind of analysis maybe it's a phone call, a scheduled phone call or something where you're updating them on the current progress or status of things whether it's SEO or I don't know AB, iterative AB testing, things like that but we spend a lot of our time chasing after one-off client projects or maybe they turn into a couple of projects here and there but I think I'm probably not alone in wanting to do less chasing after projects and have more long-term ongoing fulfilling projects and clients like that so this is something that encourages that however it's difficult too because especially if it's a lot of money that's recurring you have to constantly prove your worth and your value to the client it's not something where you can just become complacent you have to consistently provide value and show that it has a positive return and sometimes it's hard to find things to do especially if you're waiting on the client for something and you're trying to help their business it's hard to consistently deliver that level of value and if it starts to go down they may reconsider and I typically don't encourage like commitments of like a year but sometimes that's really helpful because especially with SEO or things that are just by their nature longer term you need a certain level of commitment for it to have a good chance of working but and it's more hard to sell to a client because it is an ongoing expense that they're gonna see every month any other notes to add to that? I've worked out a quarterly way of doing this because I have one client that first quarter and fourth quarter they're almost not existed but second and third they're full tilt so the quarterly thing worked for that particular client and it actually works really well for me Cool, yeah that's fantastic yeah I mean I'll have ups and downs where a month goes by and they're not really communicating with me and I'm like well I wanna provide services because I don't wanna lose you as a client but if there's nothing that they really need for me at the moment it's hard and we did all the planning in the first quarter for the second and third Great, that's fantastic It holds that accountable Sure, that's fantastic We're a marketing agency so we kind of want that retainer model but the thing that we find is it brings us a lot more responsibility to ourselves you have to have a lot better understanding of your client because you're gonna be touching base with them more so now you need to understand that business more to make the right decisions for them Exactly, yeah When I'm on a retainer I'm having to constantly think of things that the client hasn't thought of because I'm having to seek out additional opportunities that are not on their radar to prove that that's sort of the additional value that you're adding is that you not only are doing what they're asking you to do but you're thinking of things and doing things that they're not even asking or not even thinking about and that's I think where you're really truly providing that incredible value to the client when you're really more of a consultant or you're part of the business you're really almost it's like you have ownership in that, in that business I love you more but you have to have less of that Yeah, it's and then right and you want to say diversified too if you don't want to be basically working for you know have one giant retainer and that's you know 90% of your business so this is a more difficult but more ideal or utopian model I guess is the idea of value-based pricing where you have some kind of anchoring for the ROI or you're able to measure performance anyone used models like this where they're measuring or they're calculating the cost based on the or you're billing by the actual performance or results that the clients are getting Okay, yeah it's I propose to build out a affiliate page for somebody and get a percentage of revenue for that Right, yeah commissions I mean yeah sales commissions or yeah those kinds of arrangements are great because you only get you only pay when you get referral or you know so yeah that's a good way of doing it but yeah this is something again that's just kind of elusive but I've been reading more about and it's definitely something as sort of an ideal to work towards did you have, yeah Yeah, yeah right we'll get into equity in just a second I mean believe me I've been I've gotten in trouble there too but yeah, so this is a hard one to measure you know there's some it depends on the client to the industry sometimes there are ways that you can easily you know sales is one area where it's pretty easy to define you know what sales performance is just based on the amount of sales that are made in the revenue there but that's about the only cut and dry area where you can directly associate the cost with the performance at least that I'm aware of and again I won't claim to be an expert on this particular model but it's something that I'd like to strive for but obviously there are pros and cons you know it's great for the client if the client can somehow agree to this sort of thing because the client knows they're only paying for actual results that matter to them which is ideal for the client but it's really hard to define and to achieve its higher risk for the provider because unless they really know what they're doing and they're confident and competent enough to deliver on their promises but ultimately you know it perfectly aligns the incentives of both parties and so it's again it's harder to really put your finger on it but it's something that sort of as you're pricing on any project to again correlate that the price with the actual value expected value so then we'll get into more higher commitment models where it's either percentage based on a commission or profits sales through e-commerce site for example or actual ownership or equity in a company anyone have experiences with that that they'd wanna share or briefly summarize so and these are kind of they can be the same thing because if you have ownership you get a percentage of the profits but you don't necessarily you know you could get a percentage of the profits for example I had a client who I offered to basically they were a legitimate company and they offered or they wanted me to build their e-commerce site for free in exchange for a fixed amount commission on every purchase on every sale and at the time it seemed like a great idea and it could have been you know maybe it could have been a great thing but you know it incentivizes me to make a really good e-commerce site do really good at marketing and sales and actually get those sales in the door to actually make up for the time that I put in but again these are these are higher risk higher potential higher return models here and this gets more into startups and more you know business risk evaluation things like that but You take the job and when are you retiring? I took the job the thing is it was a it was eventually abandoned two years later because the business simply was not ready to go to have an e-commerce site because they had tens of thousands of products and they couldn't decide you know they were doing so many sales through other means that you know it wasn't worth it to the owner to follow through on the e-commerce site which is a shame because they're in the technology industry which is kind of interesting but you know if you evaluate the company and they seem like you know they're making solid sales you know this company was making at the beginning at least 300,000 in annual sales and even if I could have gotten a piece of that that would have been great and they were growing but again you have to do a lot of analysis and risk assessment here but it does require a huge commitment and a really really strong relationship where you have a lot of trust where you really know the other person or other party company to come up with an arrangement like this and it is you know there's a lot of negotiation and all that stuff so this is probably not gonna be very commonly used but it is something to consider. I wanted to leave enough time so that there can be more of a discussion but there's some great resources out there for these kinds of conversations about positioning, pricing, your strategy as far as discovery and all that stuff. Some of my favorite are, I love Brennan Dunn of Double Your Freelancing listening to like every podcast he's ever recorded really really great guests and he's been an inspiration to me as well as Mike Dermott the first one on there he's the CEO of FreshBooks if you use the invoicing software FreshBooks he wrote a great free e-book called Breaking the Time Barrier which is a great e-book to read to sort of start changing the way that you think about pricing, your services. Consulting success is great too. Again that's, a lot of these are not specific to the web you know our WordPress area but apply our great application so anyone else have recommended resources that you wanna share for this kind of, this sort of topic, okay. So now I just wanna open up the discussion here. Questions, I should have probably provided more examples from my own business but if you have examples to share, experiences to share I think those are always helpful the case studies, yep. There it is. Yep. Did you take into consideration affiliate income? So if you wanna get into that I haven't done much of that, I've done a little. What's that? Oh thank you, see I didn't even follow my own rule here. The question was do you take into consideration affiliate income? I think affiliate income can be a great revenue source. It depends on again on your audience and on your market and on your website of course and what you're promoting but affiliate income, the expert on that really is Pat Flynn of Smart Passive Income. He's basically built on, I think he's now making easily $100,000 a month from affiliate income not average case, very much probably one of the best in the world as far as affiliate income is concerned but that can be something that's great for if you put enough time and energy into that that can be passive recurring income which again is kind of a holy grail. So yeah, I think that's definitely something to consider. Hardly for the same question but how do you take into account hosting? So as far as in what context? Reseller hosting. Yeah, I do reseller hosting. I manage hosting for 30 or so clients. That's a great passive, relatively passive income source depending on how good you are as a server admin or as just tech support. So yeah, I make some decent money from hosting. That's definitely something that is relatively hands off easy to set up a reseller hosting plan and then sort of sell that. I know I'm getting close on my time here but that's definitely something to consider. A lot of what we're talking about here is when you're starting off a project picking what sort of pricing model you want to go with but have you ever had a situation where you actually switched pricing models? Like I had one client where I did a number of hours of hourly work and then later on said hey actually I think we should switch to a fixed price model for the future and that would be okay for a while. Eventually they fell off and I kind of wonder if the switch in the model might have affected that. Yeah, a lot of the time the scope starts out very fuzzy and it's very blurry and so at that point it's hard to really, it's hard to put a fixed price on it so hourly is a great way to maybe start something and then as the scope becomes more and more into focus and becomes clearer what the requirements actually are and what the goals actually are then the fixed pricing model starts to make more and more sense. So yeah, it totally makes, or I guess it could work the other way if somehow the scope all of a sudden lost focus and you didn't really know what you were doing you might go to the hourly rate but there are other problems that you might wanna address first if that's happening. But yeah, depending on how well the scope is defined and the risk tolerances of both parties if that changes then that may incentivize a different model. Any other questions I think I'm up here but well, thank you for coming to this. I hope this was helpful. Check these out, these are all links and let's continue the conversation if anyone wants to.