Wk18 (25.6k subs): $50/mo to $10,000/mo contracts

How to raise your prices by answering 1 simple question:

AuthorAuthor

Nigel Thomas & Daniel Bell
April 30, 2024

Wk18 (25.6k subs): $50/mo to $10,000/mo contracts

The Comeback - Week 18 (25,600 Subs):

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I still remember it like it was yesterday.

My first ever client - on a freelance platform called Upwork.

I charged them $50 a month for setting up a simple ad account strategy on Facebook.

Let’s be honest: I had no idea what I was doing.

That was 6 years ago.

Fast forward to today last year I was charging clients at my agency $10,000 minimum a month and now with my consulting I charge up to $12,000 a month.

But this did not happen by accident.

It happened by design.

I spent countless hours jumping on calls with sales experts, big marketing agencies and hiring mentors to figure it out.

You see in business there are 2 main ways to make more with what you currently have.

1) Decrease your costs

2) Increase your prices

And the latter has way more upside.

In a world where everyone is copying their competitors and struggling to increase margins with ever-rising costs today I’m going to show you how to increase your pieces by answering one simple question.

If you figure this out you’ll have a huge competitive advantage and be able to have more cash to hire better talent and grow your company faster.

But before we get to that let me first tell you about what’s been happening behind the scenes these past few days.

Because damn, it’s been one hell of a ride!

Road to 100,000: Behind the Scenes

Challenges - The Rollercoaster Week

Let me start by saying, wow! What a rollercoaster ride life can be.

In case any of you hadn’t noticed, I had a benign tumour growing right underneath my eye.

After countless consultations, it seemed almost impossible to get this lump removed from my face.

My mother did however manage to find a top level surgeon who said he could do it, but the waiting list seemed to stretch on indefinitely.

But fortune favors the bold, and a sudden cancellation last Wednesday meant my surgery could be brought forward to Friday.

I knew it would be stupid to refuse this opportunity. But of course, it had to happen at a time where my workload is mounting. My mentoring is just starting to take shape and I’m burning the midnight oil.

Bittersweet, I’d call it. A mixed blessing, which set off a cascade of challenges.

Before I knew it, I found myself on the operating table, surrendering to the hands of fate, and in the blink of an eye I woke up. Battered and bruised, with the doctors telling me to give myself a full week to recover with minimal screen time.

The road to recovery, they say, is never easy. And with my life intricately intertwined with the screen, this was daunting to say the least.

Fast forward 24 hours to Saturday morning, I woke up looking as if I’d gone 12 rounds with Mike Tyson.

Staring through swollen eyes at a screen I could barely see, the irony cut deep – The very tool that connects me to the world, to my work, to my life, was now a barrier to my recovery.

Anyway, Dan and I had a short walk on Saturday morning – I thought I may as well take advantage of the short time off, a fleeting moment of tranquillity.

It’s great in many ways to have mornings like this every now and then, visualising the next few months, letting our minds wander.

But I returned to a different story. A situation that sent me into a world of panic.

As I logged back onto my laptop my LinkedIn account had vanished without warning.

LinkedIn is one of the main funnels into David to Goliath.

I have spent 2 years building this profile every single day.

It brought my last agency over $600k in new revenue last year.

It was a terrifying 24 hours, bearing in mind that I still could barely see a thing.

Two years of dedication, countless connections, hanging by a thread.

Threatening to destroy the foundations I had built in an instant.

And it was all compounded by the fog of exhaustion and medication.

I frantically sent messages to the LinkedIn admin team, clinging onto the immortal words of Henley: "I am the master of my fate, I am the captain of my soul."

And after a 14 hour sleep on Saturday night, I woke up to a message of restoration from the LinkedIn gods. They’d reactivated my account.

THANK F*CK FOR THAT.

Quick sigh of relief.

Onto the next surprise…

Breakthroughs - The Handwritten Message from Beehiiv’s CEO

Amidst this haze of uncertainty, I received a handwritten note in the post from the CEO of Beehiiv, Tyler Denk, saying the following:

Our work is being recognised, and it’s an amazing revelation for us.

Just 4 months ago, Dan and I were sat in a WeWork office on Boxing Day, piecing all of our thoughts together, discussing the many avenues we could take to bring 100,000 subscribers to the David to Goliath newsletter.

And now as we sit in the same spot on the last day of April, 25,000 souls march alongside us. A testament to what’s possible.

We have a brand new SEO strategy emerging, many great podcasts on the horizon, and the ICP becoming clearer by the day.

This was a moment of clarity. A sign that we’re heading in the right direction.

And casting my mind back to the bleak mid-winter, I couldn’t have imagined any of this.

The note reminded me of the journey that brought us here – the late nights, the moments of doubt, the relentless commitment.

The hours spent poring over data, searching for that elusive insight that would set us apart.

In those moments, it wasn't just about building a successful newsletter. It was about something far greater – it was about proving that with dedication and perseverance, anything is possible.

Now as the warmth of spring fills the air, we’re embarking on a new chapter and doors are opening.

So here’s to the late nights and the early mornings, the moments of doubt and the flashes of inspiration.

Here's to Beehiiv, and to the incredible journey that brought us to this moment.

And here's to the countless milestones yet to come.

To my fellow entrepreneurs, I salute you.

Now, let’s talk pricing.

Main Topic: How to 3X Your Prices By Answering One Simple Question

2 weeks ago I had a conversation with one of our community members that shed light on a common misconception in the agency world.

He was telling me how he wanted to double the size of his agency by the end of 2024 and he thought the way to do it was by getting twice as many leads.

It's a narrative many of us are familiar with.

However, what if I told you that there's a more effective way to grow your agency's revenue without exhausting yourself chasing after more leads?

Naturally, his first instinct was to ramp up lead generation efforts. But as we delved deeper into his business model, it became apparent there was something else holding him back.

So I started asking him questions.

Me: “So right now you’re charging around $1,000 a month but how much revenue are you making your clients?”

Him: “Hmm, I’m not sure to be honest but it’s quite a lot”

Me: “Right, let’s figure that out first then before we talk about finding new clients”

It turns out that for one of his clients he made them over $1,000,000 in extra revenue in 6 months by running their Google ads.

So I proceeded to ask:

“Do you think that if you charged let’s say $5,000 a month this would still be a great return on investment for your client?”

Him: “Yes, come to think of it that makes a lot of sense. I never thought about it like that before”.

Me: “So how did you come to charge $1,000 a month?”

Him: “Well that’s what everyone else was doing and I didn’t want to price myself out of the market”

And this is certainly not the first time I’ve heard a story like this.

This is how I used to price my services.

Aligning with industry standards to avoid pricing myself out of the market.

But it’s a terrible strategy.

By anchoring your prices to market norms, you’re leaving substantial revenue untapped.

So what is the pricing strategy?

How do you 3X your prices but still have happy clients that stay with you for years?

You audit the current set up of the business you’re speaking with, and you show how you will do XYZ to increase their revenue.

Then you price on the value you deliver.

The quickest and easiest way is to answer one simple question:

How much extra revenue do you bring your clients over an extended timeframe?

This question serves as the cornerstone for a pricing strategy centered on value delivery. Instead of merely following the crowd, quantify the impact you have on your clients' bottom line.

This involves quantifying the revenue generated or costs saved as a result of your services.

And herein lies the problem.

Most companies don’t track these numbers and thus they just copy what their competitors are charging instead.

But it goes deeper.

As well as being able to charge more if you figure out how much revenue you’re making a company (ideally in line with their margins/lifetime value) do you know how valuable that is?

Someone in that company has to do this job anyway.

And financial forecasting is one of the highest-leverage activities in any business.

Let’s say at this point you’ve figured out how much you make your clients in a 6-month timeframe and that’s your initial contract length.

Now ask, if I doubled or tripled my prices would it still be an incredible return on investment for my client?

If the answer is no then here’s the truth: You need to improve your product or service before you can increase your prices.

If the answers yes then you need to reflect this in your sales process for new prospects so they see your service as an investment, not a cost.

By demonstrating the tangible ROI of his service, the community member I referred to at the beginning could confidently more than triple his prices while still providing exceptional value to his clients.

Ideally, you want a 5X return on their investment to work with you (3X min) - in line with their margins.

Above all else the most important thing to consider is working with the right people where this is possible.

In fact it isn't just important; it's essential.

I once worked on a project for $50, only to find myself bombarded with demands for instant profit from a business owner who seemed to think I held the secret to overnight success.

Contrast that with another project I worked on for $25,000, where communication flowed smoothly with just one email per month.

That's the difference the right partners can make—no drama, no stress, just focused collaboration leading to success.

Next Tuesday I’m going to do a huge Newsletter all about sales, how to qualify people and I’ll include how to include your new updated pricing so watch out for that!

I also appreciate that you might not have a product or service where you can directly see how much new revenue you’re generating for your clients.

Personally I’ve not worked in a business like this so I can only comment on what I know to date.

Hopefully it helps someone out there.

Mindset: You Don’t Ask You Don’t Get

Once you’ve figured out that you can increase your prices in line with the value you provide there is another huge problem.

Regardless if you’ve had hours of coaching, got the big fancy slide deck and all the best case studies in the industry you still need to ask.

This is probably the hardest part and it’s all a battle within the mind.

I still remember the first time I asked for $10,000 a month. On the outside, I looked confident because I had done a lot of preparation and knew we could give that client an incredible return on their investment.

But on the inside, I was freaking out. I felt like a fraud.

To my surprise there were zero objections, they said yes and went on to become our best ever client.

Moving forward I never charged less than $10,000 a month at that agency again and we used the extra cash to hire incredible talent and deliver even better results.

The point is that no one is going to do it for you.

Once you’ve figured out the value equation you have to step up to the plate, be bold and just ask.

Because in life and business if you don’t ask you don’t get!

So stop working for hours on end for razor thin margins when you know your service is better than all your competitors.

Figure out the value you provide, raise your prices and just start asking for more.

The sooner you conquer this battle in your mind, the sooner you can lget more cash and hire better talent.

And having a great team remember is the ultimate leverage.

Resource Rec: Dana White

This week, our resource recommendation shines a spotlight on a true force of nature: Dana White.

He mastered the art of ‘you don’t ask you don’t get’.

This man has conviction in abundance.

A legend who turned a niche, controversial sport into a global goliath.

He embodies the spirit of a modern-day gladiator, fearlessly navigating the tumultuous seas of controversy and scepticism.

Hated by some, adored by many, but never ignored.

For him, it’s not work or life. It’s both. It’s everything.

But here's the thing. Dana's story isn't just about him—it's about YOU.

It's a beacon of hope, a reminder that within each of us lies the potential for greatness.

It's about daring to dream, seizing every opportunity, and never faltering in the face of adversity.

To read about Dana’s entire backstory, explore the piece we posted last Thursday:

So raise your prices, be bold and get paid what you deserve.

Until next time - keep dreaming like a Giant.

But believe, fight and act on your dreams like a god damn Underdog.

Yours truly,

-Nigel Thomas

P.S. Whenever you're ready, there are 3 ways I can help you:

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