January 10, 2020

How do you charge more?

There is famous advice that flies around about charging more. How can indie hackers go about it?

Some ideas:

  • Aligning with the customer and helping them grown.
  • For freelancers and consultants: don’t lower your hourly price, give discounts.
  • Upsell
  • Test pricing
  • Compete on something more than just the service.
  • Have a stable income so that the stress of money isn't so great
  • Price your service based on the value the customer receives, and not strictly the number of hours you spent to deliver.
  • Read You Can Probably Stand To Charge More by @patio11

(Bullet list inspired by a Twitter post)

What other suggestions do you have for charging more?

  1. 3

    Create a monopoly, even a small one.

    This is a broader idea than it might seem. Rather than molopozing a segment of the market as a whole you can create and own a smaller market within which you own one or more monopolies:

    • If you make a free to play game, you have an absolute monopoly on the virtual goods within it.

    • If you build yourself into a personal brand or influencer you have a monopoly.

    • If you build a software platform or plugin ecosystem, you and only you can create its official store.

    • If your offering is sufficiently weird as to be unique, then you have a monopoly... at least for a while.

    • Even as a contractor, your supply of hours is finite. If you build demand specifically for you, your pricing power is considerable.

    1. 2

      Very good points. From a software point of view, I always considered ecosystems to be easy money once you have the main product, you can even give your main product for free and monetize the ecosystem (eg. a free very good CMS editor, but the plugins cost money, WordPress?)

  2. 3

    For consultants - just increase your prices and test people's comfort level. I know it sounds very crude but that's exactly what I did last year. You quickly find out how much is too much and when the selling is an uphill battle and not worth it. If you go through enough calls, you get an idea of exactly how much people are willing to pay. I can talk to a person and within 30 seconds know exactly what kind of client they will be and what their limits might be. It's not always accurate, in fact, I've been dead wrong many times, but for the most part you will start getting comfortable at reading people.

    I've tested so many things as a consultant and these days have 2 pricing tiers. One for bargain-seeking clients (I don't turn them down, just offer lower scope) and one for people who don't mind the prices (as long as they are not astronomically outrageous) and want to focus on thoroughness and the final result. I adjust the scope of work depending on what I perceive the budget to be.

    There are so many gurus who say charge for value -- and for the most part it's true and sounds good on paper, but once you get into figuring out exactly how much value you provide, you'll run into an uphill battle at times where people won't understand the value you deliver. Of course, that could be my shortcoming and perhaps other consultants don't have these issues. Maybe I'm just an idiot who doesn't know what he's doing ;)

    For products, charge for a metric that scales with increased usage and has "infinite" scaling possibility. See Transistor and Chargebee for examples.

  3. 2

    There is always someone that will pay more for the same value you need to fin them. I found this out.

  4. 1

    As for me, I always would prefer not to charge more but to make more money. Feel the difference?

    And it's not too hard, you just need:

    • to find more customers

    • to lower expenses.

    1. 1

      Great point.

      Have you done this? Or know someone else who has? It would be great to hear and highlight practical stories.

  5. 1

    The Win Without Pitching Manifesto by Blair Enns goes into this topic as well. Anyone with Audible should take a listen.

  6. 1

    Basically show that going with your product/service will generate a positive ROI for the user (if possible).

    If your product saves users 10hrs/month on average and you're charging $50/month, you know you can raise your prices if you can make your users realize that their time is worth more than $5/hr.

  7. 1
    • Dynamic pricing is definitely an option. For example, $5 for "x" benefits and then charge overage at "x" price on-top of the amount.