Episode 318 — How to Raise Your Prices
Knowing when to raise your rates is really critical. A lot of us get the resistance in the beginning. We’re afraid that if we raise our prices too high, we’ll lose our clients. But that’s kind of the idea!
A brand is our position in the market: How people perceive us and whether our clients are willing to pay higher rates. In the beginning, we’ll be taking on lower-paying clients because we’re desperate to get a job after job, after job. But to be profitable in that situation, we’ll have to take on a lot more work. The worst part about it is that cheaper clients are the ones that try to squeeze us for everything or to micromanage us.
That goal changes over time, later in our career. The difference between being a successful artist versus an unsuccessful artist is that the artists without a brand are frustrated because they aren’t getting the result they want.
In this Podcast, Allan McKay talks about stages of an artist’s career: from the initial goal when starting out — to creating a successful brand that eventually attracts better paying clients and the type of work you already enjoy doing.
[03:08] Introduction: In the Beginning of Your Career
[07:55] Start Working on Your Brand
[11:42] Put Out Your Best Work
[14:38] Attract Premium Clients
EPISODE 318 — HOW TO RAISE YOUR PRICES
Hello, everyone! This is Allan McKay.
Welcome to Episode 318! I’m doing a solo Episode on How to Raise Your Prices at different stages of your career: from starting out to the point when you build your brand and ask for the prices you deserve.
There is a lot around this topic that is so important! I talk about building an effective brand that allows you to attract great clients.
Please share this Podcast with others. That would mean the world to me!
Let’s dive in!
FIRST THINGS FIRST:
[01:12] Have you ever sent in your reel and wondered why you didn’t get the callback or what the reason was you didn’t get the job? Over the past 20 years of working for studios like ILM, Blur Studio, Ubisoft, I’ve built hundreds of teams and hired hundreds of artists — and reviewed thousands of reels! That’s why I decided to write The Ultimate Demo Reel Guide from the perspective of someone who actually does the hiring. You can get this book for free right now at www.allanmckay.com/myreel!
[33:07] One of the biggest problems we face as artists is figuring out how much we’re worth. I’ve put together a website. Check it out: www.VFXRates.com! This is a chance for you to put in your level of experience, your discipline, your location — and it will give you an accurate idea what you and everyone else in your discipline should be charging. Check it out: www.VFXRates.com!
HOW TO RAISE YOUR PRICES
[03:08] I want to get into a topic that a lot of us have resistance to: Raising our rates. We are usually too afraid to disqualify our clients by doing that. I try to make this all around profiting and money, as an artist in the VFX industry, games and design. I think it’s a taboo subject as well. I will also get into:
- How to sell assets online,
- How to create a side hustle, including NFT’s,
- How to launch your own studio.
[03:59] Knowing when to raise your rates is really critical. A lot of us get resistance in the beginning. We’re afraid that if we raise our prices too high, we’ll lose our clients. But that’s kind of the idea (and I’ll elaborate on that more)! If you’re just starting out in your career, you’re all going to be in a different pocket. At the beginning of your career, the focus is just on getting any job. And you’re going to be taking on low paying clients. And you’re going to be the one positioning your brand on the lower / cheaper level.
[05:18] A brand is your position in the market: How people perceive you and whether they’re willing to pay higher rates. In the beginning, you’ll be taking on lower paying clients because you’re desperate to get a job after job, after job. But to be profitable, you’ll have to take on a lot more work. If a client pays you $200 for a one-week turnaround, you’ll have to take on 8 clients a week. The worst part about it is that cheaper clients are the ones that try to squeeze you for everything, or to micromanage you. They often aren’t even aware of what they want. As a result, you’re also going to be spread really thin which will make the work suffer. That’s where Fiverr can be a good marketing ground because that site already has a client base, but there you’ll be competing with everyone else.
START WORKING ON YOUR BRAND
[07:55] You all know the “Fast / Good / Cheap” triangle. You can do two out of three, but never all three. In the beginning, you aren’t focusing on profit. But at the beginning, your goal must be about consistency. That goal changes over time later in your career. The difference between being a successful artist versus an unsuccessful artist is that the ones without a brand are frustrated because they aren’t getting the result they want. In the beginning, you aren’t focused on brand but that becomes part of the problem.
[09:00] The idea of a brand is not, “What is my brand going to be?” It’s about building your brand overtime. Your reputation and the quality of work you do — or at least the perception of that work — is what will attract better clients. In the beginning, you’re just trying to survive. If you picture it as a video game, in the beginning, you’re just trying to get out alive. And that’s really what you should be focusing on in the beginning: doing the work, burning yourself out but trying to put a dent in building your clientele. Ultimately, it’s about trying to build a brand around what you’re doing. In other words, you should be focusing on how to get out of this fast and cheap loop. How do you get people to pay what you’re worth?
[10:42] Your primary focus should be learning how to build relationships and customer experience. What that will ultimately mean is that you’ll get repeat business and get known through word of mouth. You can do all this through promoting good work. While you’re serving the cheap bunch:
- You should be building your social media;
- You should be putting out the content you’ve done — your best work — so it attracts the clients you want.
PUT OUT YOUR BEST WORK
[11:42] I was chatting with Beeple (www.allanmckay.com/285). By having his work out there, it means that more of his clients are seeking out that specific type of work. They aren’t asking him to design a corporate logo. They come to him because they love his style. All this happens by building relationships and customer relationships. These are the areas artists tend to neglect in the beginning of their career. But this is how you get customers to come back for repeat business.
[12:58] The problem with word of mouth is that word is cheap. It means that new referrals will expect that your services are cheap. When you can pick and choose your projects, that’s where you do those projects that allow you to do a bit more:
- You deliver as much value as you can.
- You position yourself as a higher quality artist to attract higher quality artists.
- You put in the effort and quality on select projects that will become your portfolio pieces.
- You aren’t showing the crappier work for your personal work, for your home brand. That way people see the best of your work.
ATTRACT PREMIUM CLIENTS
[14:38] Over time, your brand and your reputation will attract better clients. The problem with repeat clients is that you’ll have more people coming back. Eventually that’s not sustainable. If you’re doing 8 projects a week, after a while, you can’t keep that up. You will burn out and you won’t have any savings. That’s why you want to be building that side hustle of your premium brand.
[16:19] If you have one premium client paying you $500 (while the rest are paying you $200), you can start eliminating the cheaper clients. You have to start attracting those higher paying clients who can substitute several cheaper clients. In addition, those clients often know what they want. If you go further and get clients that are willing to pay $2K, you start to get to the rate you deserve. Because most of you don’t even realize how much you’re worth. If people are getting a $200 rate from you, they think they’re getting a $200 product; whereas higher paying clients treat you like a premium product. And on top of that, they aren’t likely to micromanage you. They know what they want.
[18:28] The problem is when you are getting more clients, you will still continue getting repeat clients. Because you’ve been building relationships, more people will be excited to work with you. But you will start pissing people off because you’re now taking on too many projects and your quality starts to go down. Or: You will have to start turning people away. The return clients will start feeling underappreciated. But secretly, you’re barely getting by. It always comes down to the same: Working on a premium brand while attracting better clients. The work that you do quickly, 80% of it you don’t share; but you start to save the better quality work selectively as your portfolio pieces.
[21:05] Scaling your resources means hiring more people. You can start teaming up with certain people you trust. In theory that sounds good: You can hire your friend and you can supervise your work. But if the budget isn’t there, a lot of problems will start to pop up: you will have to monitor the quality of the work while still focusing on getting more business. So scaling is not a good solution in the beginning because the budget isn’t there yet. You want to remove yourself from the bottleneck later.
[22:50] A lot of the time, it’s more about being undervalued. You’re charging $200 while you should be charging $2K. Most of you don’t know how to do that yet. And most of you are afraid that if you raise your prices, you’ll scare away your clients. When you’re at the point of being bottlenecked, a lot of people want to take advantage of you. That’s the point where you can’t do all the work coming your way. The solution is to not turn away people yourself. The goal is for other people — clients — to turn you away. The big fear of raising your prices is actually a good thing: If you raise your prices, the cheap clients are the ones that will walk away. It becomes like natural selection.
[24:28] You can filter out the clients that are bad. They aren’t appreciative of your work, in the first place, and they underpay you. Now, you can raise your rates enough to where you can have just 5 clients a month — and they pay you more. These are the people that will see the value in you. Having too many clients is a good problem to have, but cheap clients pay you one fifth of what you’re worth while they cost 5 times your time. It’s insane how unprofessional cheap clients are! High prices clients are the high quality clients. They see the value in your service and are excited to work with you. They’re too busy to micromanage you.
[26:15] Ultimately, you want to earn more by working less. You can say no to a lot of clients who are asking you to work for cheap. Instead, you can raise your prices to $5K or $10K. You will scare away the cheap clients, but the quality clients will remain. You can position yourself as a premium brand. You can double your money but deal with fewer headaches. Which also means that you can really do quality work. You can focus on the work you enjoy. And the best part is that you get to pick and choose the clients you want to work with. You get to set yourself aside by doing quality work. When people start coming to you, you can establish your rate and your schedule. They’re coming to you because they love your work, your brand and your reputation. Not only do they appreciate your work and are willing to pay your rate, they already appreciate the work that you do specifically. They’re coming to you because you already enjoy doing it. So don’t put out work that you don’t enjoy doing. These are clients that want your style of work — which is ultimately what we want.
I hope you enjoyed this Episode!
I’ll be back next week with Peter Chiang, who is the Co-Founder of DNEG, as well as VFX Supervisor (from the client side) for Fast 9. We get into a lot of great stuff in that Podcast.
I also have another guest from DNEG coming up: Erika Burton who is the EVP, Global Head of Studios.
Until next week —
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