I don't think we're disagreeing here about pricing at all!
Lots of very good freelancers are undercharging and everybody should price on value delivered. (Especially those freelancers who disappear and only get work done when yelled at. If only!)
That's why a lot of the educational content I've used to promote Freckle is about delivering, understanding & capturing value… for freelancers. (Which includes understanding & identifying your ideal clients because if you use a hammer to break a window and steal $1 million in diamonds, it's worth a lot more to you than if you use it to hang your kindergartener's fingerpaintings.)
Any freelancer can become a consultant, though, by changing the way they work. Read a few books, take personal responsibility, experiment with being more than a tool for executing the client's vision. If you ask your client questions and debate features, that's already a good start.
This kind of consulting — consulting, as in the dictionary definition -- is a huge value and therefore hourly rate multiplier. Anyone who improves their management skills can vastly increase their rates.
If you only provide execution, and not the other stuff I described, you will hit a ceiling a lot sooner… and suffer more price comparisons. Not as many problems as a person who just says "I code in Ruby" rather than "I help your biz make more money," but more problems than somebody who approaches the biz like I did!
BTW - I rarely did just-talk engagements. All the stuff I described above was as part of design-dev projects. The process I came up with is as follows: We would meet the client, give them a fixed price quote ($5-10K) for these meetings and guidance and the report. They would pay 100% up front. The report, then, was a deliverable they could take to use with any other (cheaper) service provider to implement. Which, naturally, never happened, because as soon as the client saw how we ran our projects, they would never dream of hiring anyone else.
> If you ask your client questions and debate features, that's already a good start.
I've always been doing that, and felt uncomfortable to call this activity ‘programming’. Local clients (small businesses) hire a web developer to build a site, but it usually requires at least some education and research, as they rarely have good understanding of their needs. Still I'm shy to call it consulting except to myself. Your comment helped me understand better that it's almost exactly that consulting everyone talks about—thank you.
You mentioned books—can you recommend some titles, authors, or maybe subjects?
One book I found very valuable (and discovered on another HN thread) was Gerald Weinberg's "Secrets of Consulting." That book generated lots of good ideas. If you pause at the publication date, don't. You'd be shocked how little this stuff changes, until you realize (as Weinberg explains) it's always a people problem, and people haven't changed.
I also recommend Patrick's recent podcasts/interviews on the subject.
Thanks a lot for recommendations, the book looks very interesting. I have Patrick's podcasts in queue, and just realized that ahoyhere is Amy Hoy who was a guest on one of the episodes. =)
I'm interested in the fact that your clients never sought someone cheaper to execute the plans in your report. If one of the (or THE) difference between consultants like yourselves and freelancers is the research and strategy work, then wouldn't it matter less who executes that plan?
In other words, once you've come up with the strategy is there still extra value in it being executed at your rates, compared to a freelancer executing the same plan at a much lower cost?
You're assuming that the most important thing to clients is cost. For a decent client, it never is.
It's a huge amount of work and risk to hire somebody else after a service provider has already shown themselves to be self-managing, self-directed, professional, timely, responsible, and knowledgeable/skilled.
Lots of very good freelancers are undercharging and everybody should price on value delivered. (Especially those freelancers who disappear and only get work done when yelled at. If only!)
That's why a lot of the educational content I've used to promote Freckle is about delivering, understanding & capturing value… for freelancers. (Which includes understanding & identifying your ideal clients because if you use a hammer to break a window and steal $1 million in diamonds, it's worth a lot more to you than if you use it to hang your kindergartener's fingerpaintings.)
Any freelancer can become a consultant, though, by changing the way they work. Read a few books, take personal responsibility, experiment with being more than a tool for executing the client's vision. If you ask your client questions and debate features, that's already a good start.
This kind of consulting — consulting, as in the dictionary definition -- is a huge value and therefore hourly rate multiplier. Anyone who improves their management skills can vastly increase their rates.
If you only provide execution, and not the other stuff I described, you will hit a ceiling a lot sooner… and suffer more price comparisons. Not as many problems as a person who just says "I code in Ruby" rather than "I help your biz make more money," but more problems than somebody who approaches the biz like I did!
BTW - I rarely did just-talk engagements. All the stuff I described above was as part of design-dev projects. The process I came up with is as follows: We would meet the client, give them a fixed price quote ($5-10K) for these meetings and guidance and the report. They would pay 100% up front. The report, then, was a deliverable they could take to use with any other (cheaper) service provider to implement. Which, naturally, never happened, because as soon as the client saw how we ran our projects, they would never dream of hiring anyone else.
That's the power of being a consultant!