Early Email #008: Where's the money?
Good morning 👋
We're not talking strictly email today, so if that doesn't interest you, I'd understand if you just hit delete on this one.
But if you'd like to give it a chance...
Question for you: How do you determine pricing for your services (or salary)?
It's common to feel you should get more money for the value you deliver.
But have you ever felt you should be getting less?
Did I just say get paid less? Yep.
Today I'm making the case for performance-based pricing.
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Story Time
I had a client who paid me a $3,800 per month retainer.
We worked well together, and she was nothing short of a dream client.
At first, the numbers were coming in.
But the client stopped investing in other email channels—no SEO, no content... social media and ad strategy were nil. No new products, no more high-quality images, etc.
Yup, you know where this story is going.
I felt like a thief
Email can only do so much, but it can't do all the selling on its own.
Sales went down.
As in less than $3K per month down.
She still wanted to work together, but I couldn't justify charging her damn near $4K per month when the results weren't there.
On the other hand...
I know my worth as an email marketer.
I've helped businesses go from zero to six-figure-months in a matter of, well, months. Happily on their way to seven figures.
One time I charged a small (but mighty) company $3K for a set of emails that made them $60K in weeks. And they were starting from scratch. Those emails are still going to this day.
So naturally, I felt like I should've charged more.
But hey, I'm the one who set the price at $3K, and they accepted. No one cheated me out of anything.
From one biz owner to another
As an agency owner, I know what goes into building a business.
Personal savings on the line, 60-hour work weeks, sacrificing family time, the risk of the business not working out... it's a lot of sacrifices.
So I don't take it lightly whenever I sign a client.
I want this to be a fair deal for everyone.
How to go about it?
"Your success is my success"
Cliché for some, mantra for me.
My business is literally making other businesses more money through email.
So I shouldn't get paid if I'm not making the client money—but I should be compensated properly, too (especially when I do an exceptional job).
How? Performance-based pricing.*
I get a percentage of revenue from email (revenue share). For example, at 5% revenue share, if I make you $100,000, I get $5,000. Only made you $10,000? Then I only get $500.
With this pricing model, I've found that happy medium between charging my worth and justifying that $$$.
I lower the risk for the client and I have the incentive to do a great job.
We can all win this game if we do right by each other.
So I'm going all-in on this.
Personal choice
I'm by no means insinuating that people who charge a flat rate are bad.
Nothing like that.
I know freelancers and agencies who charge a flat rate and deliver incredible ROI for their clients.
I also know of agencies who charge a retainer fee on top of revenue share (performance-based), so they get paid regardless.
Each business is different.
I'm doing what makes sense for me.
Do what makes sense for you too.
So with that, tell me, how do you feel about performance-based pricing? Is this something you'd consider (or already do)?
*Caveat: The client has to fulfill their end of the deal—keep on offering great products, grow other marketing channels, provide high-quality materials, etc.
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Next Week (Seriously this time)
Starting next week, I'll definitely be sending you emails from kat@katgarcia.com.
If you don't see an email from me next week, please check your spam folder.
Happy Emailing,
Kat
