Have you ever wondered why some writers can charge absurd amounts of money for seemingly simple projects, while other writers work their tail off for minimum wage?
This isn’t an accident. And no, it’s not luck.
There is a giant difference between writers who make boatloads of money versus writers who spend their lives getting paid pennies on the dollar—and we want to share it with you. Because not only are we passionate about helping people get started writing online, build an audience, create a timeless library of content, and launch a portfolio of small bets (in the form of digital products), but we are also passionate about helping writers, creators, and solopreneurs move themselves up into the highest tiers of income.
So, with that in mind, let us introduce you to:
The Relative Pricing Pyramid
Here’s the problem with the way most people think about pricing.
Let’s say you are a writer.
- You have been writing for a few years and feel competent in your skills.
- You have invested time into building yourself online, writing & publishing on a social platform like Twitter, LinkedIn, Medium, Quora, etc.
- You have built a public portfolio for yourself: a few Twitter Threads have gone mini-viral, a few Medium articles have been republished in big-name Medium publications, etc.
- You have even worked with a few noteworthy clients—companies people would recognize. You have some credibility!
We know hundreds and hundreds of writers who meet the above criteria.
So then why are they stuck earning $50 or $100 per article?
Why are they having trouble getting higher-ticket clients?
Why do they feel like their income has hit a concrete ceiling around $60,000 or $80,000 or even $100,000 per year?
The answer is: they haven’t moved their way up The Relative Pricing Pyramid.
The 2 Big Pricing Mistakes
When most people decide they want to become a writer, creator, solopreneur, or even full-blown entrepreneur or business owner, Step 1 is to come up with an idea for a product or service.
And Step 2 is to decide how much that product or service is worth to the customer.
- Mistake #1: How 99.9% of people think about pricing is they sit themselves down at their desk and think, “Hmmm… how much should I charge?” Most just throw a number into the air. “$100! $27 per hour! $5,000 per month!” They have no idea how they got to that number. There’s just something in their gut that tells them, “Hey, this sounds like it would work,” and then roll with it.
- Mistake #2: If you aren’t in the “pluck-a-random-number-out-of-a-hat” crowd, the other way people price their products or services is by looking around at the competition—and pricing themselves a little above or a little below someone else. So, if you are a freelance writer, you might go on Upwork and see “most freelance writers” charge $30 per hour and decide, “Hey, you know what? I bet I’ll get some clients if I price myself a little cheaper.” You set your rate at $27 per hour.
Both of the above are pricing mistakes.
In the first example, you are setting the price of your product or service based on your own gut feeling (which, for obvious reasons, isn’t rooted in anything insightful or productive about the customer you are trying to serve). And in the second example, you are setting the price based on the competition—which means you are showing up to the party in a neon shirt that screams: “I AM UNDIFFERENTIATED. I AM LIKE EVERYONE ELSE, JUST A LITTLE CHEAPER. THERE IS NOTHING SPECIAL ABOUT ME.”
So, let’s not do either of these options—shall we?
The 4 Levels Of Relative Pricing
Instead, a different way of thinking about pricing is relative to the urgency and importance of the problem you are solving. (Versus price relative to the competition.)
Here are the 4 levels of relative pricing:
- Commodity: You are solving a not-urgent, not-immediately-valuable problem. You are easy to replace. For example: a company is looking to hire content writers for their company blog. It’s not that urgent for the company, and hiring a content writer doesn’t solve an immediately valuable problem for the business—it’s just something the company wants to start working on. A zillion content writers can solve this problem.
- Optional: You are solving an urgent but not valuable, or valuable but not urgent problem. You have some leverage, but not enough to be a priority. For example: a company is looking to hire content writers for their company blog—specifically to create and clean-up blog posts that improve sales conversions on the website. It’s a valuable problem to solve, but not that urgent. And not every content writer can write blog posts that convert to sales, so it takes a bit more work to find a good writer who can.
- Priority: You are solving an urgent, highly valuable problem. You aren’t the only person who can solve it, but finding someone to replace you is hard work. You become a priority. For example: a company is looking to hire content writers for their company blog—specifically to translate pieces to Spanish because the company is launching a huge initiative in Spain next month and needs content to be able to send to Spanish-speaking customers ASAP. This is a highly urgent, highly valuable problem for the company and not very many good content writers speak both English and Spanish.
- 1/1: You are solving an urgent, highly valuable problem very few, if any people can solve in a way that is unique to you. There is no “next-best” alternative. You’re the only one. For example: a company is looking to hire content writers for their company blog—specifically to translate pieces to Spanish because the company is launching a huge initiative in Spain next month. When you get on the phone with the company, you tell them you can actually do a whole lot more than just translate pieces from English to Spanish. You actually have experience building & scaling content teams and can help THEM find and hire all-star bilingual content writers AND train those writers to not only translate previous pieces to Spanish, but come up with content ideas that will perform better specifically in Spanish-speaking markets to create a whole new content strategy moving forward for those geographies.
Notice how the more urgent and important the problem, and the harder it is to find someone to solve that urgent and important problem, the more you can charge ($$$) to provide the solution.
Said differently: the amount you can charge for your product or service is a direct reflection of the urgency & importance of the problem you are saying you can solve.
Why Writers, Creators, And Solopreneurs Stay Broke
Unfortunately, school doesn’t really teach us any of the above. (Even business programs to fail to teach Relative Pricing, and instead tend to teach people how to price themselves relative to the competition.)
Most of us spend our entire lives acquiring skills like a hammer in search of a nail.
- We build the skill of writing. And then run around telling people, “I know how to write! Pay me!”
- We build the skill of editing. And then run around telling people, “I know how to edit! Pay me!”
- We build the skill of email marketing. And then run around telling people, “I know how to do email marketing! Pay me!”
- Etc. etc. etc.
But this is the equivalent of saying, “I am a hammer. Give me a nail!”
Which puts the responsibility of figuring out what problem you (the hammer) need to solve that is urgent and important on the other person: the customer, the client, the reader.
And that’s a problem.
Because when you put the responsibility on someone else to decide what problem you are supposed to solve with your skill, guess what they’re going to do? They’re going to look for the cheapest, lowest priority problem on their plate. “Fine. You need something to do? Go do that annoying thing over there.” Which is exactly why so many writers, talented or not, spend their entire lives churning out blog posts for minimum wage.
Instead, you need to take ownership over the problem yourself.
- You need to define the urgent & important problem your skill solves.
- If you are not happy with the amount of money you are being paid, don’t ask for more money. Find a more urgent & important problem to solve (and the customer or client will usually beg you to solve it—and throw money at you for doing so).
- If you find other writers, creators, or solopreneurs trying to copy you (and become your competition), don’t fall into the trap of screaming, “Yea but I’m better!” Move further up the Relative Pricing Pyramid and find an even more urgent & important problem to solve. Leave them in the dust.
Don’t run around saying, “I’m a hammer! Give me something to do!”
Instead, say, “I see an urgent & important nail you (customer/client) need fixed ASAP. Do you want me to take care of that for you? I’m a hammer.”
That small difference, right there, is what separates writers who make $70,000 per year from writers who make $500,000+ per year.
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