020: Increase Your Consulting Rates | Patrick McKenzie

Key Takeways from my chat with Patrick McKenzie:

The Easiest Path to Earning Higher Rates: Create an Elite Club of One

Find a problem that can have an amazing payoff for your client, and which you are uniquely suited to solve. You shouldn't be competing with everyone who can create a Wordpress site. You should be competing at most with an elite club of several hundrend people worldwide who can be a subsitute for you. For example many people can code, but relatively few people have the combination of specific software engineering and marketing skills that Patrick is able to offer. You can start off undifferentiated - but look out for a differentiating skill or specialization so that you are no longer competing with everybody - the easiest way to become a member of an elite club is to start your own.

Find Clients With an Expensive Problem that You Can Help Solve

The natural temptation is to take your expertise and start finding ways to apply it. Patrick suggests inverting this to first looking at the "richly compensated problems in the world" then filtering down to the ones that you can "conveniently move the needle on with your expertise".

Examples:

Target businesses that have high margins. For examples there are lucrative challenges to solve in healthcare, financial industry, high-end services such as accountants and lawyers (a lawyer making $600/hr is less likely to be scandalized by you making $500/hr). Target businesses for who their online presence is the core of their business, not just a small component. Pick your favourite service (such as any number of SaaS apps), who are in the business of providing a service but not custom solutions. Call them up, let them know examples of what you've done usign their service, and get on their referral lists for consultants who aid implementation. Go to agencies in the same field who specialize in services parallel to yours, and establish a relationship where they subcontract to you. Pay attention to the revenue a company makes. Successful changes can have a greater impact and they are more likely to be willing to hire you at your rates in the first place. Just ask: who are the people that need expensive problems solved?

How Patrick Would Rebuild a Client Base (and his rates) if He Had to Start Over Today (without his online fame and past projects)

Prerequisite: Start by being good at what you do.  Speak in front of people who can consume your services/products. To speed up getting invited as a speaker, create your own event and speak at it! Give a talk on some topic in the format "How to do x for the y industry". Your speech should deliver 95% educational content and 5% pitch for your services. Connect with the attendees after the event (they will want to talk to you). Find out why they attended and then schedule a coffee meeting to discuss their problems further. Turn these coffee meetings into a sales conversation. At the coffee table you are in a market of one - you are the one expert at the table and no one else has that positioning right now. Review Einar Vollset's outbound email strategy.