Fractional Resources

The Dangers of Hungry Pricing

We touched on the idea of “hungry” pricing yesterday. This is your “I need to eat, and this will keep me fed” price.

Should be obvious, right?

In the world of Fractional Executives, we don’t run into this as much. If you’ve reached this point in your career, you’ve probably got a pretty good network that will keep you fed and happy if you ask them.

But any soloist can find themselves with a gap - and short on runway.

The Temptation of Rock-Bottom Pricing

It’s really, really, really tempting to take (or worse, offer!) that rock-bottom price to land a gig.

If you do, hey, that’s okay - we’ve been there, we understand.

But watch out.

The Hidden Cost of Hungry Work

If the scope of your hungry gig eats up all of your time and brain power, you can’t spend time working On The Business. When it wraps up you’ll be right back in the same place you were. So control scope! Keep up the bizdev!

The Power of Runway

On the other hand, if you have runway to make it happen, using our made-up pie-in-the-sky example pricing numbers from yesterday:

• Hungry: $10,000/month
• Happy: $20,000/month
• Ecstatic: $100,000/month

There’s a 10-month difference between hungry and ecstatic.

One month of ecstatic will feed you for ten months.

Investing In Your Business

So if you spend ten months of runway focusing on:

• Fine-tuning your bizdev chops
• Sharpening your messaging and niche
• Getting out there and talking to people (the most important part anyway)
• Doing the legwork and conducting your Listening Tour (they say you need to talk to 100 people in your ICP before you know if there’s a business to build…)
• Generally making yourself look like the expensive-but-worth-it option

…and on the other end of it, you land ONE Ecstatic client for ONE MONTH…

You just paid for your 10 months of runway. You’re back to the same place - you’ve got another 10 months to find another Ecstatic client to help for a month.

The Power of One Ecstatic Client

But maybe that 1 month turns into 10 months. And now you’ve got 100 months of runway.

You only need one of these to feed you for a long time.

And now, since you probably over-scoped this first Ecstatic client, they’re probably sucking up your bizdev time. But that’s okay - you’ve got more runway to manage the gap between this client and the next.

Of course, ecstatic clients usually lead to ecstatic referrals, which is another form of bizdev.

The Freedom to Adjust

Maybe after a few months, you recognize that’s happening, so you re-scope. After all, your Ecstatic package was something like “we’ll just make sure you’re happy, whatever it takes,” right? So you have complete freedom to back off and see if they’re still happy.

You might say something like: “We’ve made great progress over the last few months. Let’s review our goals and see if we can adjust our engagement to focus on the highest-value activities for you.”

The Bottom Line

Be careful when you take hungry-priced work. It can prevent you from ever hitting your happy place if you’re not careful.

Instead, invest in yourself, aim high, and don’t be afraid to adjust as you go. Your future self (and your bank account) will thank you.

A Final Note on “Ecstatic” Pricing

In case you think that $100,000/month number really was a made-up dream - it’s not. I know one Fractional who pulled this off. He got Busy and he started doubling his price until some customers turned away and he found his new happy price. It was a lot higher than he ever imagined it would be.

I know another who’s sitting around $60k/month for his “whatever it takes” offering, with 3-4 concurrent clients (not all at the same scope). I need to remind him to raise his price.

These numbers are real, and they’re achievable. But you won’t get there if you’re stuck in the “hungry” pricing trap.

Wrestling with your pricing strategy? Book a Strategy Session and we’ll work through your specific situation.