Discouraging Your Clients (for more Antifragility)
Nassim Nicholas Taleb is getting a lot of attention for his ideas about randomness, about avoiding tail risks (risks of ruin), about black swan events, and about skin-in-the-game.
He also famously talks about fragility. It’s a property of a system, a relationship between a system and an aspect of its environment.
A system is fragile when it breaks under stress. A system is robust when it stays the same under stress. But a system is antifragile when it benefits from stress.
He made the concept of antifragility popular, and wrote a whole book about it.
Freelancing, Antifragile?
Freelancing is a bit of a last-resort career choice. Client to client, you get some revenue coming in, sustaining your way of life. You don’t get the security and benefits of a salaried job, you don’t get to know if you’ll continue having paying clients that you like to work with, you don’t have the protection of the elements that an employer gives you.
Freelancing seems like a fragile way of making a living.
But there are a few ways to make your freelancing antifragile (making it benefit from unknowns, variability and stressors), and I’ll focus on one of them in this article:
I’ll try to convince you to discourage your clients from hiring you.
A Technique From Value-Based Pricing
I first heard of the idea from Jonathan Stark.
Jonathan is known for his idea about “ditching hourly billing” in favour of “value-based pricing”. When you sell your availability by the hour, you’re removing your ability to gain from your own efficiencies, and your client doesn’t have an idea of the whole price of your work. But you shy away from fixed-price projects because of the risks of scope changes. You don’t want to be caught having to do more for the same price. What you want is to find a fixed price that gives you margin, and is a bargain for your client.
When you move toward “value-based pricing”, you offer options for your work where you sell an outcome that’ll benefit the client at a price that’s going to be a bargain. To figure out those options, you have to understand the value.
And that’s where discouraging your clients from hiring you comes from.
Conversations that Get to Value, Add Value
When having a conversation with the client, you want to dig for the value.
To understand the value of a piece of work for a client, you first have to understand the intensity of their struggle, the urgency, the alternatives and the deeper motivations.
Those are risky things to be talking about. “The client will be turned off by my questions.” Maybe. We’ll see.
Let’s imagine two conversations.
Conversation #1:
Implicitly hoping to be hired
Client: What’s your hourly rate?
You: I charge X dollars an hourClient: How many hours do you think this will take?
You: It might take between… let’s see… 20 to 40 hours.
At this point, the conversation will then veer off into negotiating your hourly rate down, and it’s either your price against some other developer’s rate. You risk losing the client, and you don’t have an understanding of the value beyond an arbitrary rate and hours estimate.
Your availability is evaluated as a commodity.
Conversation #2:
Actively discouraging the client from hiring you
Client: What’s your hourly rate?
You: I don’t have oneClient: What do you mean? How else do you charge for your services?
You: I get a sense of what problem you want solved, I’ll spend some time listening to your situation and I’ll produce some options that will be a bargain for you.
At this point, if the client has had conversations with other freelancers with an hourly rate and an estimate, the trouble to give you extra details might be a turn-off.
Client: …
You: Are you talking with other freelancers about your project?Client: Yes, I’ve talked to a few other people
You: You know, I’ll encourage you to go with these other people. There’s a good chance that I’m going to pricier… Maybe I can help out right now for free real quick while we’re on the phone…
Here you’re actively suggesting that you’ll be the priciest option, and instead offering to help in some other way.
With the edge off, and the stakes being lower, the client might share more details.
Client: Well I’ve got a set budget for this, so I won’t be able to go for the highest price. Here’s what I’m trying to get done…
You take notes, you use active listening, you use reformulation to confirm what you understand to be the goal.
You ask questions to find out if there’s an urgency…
You: When do you think this will be needed for? Is this tied to an external event or some kind of immovable date?
To get a sense of the outcome and how to measure success…
You: If everything went smoothly and we pretend we’re at the end, what will we be celebrating when we’re done? What’s the hope from this project?
You show that you’re willing to take some of the responsability away from the client to ensure it works as planned, without their involvement…
You: In my options, I like to offer an option where I’m taking more of the responsability on my side for the success or failure. If things take longer, I’ll eat the costs. Would it be helpful for you to offload more of the responsability to someone else so you can work on your other projects?
These questions are low stakes for you. You already communicated that you’re okay with losing the client to other people based on price or on their risk aversion.
But asking those questions communicates that you’re ready to listen, that you’re ready to invest, and that you’re ready to take some risk with relationships.
More than that, you’re helping the client understand what they value. And that adds value.
It’s paradoxical how a simple conversation can position you as a top freelancer. The act of discouraging clients from hiring you, the posture you have to take to do so, the confidence it shows, those are remark-worthy behaviours. That client will take note.
When you communicate that you don’t want to lose a single client, you play in the fragility game that everyone is playing. But when you communicate that you’re instead more interested in listening than on selling, you’re communicating that you’re playing a different game than everybody else.
It’s a risky move, but you come out of it with deep information, you both get a calmer and more open conversation, and they get value out of the conversation and your immediate offer to help. That earns you one more person who can spread the word, and more practice getting to value.
Benefiting from risks: Antifragility.
Stay Sharp!
—
Pascal Laliberté
@pascallaliberte