Hey, everyone. Welcome to Tales from the Pros, and this is Michael Georgiou, your host and cofounder of Imagine Ovation. My amazing guest here today is Chris Do. Did I say that correct, Chris?
You sure did. Good to know. Thank thank you.
Chris is actually an Emmy award winning director, designer, strategist, and educator. He's the chief strategist and CEO of blind, executive producer of the school, and the founder of the future, which is an online education platform that teaches the business of design to creative thinkers. His firm's work has been recognized by national and international organizations.
Chris also speaks and lectures all around the world on the business of creativity. I'm sure many of you have seen his engaging and very insightful videos of on YouTube, which me and my team have, and we completely loved it. You know, it's awesome. You're doing great stuff. This is Tales From the Pros, where business leaders and influencers share their stories of inspiration, struggles, and successes.
And I'm your host, Michael Georgiou. I'm I'm super humble to, you know, to have you on the show here today. Really appreciate it.
Thanks for having me, Michael.
Absolutely. Yeah. So, Chris, just kinda kick you know, get get the ball rolling here. How did you start your design agency blind and the future? You know, tell us a little bit about your story and essentially how you got to, got to where you are today.
Sure. So right around the summer of 1995, I graduated from ArtCenter. I was thinking about my next moves, and I I wanted to really work with my good friend and somebody I really admired from ArtCenter. So my first job was working at Epitaph Records right in the heyday of punk rock, when the offspring was blowing up. And so I worked there for a brief period of time and didn't find that that was a good fit for me, that I didn't feel like I was getting to express the totality of my design education experience in aesthetics, only working on a punk rock art.
So I quit and moved on freelancing, and I got a call out of the blue from my uncle who asked me, do you wanna start a design company? I know you've always dreamt about starting something, and he was speaking just straight into my soul, into my heart. Of course, it jumped at the opportunity. So I met with him and his business partner, over dinner at the Westin Bonaventure in downtown Los Angeles. I submitted a business plan, pretty much a joke if you ask me, just looking back on it.
I just put some numbers together, and I got some advice from a friend whose father was, an investment banker. I submitted to him. He glanced at it, and I had worked on it for days. And he glanced at it and he said, I'm ready to make a commitment right now. I'm gonna write you a check for $5,000. Let's get started. And I was thinking, oh my God, who does that over dinner? Who just hands you a check? And then that's how I kind of launched the the agency. Wow.
Now what happened over time was they had many different diverse interests business interests that pulled them away from wanting to do the design company with me because he was going to invest, in the company and send me work. So, ultimately, we parted ways very amicably, but then I got an opportunity to start my own company. So so Blind as a design firm was incorporated in December of 1995.
That's cool. And you started the future after that. Right?
Yes. Much, much after. The future started it's only two and a half years old. Before that, it was called the school, and I had a business partner. His name is Jose Caballero, and we worked on it together. I was a cofounder and executive producer of the content. He and I had different ideas about what we wanted to do, so we also parted amicably, and I restarted it as the future. So this is only now 2 and a half years old.
Nice. And I know you have a, you have a podcast as well. Right? I've seen some of the episodes.
Yeah. We create a lot of content. So we have 2 channels on YouTube, The Future is Here and The Future Academy. And we also have a podcast. I write pretty frequently. I post things on Instagram and Twitter. We do lots of live streaming content.
That's great. You know, I love your story, Chris, because, it reminds me a little bit of me when we started Imagine Ovation about 8 years ago. My brother-in-law, he's my business partner who, he actually just called me out of the blue one day, and I was actually unemployed. I I came back from my master's degree, and I was unemployed for, like, 7 months. I was 23 at the time.
And he was like, hey, man. Do you wanna start a tech company? And I'm like, I guess. I mean, I was unemployed. I had no other choice. Right? So I was like, alright. Let me get the experience, and and let's see what happens. So I kind of just took the risk and thought, you know what? Worse comes to worst. You know, I have the experience of starting something. Right? And we just kind of went ahead and did it, and here I am 8 years later. Pretty fun. Yeah, man.
It's just somebody kinda reaching out and pushing us and nudging us a little bit that gives us the courage to try.
I know. I know. It's and I'm sure, you know, I know you deal with big brands, and I'm sure you've dealt with a lot of startups too. It's it's it's crazy because people feel I know you being an entrepreneur, it's so much work, man. You know what I mean?
It's people don't they don't prepare you. The world doesn't prepare you of how much work it is to build a company. And when you until you actually start doing it. And I've met so many, people that wanna start a business, and they're like, oh, man, like, you're you're probably living living the life as a as a business owner. I'm like, man, I'm I'm like, it's a lot of work.
You gotta be prepared to put in a ton of work and make a lot of sacrifice. It's it's not easy. There's a high failure rate, so you gotta be really, mentally prepared to to really just grind out.
Right. People mostly look at the positives, being independent, self made, being the boss and having other people do the work, and reaping what they imagine to be all the rewards. But it's a ton of work. It's a lot of late nights, and you never have a day off if you think about it, because you're always thinking about what's next. What's next? How do I manage my payroll? How do I grow my team? How do I address Bobby's issue? How do I promote Mary, etcetera?
Yeah. Yeah. Definitely. Yeah. A 100% agree. So talk a little bit more about your agency blind. In your experience, Chris, what does it take to really grow, scale, and maintain agency or even a company in general? Just any good tips and processes that work for you over the years?
Yeah. Once you realize your primary job and responsibility is sales and marketing and customer service, then you have the right mindset. Until then, you're really just a hobbyist trying to do design work while really living in that mindset of a glorified freelancer. You're an independent contractor not really thinking about a business. Because the minute you start thinking like that, I need to grow sales.
Excuse me. I need to grow sales, and the way to do that is to put myself out there to be visible, to make content, to network, and to land and close jobs, essentially, and then to hire and bring in the best, most qualified people to do the work with me. So that's a very different mindset. So if you start to understand that, then all the creative people in the world are sitting there studying the wrong thing. They're studying and practicing the craft and the making of things, and they haven't learned much about business, marketing, and sales.
Yeah. So it's it's so did you guys have I mean, I'm blind. Do you have a lot of, more specific internal processes of, like, for example, how to pitch to a client, how to win business, or is it all kind of case by case? Is it just is it more about just you hiring great people and then doing their own thing and then just understanding the the culture of your business, understanding what kind of clients that you wanna target, the audience, all that? Or or is there a specific sales process in terms of how you won some of these big brands that you've that you're working with?
You know?
I think to make it simple, you can break this into 3 parts, 3 primary parts. And if you look at it and you can visualize this in your head, it looks like an upside down triangle. Right? It's a funnel, it's wide at the top and very narrow at the bottom. So the first part is getting the opportunity to talk to clients, and this is through sales, through marketing, through social media so that people get to know about who you are.
This could be both both passive and active. You can put out content and hope that they come to you. That's called inbound marketing, and you could do outbound, which is directly pick up the phone and cold call people and shoot them an email, send them a demo reel, send them a self promotional item, something like that. That would lead you to phase 2. So of this very wide top of the funnel would lead you to the people who are potentially interested in you, And it narrows really fast if you can imagine that.
So if you reach out to say 200 or a 1000 people, you might have 50 or 20 qualified leads of which only a few you can book. So it's very important for you to have a really wide top of the funnel awareness. And then once you get them engaged, so they they see something that you do, it connects with what they want to do, and so they reach out. They shoot you an email, they might call your office, and so this begins the sales part of it. The first part was marketing, now we're doing the sales.
And we definitely have a process. It's not everything's a free for all. I wonder what the clients are gonna say. We do have a very specific process. And through doing business for 23 years and having been coached for 10 of those years, you learn what the questions are, the rules of engagement, what they're looking for by learning how to ask really specific questions and how to conduct yourself.
So the problem that you learn is this, is that we have, happy years. We listen and hear only for, the things we want to hear. So the client says to you, I really think we need to stick pretty close to to the original campaign. What you hear is, hey. Do something new and innovative and fresh that we've never seen before.
And that friction that exists between what you think you they want and what they really want and what they said, so your subjective anticipation and the objective reality of what they're asking for is usually where most creatives self sabotage. Okay? So now you go through this process and you learn through many iterations, through failure or through coaching or by watching other people do it. You had a great mentor. Now you learn how to bring the client in, and so now the client's interested, you're submitting your bid, and they, through some mysterious ways of deciding, it could be a factor of personality, charisma, creativity, and price, or all those combined, and then they decide, we want to award the job to firm A, B, C, or D.
And if you're the one that learns how to play this game really well, your close ratio goes up. I've always felt that if there are 4 people bidding on the project, you have a 1 in 4 chance. And don't be delusional. It's just a numbers game. So if you can win more consistently than the number of participants in the competitive process, you're doing really well for yourself.
So before I hired our business coach, we were winning approximately 20% of the projects that were $200,000 or more. Once I hired the business coach, I started to learn how to conduct myself the rules of engagement, things I mentioned before. We started to close at 50, 60%. That means that half the time flip a coin, we're gonna win the job. We can't always determine which half.
We hope it's the higher half and not the lower half budget, but that's where we refine the game and I start to teach the team and my salespeople, this is how you close the job. The last part, the third part is actual the management of the client, the onboarding, the distribution of the project, the creative brief, and doing a great creative job. Because if you don't deliver at the end of the day, part 1 and part 2 won't really matter very much.
Yeah. No. That that's right. Yeah. That's it's pretty similar how we conducted it at our company as well.
I I think I mean, I I from what I've understood or, what I've experienced is it's it's always difficult to generate all those leads. I mean, we get a lot of our leads from from Google. Most of our leads actually come from Google, from a lot of our SEO efforts. Not really much from social media. At least for my company, I found it more difficult to find leads from social media, but we also don't have a huge social media presence.
Nothing like like blind or the future. I mean, I you I mean, I'll your content, man, gets amazing engagement. I I'm I'm a bit jealous. I'm just like, man, this guy is so good. Like, he needs to give me some tips on how to get, you know, all the all this engagement because the way you brand yourself, it's connected to your company.
So when they see you as a thought leader, right, see you see this guy, Christophe, as, man, this guy knows his this guy knows his stuff. He knows his he's he's an expert. They're gonna come to you. Right? So you're probably getting a lot of leads from social, from Google, probably from many different funnels, or are you guys also outreaching to a lot of businesses as well?
Well, let me answer the question this way. As of the beginning of this year, we stopped doing client work altogether. We're entirely in the content business now. So Yep. Excuse me.
Let me tell you how it used to work. So for a number of years sorry. I was just choking on my own saliva here. So for a number of years, we have sales reps who do the hard work of shaking the trees, pounding the pavement, and always being in the face of the people who make the decisions to, to hire and to procure creative work. Right?
So they're out there doing their work. And then simultaneously we are creating content, we're building up our website, building amazing case studies so that we're working at this from two ends of the spectrum. The outbound strategy was the reaching out, the cold calling, and the inbound, which is create enough content on all the different platforms so that the people who are in the position, who are looking for you right now, make it easy for them to find you and to establish some kind of credibility once they find you. And that's the key. So through the combined efforts of my own speaking and and public kind of persona or visibility combined with the sales effort, that should be the double pronged approach to getting work.
Now as we transition from being a service, creative services company to a content and, and productize, company or product company, the it's very different. We create a lot of content on YouTube. We write things on Medium, on Twitter, on LinkedIn, and through that, we stay in touch with people and then they reach out and ask us to help them on their projects and to consult on their projects. Now since we're not doing much of that work anymore anyways, it's not really, our our mission anymore. So what we do with those job leads is we just refer them out to other people.
Mhmm. Mhmm. Yeah. You're probably so booked, right, with with client work that's there's there's no point of of taking on more work. Right? Because then you gotta scale it more, hire more
people. Right? Yeah. If that were the case, actually, we're not even doing any client work anymore. It's all from yeah. So we Okay. We have walked away literally from 6 $150,000 from new client work from very high profile clients, and it's just not for us anymore.
That's crazy. So so when you say product work, what do you mean by that?
Well, the way that we sustain ourselves I mean, we produce a lot of videos on YouTube, over 800 videos now. And the way we make money is through a number of different things. I'm gonna lay out for you all the ways we make some make money so in case something hits what your audience, they can say, oh, I could do that too. The primary way that we make money is we sell digital books like, PDFs of ideas, templates, forms, things that we've used as business tools to help people. One one example of that is the perfect proposal.
So Ben has authored and written a template and a keynote template on how to write a proposal so that you can close more jobs so you can look more credible and ask for more money. The other way that we make money is through courses. So we have a combination of self study and video based courses that people buy, and, and that's the bulk of how we make money. We have people who voluntarily give us money. We call them sustaining members, and they donate anything from $5 to $25 a month, sometimes even more.
Now some people want to engage in my group coaching, Facebook group, which is $250 a month, and I have 270 people in that group. Some people hire me as a coach for $1,000 an hour for an hour at a time. And we also have corporate sponsors who want to do content with us and pay us to make content together. And then we have a number of affiliates where we help sell other people's products and they pay us a percentage. It could be anywhere between 15% up to 50%.
Wow. That's awesome. You you've gotten into such a great level. It's you know, you don't even have to, go through that client grind anymore. You know, the No
more grind.
Yeah. Yeah. It's it's so hard, man, because, you know, the clients have such high expectations and deadlines, and it's it's a very stressful, stressful business. I mean, that's what we're in right now with, with building apps. It's always dead tight deadlines and, sometimes, unrealistic, expectations, that that the client wants to set, that we feel we can't deliver. It's just it's it's hard because I I definitely know that game.
I know.
I'm really happy for you that you've gotten to that point where you can get paid for your consulting, and you have the future making you money. And you probably have the podcast. Are you monetizing the your podcast as well?
Not too much. We we we mostly release content without monetizing it, hoping that what people do is they have a sense of obligation and reciprocity where they receive a tremendous amount of value. So when they think about buying a product or course, they're happy to give us their money, and many people do do that. And I forgot to mention, we're also running workshops and boot camps now. So we're we're transitioning from a service creative services company fully to an education product company.
That's great. And just kind of going back, rewinding a little bit in in regards to, dealing with the larger brands that you deal with, Chris, or you dealt with before. You know, in your design and consultancy agency, you know, being in a saturated space or when you were in the in the service based business, what did it take what did it really take for you to win over the larger brands?
There's a very simple idea that everybody can apply. It's called trading up. Okay. So everybody wants to work with Nike or Xbox or some giant corporation, and you just set your sights on that. And what happens is at that level, they have anybody that they can pick from in the entire world at any point in time, and they can hire them.
So what you need to do is you need to just trade up. So you're gonna do something for maybe a local sporting goods store. Maybe they have a small chain. Maybe there are, like, 12 stores, and you do some work for them. And through that, you get access and create some credibility in the sports market.
And then you work for a 3rd or 4th tier brand. Maybe it's like Asics or something or Skechers or one of those other brands, and you do work for them or one of their supply companies, and you just keep trading up. You keep trading up. There's a fairly famous art experiment where somebody trades a dollar all the way on up to buying a house. They keep trading the dollar for this and then they take whatever they're able to trade that for and they keep trading it up until they get bigger and bigger.
So it becomes a canoe or a motorcycle and then it becomes a car and the car becomes 2 cars, a van, a camper van, and then becomes a house. You just keep trading up. So you all can take those little steps towards getting to the bigger clients. Now let me put it in very practical terms. So in the very beginning, we wanted to make commercials.
That's what we did. Right? So the first kind of commercials that we can get are very low budget. They tend to be public service announcements, PSAs, and they have the budget of, oh, don't know, 500 or a $1,000. It's not a lot of money and it's a lot of work.
So you do that and that gets somebody's attention, and then you might be able to work on some local regional spots, TV spots, where you animate some type. And then that becomes part of a national campaign, and then you keep trading up. And that's what happened. Now for us, we traded up really fast. So we went from a PSA in our 1st year to doing a car commercial for Buick, I think in year 2, to doing Mitsubishi Motors in year 3, and then we went national and then international in year 3a half.
So just it seems like it just kind of building up. Once you build your credibility, you you get in with a smaller tier brand. Right? And then what happens is you start to get that experience, get your name out there, and then the larger brands start to notice that you've worked with some of these other industry similar brands as well. Right?
That's right.
Yeah. Makes sense.
Mhmm.
So it's kind of a yeah. It's just a it just take takes a lot of time and patience to get in there. So you're not just gonna, I I I it seems like a lot of people, at least that I've met, they try to get in with the larger brands without having worked in that industry vertical before. You know? So that a lot of these brands, they want you to have that experience within their, within their market.
Yeah. You can you could do it. Some people are able to do it because they're really great at self promotion. They've got that that x factor. They're very charismatic, and they just burst on the scene, and they just jump straight to the top.
But for the rest of us mere mortals, you gotta just grind your way up. Just remember, every every it's like a snowball. It starts very small as a snowflake at the beginning, and it winds up as being a gigantic avalanche at the bottom. Right? So that's what you wanna do.
When did you start to see your company really boom? Was it after a certain amount of years? Was it, like, after that because you always hear after 10 year it takes, from what I've heard, is it they say it takes 8 to 10 years to really build the foundation, a strong foundation of a company. What what did it take for you guys to do that?
I think the key to our growth and success back in the mid to late nineties was to be able to hire a credible sales rep. By having a sales rep, a sales agent working on your behalf to procure work opportunities for you made a big difference. Here's the catch 22. Sales reps, they want somebody who's easy to sell. Somebody who's easy to sell means they're already in demand.
They're very popular. They have a body of work that people want to hire. They naturally and and it's human to want this to do the littles the least amount of work to get the maximum results. So when you're a student starting out, you have no real credible work on your reel. Nobody knows about you, so it's a struggle.
They won't represent you unless you can get work. Well, to get work, you need representation. So this is the key. So for us, it was once we started doing some high profile work for Mitsubishi Motors, I was able to get a rep. Prior to that, I called 6 reps. They all turned me down immediately. So that was the key. Once you got a sales rep, they could go out there and they can go and do the hustle that designers and creatives aren't really good at doing.
Right. Right. And is was that the time in your agency when you really found your true worth and value? Like when did you really, in your career in general, when did you really find your your worth, Chris, and your value? At what point in time?
Can you narrow down that question? When you say worth and value, what does that mean to you?
What what that means to me is for the way I would I would in terms of my, like, worth and value in terms of my company. So the way the way other people would view us, how credible we are. What are we worth? Are we worth a certain you know? Because I I did see some of your content on value based pricing, which I love, and I'm gonna ask that question in in a few minutes.
But in regards to value, just like what are we worth in the market? Are we are we one of the best, you know, agencies in the market? Do they see us that way? Do we portray ourselves that way? That's kind of what I mean.
Okay. Yeah. So the value and the worth is relative to maybe who you compete against, And that's a pretty clear indication. So if you're competing against companies within a 30 mile radius, well, you may be top of the city. You might wanna be top of the state or the country or in the world.
So I know from the very beginning actually, because the market that we were in was underserved, meaning there was great demand for the work, but not enough people who are credible at doing it, meant that we were competing against what I would consider the top 10 firms in the world at any given time almost immediately. So I would say about 2 or so years into running blind, we were already competing against these behemoths. We're 2a half people competing against 50 people at another design firm or a 100 people. So now that's good because that means you're being considered and thought of in the same conversation, but it also meant we lost a lot because their their small team is bigger than our whole company. And it it felt very demoralizing because we'd go up against them, and we would lose.
I mistakenly thought at that time that it was our creativity that wasn't helping us. That means that they had superior creative, but it really wasn't about that at all. It was really about learning to ask questions, understand what the problems and the challenges were, and then solving that. Prior to that, I was listening, sort of, and then I was just going back to the studio and creating whatever I wanted to create. And so there was a misalignment between the work that I produce and what they wanted to see.
I totally misunderstood, and I didn't understand that because I never learned how to do that in school.
I see. I see. Okay. No. That makes sense. And in regards to, you know, pricing, I I know you have some awesome content on this. You know, I really love it. Specifically, value based pricing. And I know many companies and people struggle with this concept. Can you explain that in more detail? I know you have a video on it as well.
Okay. So there's 3 keywords that people need to understand and the definition of them and how they're they may be using these terms interchangeably, but they're very different concepts. That is cost, price, and value. Cost is what it takes to make something. That's the raw materials, the labor, the overhead, the insurance on the building, all that kind of stuff.
And then price is what a customer agrees to pay a manufacturer. Okay? And the price is determined by the cost plus profit margin, and that number, the profit margin, can be totally arbitrary. Some companies set the profit margin very tight while some set it at a very wide range. The best way to look at this is to look at shoe companies.
Okay? Because we can go to a discount shoe company and buy a pair of sneakers for, say, $20. And that means that somebody still made at least $10 profit on the on the, the sale of the of the shoe. But then you can go to, say, Nike and get limited edition Jordans or Yeezy Boost and pay 3, $400 for a limited edition. The raw material, the cost to make it, is pretty much the same, but the price which is set to the customer and they agreed to pay for it is because they see something else in there.
Value, unlike cost and price, is what benefit the customer sees when they purchase it. So when they buy a pair of Yeezys, it's debatable whether or not they look good at all, but they feel like they are able to get something very exclusive that only a few human beings can have. That makes them feel more special and good inside, so they're willing to pay in excess of what it costs to make. So this is the beginning of understanding value based pricing. So there's cost, there's price, and there's value.
And value is determined by the individual and cannot be set, except for from the person who's making the decision to buy something.
I see. So you don't think the, the hourly based model works. I mean, we used to honestly, Chris, we used to do that. We used to do the hourly model, and I'm sure you know a lot of other design agencies and and technology companies, they'll say, oh, it's a, you know, 150 an hour, $200 an hour. But it's, honestly, it's really hard to do that, because first of all, the client will want a record of all the hours that have been used so far.
Right? So it's there's so much account there's so much time spent on accountability on the hours. Right? And it's it kind of then they start to question, they start to question the trust between between, you know, in the relationship whether the hours are worth the work. You see what I'm saying? So Of
course.
I love your model. My team actually, watched that video, and, I and I'm being honest with you. It really helped our my company, Imagine Innovation, so much, man, because it it shows we're able to to, show the show the clients now what they're actually gonna be getting. There's more value in the conversation than than just saying, hey. This is gonna be 2 1000 hours.
Right. You know
what I mean?
Yeah. Yeah. So there's 3 ways to determine price. Okay? There's 3 ways to determine price. And then price, remember, is not what it costs. The first way is to price on inputs being whatever it is you put into it. It's hourly. And then and this is okay. There's nothing wrong with this.
If you do this today, don't worry about it. It's fine. Because there are very successful companies that do hourly based pricing. I know a few myself, but the risk is put onto the client because if you spend a ton of hours working on something, they owe you a lot of money. So of course, they're gonna be watching how you spend your time like a hawk.
Yes. They might say, well, for that task, a, it should have only taken 40 hours by our estimate, but it took you 200. What happened? And so now you have to time track and you have to explain because the risk is on them. At some point, the clients get fed up. They're like, you know what? We don't wanna do hourly based pricing. We want you to price based on output. So we want you to build a working prototype and a minimum viable product, and it has the Deliverables. Deliverables.
Right? The output. So we want you to price it based on that. Now you, as the freelance or independent business owner, say so you say to yourself, well, there's a lot of ways this can go sideways. There can be scope creep on this thing. We got to cover our butt. So whatever we think it's gonna take, let's just say a 100 hours, we might pad this to 200 hours or a 180 or a 130. That's entirely up to you. It's because now you assume the risk. So if you estimate poorly, you will go out of business.
If you estimate really well and you run your ship really tightly, you can actually make a decent amount of profit. The last way you can do this is to price based on outcome, not output, but outcome. What is the outcome that they want? So this makes you to, makes you engage with the client in a very different way than you previously did. Prior to that, you might sit down and talk about scope, features and functions that you want to have in an app.
But now if you focus on outcome, well, what does this app do for your business? They might say, well, having this app will cut our customer service time down by half. And you say, well, what is that worth? They're like, well, we employ a 100 customer service reps. By cutting that down, you're going to save us $14,000,000 a year. Okay. So what is it worth to you then? What's a fair price now? Now we determine the value of saving you $14,000,000 a year. Would $1,400,000 seem reasonable to you?
That's only 10% of that cost. They're like, well, yeah, if you can literally save us this, and this is what we want to do, 1,400,000 seems very reasonable, because we will have a net gain of something like $12,600,000.
I see. So it's really all about asking the right questions as well. That's probably one of the most important parts.
Yes. You you're seeing a recurring theme here. Right? So it took me ten years. It didn't take me 10 years, but it took it took 10 years of coaching for me to learn all that I know about how to ask the right kinds of questions and how businesses actually conduct themselves so that I'm now thinking like a business person, not like a creative.
Right. No. That's awesome, man. I love it. Yeah.
It definitely has helped our business a lot. It's just the value based model at least I I I think, I mean, I I agree that the hourly, it can be good, but there's just so much paperwork that goes with it. And and looking at reviewing all the hours, and it's such a headache. I think it's it should be more based on deliverables, which is value because you're giving them something, so output and outcome as well. Asking the the right return on investment questions.
Right? What kind of return they're gonna be getting or or how is this gonna help their business and put putting that to a dollar value.
Yeah. Right? So let's examine for a minute motivations. Okay? If you base your pricing on hour, what do you care about?
What are your what are your functions? Well, I care about tracking the time and probably trying to get as high of a bill as possible because if you come up with an an amazing idea, the time that it took you to to come up with the idea, the billable hour could only be 15 minutes. So the way people get around this is they charge a very high hourly rate. A great example of this are attorneys. So attorneys can be anywhere between a couple $100 an hour to $1,000 an hour.
So the high profile attorneys rack up ginormous bills. They have associates, junior associates, clerks and assistants and all these kinds of things, so they can jam a lot of hours on you. They're the probably the most efficient group of people who understand how to bill hourly. But it's a drag because you're, you're gonna track how many copies you made on the photocopier. You're gonna track, every, every call in 15 minute increments.
So that's where your energy is. So your, your focus is really on where my time is going. Now the next one is based on output or deliverables. Right? So now what you're doing is you're just really focused on the thing that I make.
What does that look like? Does it function? So none of these 2 really address the bigger issues. Why does a client even want to spend money making this? So when you focus on outcome, now my focus is really tell me what your, your goal is, and then I will do everything in my power to help achieve that goal. I don't care about the time. I don't care about the deliverable. What I care about are the results.
Yeah. I see. No. I I I definitely can I definitely can see the value in in just asking those questions? I mean, when you're asking me that, I was thinking, yeah, I I could definitely see how how clients would find that valuable in the pitch in the meeting during the sales meetings.
You know? I think that's great. So, Chris, another pricing question is, you know, and I love your take on it. How do you respond to the lower budget clients? You know, we all have gone through the the ones that that they say that, you know, I don't know what my budget is or, you know, they will say that or they'll say something like, hey, it's it's this amount, but you know what's more. How do you kind of respond to that?
Right. So when people don't know their budget, it's one of 2 things. 1 is they're uninformed buyer. It means they have no idea what any of this stuff costs, and they have probably not allotted a lot of money to the the, to the initiative and effort that they're about to undertake. Or 2, they're playing a negotiation game with you because we've all been taught, whatever says the price first loses.
So they think if they say we have $20,000 to do this, then you start negotiating up. Well, I think we do it for 27. That's why they don't say anything because in their hope of hopes, right, they're thinking you're gonna say something way below 20,000. So they're thinking you're an inexperienced person. You walk into the door, a little wet behind the ear, and you say, well, I think we do this for $2,000.
Is that okay? And they're, yeah, let's do it. They saved themselves $18,000 But when you read enough about how bias works, right, there there is this this bias that when we hear one piece of information, it's part of heuristics heuristics. Right? First piece of information we hear seems to influence a lot more than we'd like to admit.
So in in this case, if you say the number first and you anchor really high, it's called the anchor bias, they're gonna get fixated with that number. Notice in the value based conversation that I just demoed with you, I said, well, how what's this gonna do? Well, we have a 100 customer service reps, and if we're able to chop their time in half, how much money will we save? They say $14,000,000 Okay. So that was the number that was dropped in your head.
So when I say $1,400,000, which is 4 a 10% of 14,000,000, that sounds like a really reasonable number against 14,000,000. But if you started out not saying anything and you just started out with, I think we should charge you $1,000,000 like get out of town. We're thinking it's a $130,000 initiative. Yeah. You see?
So it helps you to establish the number first and to anchor really high. According to Blair Enns, there is no penalty for anchoring too high. There's no penalty whatsoever. So when you talk to a client and you say, do you have a budget set? And they're gonna say no, almost always.
Like, 90% of the time, they're gonna just say no. We have no idea. Right? And you're gonna say, well, based on our very brief conversation, it's probably going to be somewhere north of $180,000 Do you have that kind of money to spend? So before they might be thinking in their mind 30,000, but now you just anchor it a 180,000 and it's a high number for them.
And they're sitting there thinking about it. It's like, I don't know, Michael. Maybe we have a 120 because they don't wanna be embarrassed. And you're thinking I would have settled for 80 in your mind. Just by saying the number and saying it high, you do a giant favor for yourself and for your business and your bottom line.
And there's definitely a potential with saying something too high, right, and losing them. Do you feel or not?
No? There isn't. I mean, they might laugh and say, oh my god. We don't There's no way. We have $400. You're like, you know what? You don't want that kind of client.
Yeah. Yeah. That's true. Yeah. And I even find giving them a range. If you say, oh, it's between 75 to 200000, they're obviously going to go for the bottom one. Right?
So just say that number in the reverse order. Say
I see. So we say How would you
change from 200,000 to maybe 75,000? You'll see what happens.
Yeah. Just reverse that. That's cool. I've I've never done that before. I know. It sounds weird
because we're used to saying the lower to the higher, but say Yes. The higher to the lower. Just get used to saying it over and over again.
I will. I'll definitely take that advice. I'm sure many people listening to this are gonna take that as well. That's great advice, Chris. And what what about the clients that you feel how do you respond to the clients that say that you're too expensive? Same thing? Same approach?
Okay. So if they say you're too expensive, say why do you say that? And what would they say?
Some will say, oh, well, you know, your competitors charged if we if we say 150, they'll say, oh, but we're getting quotes from your competitors that, you know, 50 to 70 75,000. You guys are more than twice twice higher.
So there's 2 approaches here. You can then respond, what do you think you're not getting at 50? What do you think we bring to the table at 75 more than those guys? And what would they say then? So let's pick 1 of the 2 paths. Let's say, what do you think you're not getting for the $50,000 budget?
Yeah. I see what you're saying. So so, really, you're trying to if if if I ask them that question, they would say, oh, well, I mean, they probably wouldn't know how to respond. That's right. Right.
Be empathetic. Okay. Imagine that you're the client. You've talked to clients now for over 8 years. So what would they say say to that?
They would most likely say, oh, well, you know, aside from the competition, they would say, well, I mean, you guys are really high, so we don't know if we can afford that. This is what we've gotten. We don't know if we can afford 200,000. Why do you go why do you why are you guys charging that high? And then we would say something like No.
No. No. I want you to to be the client right now, and I'm I'm gonna I've literally thrown the question back at you. Let's say I told you a 125 k. You're like, wow, that's really high, Chris, because the, your other competitor is asking for 50. And I'm gonna say back to you, what do you think you're not getting for 50? What's holding you back from going with the $50,000 vendor?
It would be hard to answer.
Well, try. Try your best to answer. You see what I'm doing to you right now?
Yeah. Yeah. No. No. I see.
I already know the answer, but I wanna know how well you know your customers.
It would prob I'll probably say that, well, the scope of work doesn't really fit that amount of money because we've gotten the answer before. They'll say, and then we'll say, well, how do you know that the scope of work doesn't fit that that that estimate?
I I don't. Let's just say that apples to apples, you gave us both the same scope of work and the document's coming back, but you see 2 totally different numbers. You see 1 at 50, and you see 1 at 125. If you believe, if you have confidence that the $50,000 option is the way to go, let's save us both a lot of time and energy and get off the phone right now. Work with them. See what happens.
Yeah. I see. Yeah. Because the thing is is, like, we'll we'll vet. I mean, my company will vet them and we'll part of the vetting process is is a budget question.
Right? So we'll throw because we know a lot of them are not gonna give us a number until they so what for I'll give you an example, Chris. So one we had one lead, you know, a few months ago that this happened, and they said this we said, well, what's your what's your budget? And they said, well, we don't we don't have one. So we said, okay.
And I I gave you the range. I said, well, it's, 75 to a 150,000. And they said, well, actually my budget is I really don't wanna spend more than 60,000. All of a sudden, they gave me a number, and I'm like in my head, I'm like, well, you said you didn't have a budget.
It always happens that way.
Always. Yeah. So really should have reversed it, and I'm curious to see what happens.
Yeah. Try to see what happens, and and you can even just say one number. Projects like this tend to be around a $125,000. Is that what you have to spend? And then what you will see them do is if that imagine a $60,000 you're gonna say, they'll probably bump it to 85 or 90.
It's human nature. You'll see what happens. Okay? We're just drawn towards the first piece of information that we hear. Now let's get back to the conversation here because you had asked me, how do you respond to you're too expensive?
I just told you, but for some reason, you're not willing to engage with me on that one. Because typically what happens is when you say back to the client, there's only a few options I could say, like, why don't what do you think you're missing out on by going with a $50,000 vendor? This plays into their fears. We know this. Okay?
So when you go to get, like a shampoo or soap or toothpaste, and there's one for like 25¢ and every other one is $4, What do you think is wrong with the 25¢ one? We know it's old. It's outdated. There must be something. There's a recall.
It's not as effective. So they get an opportunity to convince themselves that that's a bad option. All I did was create the question and give them space to figure it out. Now should they say, we love that option, they're lying to themselves? Because when you hear a great deal and you have a great vibe going on with a company and they're giving you a price that you can afford, why do you keep talking to people? You're insane.
That's true. Right? It's a way it's a waste of time. Some of them aren't a good fit for you.
And let let me put in a very excuse me. Let me put in very practical terms for you. Okay?
I'm
losing my voice here. Is there are people who submit their demo reel to us for review. I see 2 minutes of it. I'm like, hire them. I don't need to see the rest because I know what I want.
So when they say, we have another person who's willing to do it for a third of your price, That's a bargaining tool. That's a negotiation ploy, pure and simple. They want the quality of the work that you're doing, the vibe that you put out, your reputation. They just want it at the other price. And it's because they're better negotiators than you that they use this trick and you fall for it.
Because if they
got what they wanted, they would have just hung up the phone already.
Yeah. True. And they even they'll even do it, in, you know, in the office as well when they come in and and meet with us. And what what what we've done in the past to win some of the big business, my experience is that that same thing has happened, and then we'll come in with confidence like you mentioned before. And we'll tell them the actual value.
We'll say, well, this is what you're gonna get. You're gonna get this, this, this, this, this, this, and they're all of a sudden saying, okay. I see. There's security involved. We have a security aspect of our business. Have has anyone else, you know, added that value? Oh, okay. It's custom designs, not template. Right. Right. But you're you're I see. I see.
You're doing something that most creative people do. You start to justify your value, and that's the mistake. Do do not do that. I want them to tell me why because you saying it's just a pitch. You're just selling them. They're like, oh, yeah. Here comes the pitch. I could see it coming. They're gonna drop 25 things that they do better than everybody else, but I don't believe it. But just simply asking them, what do you think is the difference between a $50,000 option and a 100?
They're like, well, you're more qualified. You do all this extra work and I see that your, your track record is sparkling. Instead of you saying it, they say it. This is why I say this on the show. When when you say it, you're selling, and when they say it, you're closing, so stop selling. Almost every question that is thrown at you respond with another question.
I see. So you're kind of putting the weight on them to answer for you.
Yeah. Because I wanna know what they believe, and then I'm gonna ask them more questions. Now have you ever gone to therapy, Michael?
No. I haven't.
You need to purely out of research. I want you to go and find yourself a good family therapist or a cognitive behavioral therapist, some, something like that. Okay. It's about $100 an hour. Some are less, some are a little bit more, but it's usually about $100 an hour.
It'll be the best teacher that you can have as a business owner Because what happens is when you go to see a therapist, watch how they diagnose the problem, watch how they navigate a very complex minefield called your head. How do they get you to agree to do things that you didn't agree to prior to them even asking the question? Watch how much you do talking versus them doing the talking. Watch how many questions they ask you versus how many things they tell you to do. You will see.
And once you realize that, you'll realize you've been doing it all wrong.
I actually, I've had some friends that, some business some friends in business that have, talked to therapists, not because there was something wrong with them, but just to get it out of experience, and they said it was very beneficial. So maybe I'll try that.
Yeah. I think there's a misconception that by asking for help, we must be broken. If you go and and ask help for a tennis coach, it's to improve your game. If you're a chess champion and you want coaching, it's to improve your game. Nothing wrong with you.
It's just to improve your game. They can spot little tweaks and adjustments that you can make to improve your game. And there is a negative stigma to therapy because I must be mentally unstable. I must have emotional issues, mommy issues, daddy issues. It's not that at all. You want clarity on your thinking. To resist it is insane.
No. It makes complete sense. It definitely makes sense. And I think a lot of people can learn from that as well. It's great advice, Chris. Appreciate that. So, Chris, you know, last three questions, you know, close close out the episode is how do you so I always ask this for every interviewee. I call it the three how's. So how do you overcome obstacles? How do you create value? And how do you define success? So first one's how do you overcome obstacles?
What you need to do is understand the obstacle. An obstacle usually is something that's a reflection of you and your belief system. Right? And it usually boils down to fear. You're afraid of something.
So if your obstacle is I'm, I'm unwilling to, to call 10 clients on a cold call this week, it's because you're afraid of them saying no. You're afraid of sounding stupid. Once you're able to address it, you can overcome your fear. So ask yourself some questions like what's holding you back from doing this? And then try to identify why you're you're not doing it. Okay. What's the next question?
And how do you create value?
You create value by sir providing a service to other people in a generous manner where you take yourself out of the equation and you really sit there and think, how can I become an advocate for this person's business? I'm in it for them and not for me. I'm in it for them and not for me.
Kind of like this, selfless approach.
100%. If you read this as marketing, Seth Godin says, marketing is the generous act of helping others achieve their goals, period.
Love it. Love it. And last question is, how do you define success?
Success is when you realize all of who you are, all your strengths, your skills, your passion, your your interests, and also the parts that you don't like about yourself, and you become completely happy with both.
Perfect, man. Yeah. It's a great way to close it out. I really appreciate it, Chris. And, and where can everyone find you, Chris? Website, social media?
Yeah. You can find us on YouTube, and that's where our biggest, content dump is. We have over 800 videos. You can find us at the future is here, and the future spelled without an e. Just remember to drop the ego, and that's how you can spell the future. And you can also find me on social media, Twitter, Instagram, and everywhere else at thechris, c h r I s, do, d o, at thechrisdoe.
Awesome, man. Chris, it's been an honor and and really humbled to to have you on the show and sharing your story and insight, with us. And I'm I'm very thankful, man. Really, really appreciate your time.
Thank you very much, Michael. I had a blast.
Awesome, man. Cool. Well, again, thanks everyone for listening. And this is your host, Michael Georgio, on Tales From the Pros. And until next time. Thanks, guys.