Money, money, money (Part 1)
It's the thing no one wants to talk about, but will make the difference between success and failure for your business... money! This is the first part of the two part finale of season 1. We will focus on what you should charge your clients, how to set your prices, and getting over the things holding you back from getting what you deserve!
AUDIO VERSION
This version is different than the video version.
TRANSCRIPT
Samantha Morgan: Hello, hello, hello.
Jenn Ocken: Hey.
Samantha Morgan: We are here today. Me, Samantha Morgan. You, Jenn with two N's Ocken, here today for the last two episodes of season one.
Jenn Ocken: That's so amazing.
Samantha Morgan: Can you believe that?
Jenn Ocken: I can't. Now I can, because we're sitting right here.
Samantha Morgan: I know, exactly. Because we did it.
Jenn Ocken: We did it. We're here.
Samantha Morgan: I am the producer, slash...
Jenn Ocken: Wonder Woman. And I'm going to tell you, she has been a Wonder Woman for me the last couple of weeks.
Samantha Morgan: So, Miss Ocken, I have a very big question for you to start off these last two episodes. I think we need to make it a two-parter and it's going to be all about money, money, money, money.
Jenn Ocken: Money, money, money, money. I love money.
Samantha Morgan: The scariest thing for me has always been money. I don't get it. I don't understand it. It makes no sense to me. And I have always had a really hard time figuring out what to charge people. And I know I am not alone.
Jenn Ocken: Yes.
Samantha Morgan: This is something I have worked extensively, and I, as you well know, I'm still fallback and have to work through hiccups and things.
Jenn Ocken: For years, past generations have just put a value, created a value on money that is a control, scarcity, fear factor. So this is generational. Yes, you're right when you say you're not alone. In fact, I'm there with you at times. It's huge.
Samantha Morgan: So, how do you start to begin getting past these hurdles? How do you begin setting your pricing? And then also, when do you get to that point when you know need to go up on your pricing?
Jenn Ocken: Okay. Wow. That's a lot of questions.
Samantha Morgan: I know.
Jenn Ocken: So if I don't get to all of them, you keep reminding me what they are. Because that's a lot of-
Samantha Morgan: It's a two-parter, I told you, it's a two-parter.
Jenn Ocken: It's a two-parter. It's a two-parter. And there's actually even way more layers that are going through my head at the moment about money as well. So the first thing that I want anybody and everybody to know about me is that... And it took me a minute to get here, a long while to get here in my career, is my philosophy behind money. Money, to me, is love. It really is. So when I'm paying for something, I make sure that I love it, that I want it. It's got to kind of hit my core values, and that took me a minute to bring that into... I actually understood the exchange of services for money was love, an exchange of love. People love me, love what I do. They like what I can provide for them. And so the only thing that they can give back to me is money. So then it became an exchange of affection and relationship. Not the relationship with money, because that's a whole different beast. It's the relationship with the person that you are having. That's why relationships are really important to me with my clients, because if I have a good relationship with them, I don't have a problem asking them for money because I know that's how they tell me they love me. In fact, I get tipped, so it's on top of it sometimes. And that's an even more space of gratitude. The other thing is when I'm-
Samantha Morgan: Clients, if you're listening, I would like a tip as well. Go on.
Jenn Ocken: Well, and tip was made because it's to ensure proper service.
Samantha Morgan: Yes, it is.
Jenn Ocken: So that's a whole nother beast, too. Cheese balls, man. We could go on. This could be a whole season.
Samantha Morgan: Welcome to season 49 of ThrivTalk. We're still talking about money because it's that complicated.
Jenn Ocken: You have to simplify it. Simplify each layer of it and understand that within the idea of exchanging money for goods and services and crafts, when you wheel and deal, when you get something for cheap, in turn, you are not getting as good of a product. Even with somebody like me who has a lot of value put on my services, when somebody tries to get a discount or wheels and deals me, my energy level falls. My desire to be there, my passion, it lowers my energy.
Samantha Morgan: The thing you're paying for.
Jenn Ocken: And that's what they're paying for. That's the energy of love and affection and relationship that I'm trying to talk about. It goes both ways. And when I have raised my prices and somebody does not even balk at what I'm charging, my energy level raises, my excitement, my gratitude for them. Almost always in a service industry, a creative industry. And you're not only paying for the time and effort, you're paying for all the experience: the years it took them to learn their craft, the continuing education. I mean, we were just talking about that the other day.
Samantha Morgan: I know. I'm making that face because I'm like, I was just saying the other day that I-
Jenn Ocken: You're evolving your craft.
Samantha Morgan: I totally quoted Jenn. I'm sitting there listening to an industry podcast. It's a podcast about podcasting, because that's a fascinating topic. And I said, "See, this isn't being billed to anybody right now. It's only happening right now because I want to stay on top of this because of my passion."
Jenn Ocken: And it brings value to your craft.
Samantha Morgan: It does. It does.
Jenn Ocken: And people don't see that. And they need to be educated about that. And the people that need to hear that might not be listening. It's all an education process. What you charge and why you charge is a communication and education between you and the client.
Samantha Morgan: So how do I figure out what I need to be charging? How do I set my price point?
Jenn Ocken: Organize and understand everything that you need to pay for to stay sustainable. And that includes not only the supplies, the equipment you use for each job, but also, do you have an office? Do you have programs or applications that you have to pay for monthly or weekly because of your craft?
Samantha Morgan: Got lots of those.
Jenn Ocken: Right. That is your base. How do you figure how much electricity you should charge per client in that? Or internet. Just pick a number. Just say, "You know what? It costs me $500 a month in overhead. I need two clients to cover that overhead." So that would probably be, in my mind, if you did 10 clients, that's 25%. So 25% of 500 needs to start off. So there's that kind of formula that you could do. Whether you pick an arbitrary number or you formulate it out that deeply, pick a number and add it to it. Add it to the cost of doing business. You figure out what your costs are monthly and then per job.
Samantha Morgan: No, that makes a lot of sense.
Jenn Ocken: So that's the beginning. That's the base. Then you've got your time.
Samantha Morgan: That's the part where a lot of people get hung up.
Jenn Ocken: What is your value? For me, I want to live where I live. I want a more comfortable car. For so long-
Samantha Morgan: Well, because you're in it for so much.
Jenn Ocken: I'm in it for so much. It's valuable to me. It's what I want.
Samantha Morgan: Not important to me, though.
Jenn Ocken: Right. But I can't worry about people seeing me drive down the street, saying, "Man, what is Jenn doing driving a luxury car?" That's where we get hung up. And that's where if you really want to get down into the layers, we're worried about people judging us that we're spending that money so that we can live in luxury. Damn right.
Samantha Morgan: Otherwise, why are you doing it?
Jenn Ocken: Because I'm happy. If I'm happy, my passion is there. If I'm comfortable, if I'm feeling good about what I'm receiving and able to live my life very comfortable, it's going to affect the way that I provide services and things like that. It's just the way it is. Rich people get it. They get it. They understand it and it makes them happy. And when they're happy in life, their services, their crafts, their talents, their product is going to reflect that. Also, another part of the quality of life is spending time with my friends. So I don't want to be working all the time because I want to have energy to hang out with my girlfriends, to hang out with the people I love, to enjoy that. So it's not all about luxury cars and houses and stuff. It's also about I want to have time and energy. And if I undercut myself, I'm going to be working a lot, I'm going to be disgruntled, and then I'm just going to be pissed off and I'm going to be a complainer.
Samantha Morgan: Right.
Jenn Ocken: And the quality of time with my friends is not going to be. So there's like so many crazy levels that people don't even consider. And I've spent a lot of time thinking about it because I needed to move through from a space of relying on other people to show me my value and my worth to holding the boundary of, this is my value and worth. Because when I am getting paid this money, I am just a way better person to be around. And it seems odd to say that, but I hope I explained it well enough.
Samantha Morgan: Yeah, no, I think so.
Jenn Ocken: So I'm just giving you the psychological thing behind it.
Samantha Morgan: Right.
Jenn Ocken: So basically, let's also say, okay, I need $500 a month to pay for my overhead. So at least I need people to pay me, let's say it's 50 bucks per assignment for overhead if you did 10 a month. So double that.
Samantha Morgan: Okay.
Jenn Ocken: 50 bucks. So double that. Just in case you don't get 10.
Samantha Morgan: Right. You got to have a pad.
Jenn Ocken: Right. Have a pad. So now you're at a hundred bucks for your time. And then you take into consideration how much time do you have to put into a job? Do not pay yourself less than minimum wage. But I would say don't pay yourself less than $50 an hour. I say that, but then you also have to take into consideration industry standards.
Samantha Morgan: I was going to ask that, is how much do you have to be conscious of what other people charge, and how much of your time should be spent researching... Who should I be looking at? Should I be looking at the top person?
Jenn Ocken: No. You should be looking at where your level is at that moment in time.
Samantha Morgan: Okay. All right. Okay.
Jenn Ocken: Don't be looking at people that are younger and only have a year experience if you have 10 years experience. And don't be looking at the people that have 20 years experience when you only have five years experience.
Samantha Morgan: Gotcha.
Jenn Ocken: Also, so it's a good example is when I moved to Baton Rouge in 2007, I did market research and I realized when I looked at the people that were my peers in the industry, I looked at their pricing mostly so I wouldn't bottom feed them. I didn't want to undercut them.
Samantha Morgan: Okay. Explain that.
Jenn Ocken: If I came in and charged less than people that were my direct competitors, I'm lowering the industry standard for that quality of work.
Samantha Morgan: Okay. See, I think most people would think that that's the way to do it.
Jenn Ocken: No. Gaining relationships and creating referrals, which is something we're going to talk about in the next one.
Samantha Morgan: Okay. That's why this is a two-parter.
Jenn Ocken: Yes. Which is really where that's leading.
Samantha Morgan: Okay, gotcha.
Jenn Ocken: Creating relationships with your clients is how you're going to get more clients. Undercutting somebody so that you can get their clients or get clients is just lowering the industry standard and is not beneficial to any of us, including yourself. And I actually had a photographer, we went to a networking event. And we were different styles, but we had the same kind of economic client base, they were all kind of making the same amount of money and paying the same amount for the photography services. And he straight up asked me how much I was charging. And he said, "Thank you that you're charging that much and you're not bottom feeding us." He got it. And it was very affirming to me. It really solidified that my instinct to not bottom feed. And I try to teach my interns that when they were first coming out of college. It's like, "You have to charge something. You can't do stuff for free."
Samantha Morgan: Yes.
Jenn Ocken: Also you have to decide what kind of pricing structure are you going to have, because they're all doing something way different than what I'm doing as far as a pricing structure. Jess and I were just talking about this. I was like, "I don't understand how they're still in business." And she's like, "Well, Jenn, they don't have the overhead that you have." I have Jess that comes into the office. I had for 13 years an office space, and I'm in transition. Not that I won't have an office space again. I've decided to move on and expand my creative endeavors and go into this podcast, and going into a speaking platform.
Samantha Morgan: And I ain't cheap.
Jenn Ocken: No. And I love it.
Samantha Morgan: Thanks.
Jenn Ocken: I love it. So there's a lot of things, and I can't say what the exact time is. But what I can do, I can work with people and we can go through all of these questions that we touched on and ask. We can take your numbers, put them on paper. I can ask the right questions and we can get a pretty solid starting point. And we'll take into consideration what's that number that's going to roll off your tongue easy. Because stuttering, let's talk about that one in the next.
Samantha Morgan: Okay.
Jenn Ocken: When actually the number comes out.
Samantha Morgan: That's so funny because I remember very clearly the first time I heard you say your number to somebody, and I was like, "She just said it. She's so like, 'My amount is this.'" And there was no stutter. There was no stammer. And I guess, again, the person who's never understood money and has always been a "So, my, yeah, it's..." And then always backs it up with, "And it's because," that defensive posture of "Here's what I charge." And it was really cool watching you do that, by the way.
Jenn Ocken: Thank you.
Samantha Morgan: Never told you that.
Jenn Ocken: Yeah, no, you haven't. If we were going to sum up this podcast, because we're about at time, right?
Samantha Morgan: Yeah. We're getting there.
Jenn Ocken: Because I-
Samantha Morgan: We're long past time, honestly.
Jenn Ocken: The big component that I'd love people to take away from this episode is that to think of money as energy, don't even hate, you don't even have to think about it. It's love, it's energy. And it's something that people give you because they have nothing else to give you, and because they need and want what you have to offer.
Samantha Morgan: That's good. All right. Well, one more conversation about money in the next episode.
Jenn Ocken: The last one.
Samantha Morgan: The last one.
Jenn Ocken: Of our eight-episode season.
Samantha Morgan: Of season one. We're coming back.
Jenn Ocken: Oh, two. Yeah.
Samantha Morgan: So just be careful. All right, Miss Jenn, two N's. Until next time.
Jenn Ocken: Man, I love my life. Sheez, I love my life. I'm serious.
Samantha Morgan: She really does.
Jenn Ocken: I'm serious about also... Well, no, I'm not going to say it.
Samantha Morgan: No, don't say it out loud. Yeah. All right, we'll hold that for later. All right. Well, until next time, we'll see you doing stuff and things.
Jenn Ocken: Yeah, right? Call us if you need us.
