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  • Cognition #36: Threshold Pricing

Cognition #36: Threshold Pricing

Micro Essay on how you can work less and earn more

Ideally, we all want to work as little as possible and earn significantly more in exchange for the hours we invest.

If you are an early-stage freelancer, the hack I am about to suggest might not be the best advice. But if you already have a clientele (minimum two clients) in the range of $x-y, Threshold Pricing is exactly what you need to scale your freelance biz.

Threshold pricing means you only onboard clients who offer fees equal to or greater than your threshold amount.

Let’s assume you already have clients who pay you $300-350 per month.

This implies most businesses are happy to pay you at least $300 for similar services.

The mistake we usually make is we try to onboard more clients, but in reality, our goal is the opposite (read the first line again.)

Threshold Pricing protects you against Client Overload.

Since you know businesses are happy to offer you at least $300, you can now set your threshold pricing at $350.

This is what Threshold Pricing sounds like:

I won’t work with any business offering me less than $300, even if the work scope is less.

Meaning: If you get a lead who pays you $150 but is justified with the work scope or the number of hours, you still don’t onboard them.

Here’s why.

While it seems okay to onboard such clients, the drawback is you won’t be able to accommodate high-paying clients. Your weekly working hours are limited, and you don’t want low-paying gigs eating them up.

It’s not an ideal solution if you don’t have stable retainer clients or are a beginner—as you don’t have the freedom and flexibility to throw a lot of Nos.

But if the story is otherwise, you might want to give Threshold Pricing a try.

On a lighter note:

We don’t have a non-technical segment today as I am on a workation and don’t have many hours to write long issues.

But I couldn’t resist myself from sharing value with you. Hence, the micro essay.

btwww, this is what I’ve been up to 👇

I am in Mulki, Karnataka at a Surfing School to learn the obvious :p

It’s a 5-day course; I finished with Day 1 today. Ngl, surfing is fun!

If you are in or around Mangalore:

Mangalore is at max 60 minutes away from Mulki. I am here till 12th October. If you’re in or around Mangalore during this time, reply to this email. We can meet for lunch or dinner.

Have a great weekend!!

Love and hugs,