When Avram started his business a couple of years ago, he gave his time and expertise away for free to anyone interested.He recalls facing criticism when he first started charging fees for his time, encountering pushback from companies and business owners. In this episode of the Babies and Business Podcast, Avram and Rachel share how they transitioned from giving services for free to implementing pricing strategies that saved time, filtered clients, and improved their business. From navigating early struggles to finding the courage to charge fees, they reveal four key phases that helped them create a sustainable and profitable business.

Show Notes:

Key Highlights from this Episode:

• Avram’s early days of not charging for his time and what it taught him.
• Rachel’s insights on using pricing as a way to filter quality clients.
• How their pricing strategy evolved through four phases for Digital Harvest.
• Lessons from introducing friction into the process with pre-screening forms.
• Why charging for services increased their close rate and profitability.
• Why charging even a small fee improves client follow-through and engagement.
• The surprising feedback that inspired Avram and Rachel to reevaluate and raise their audit pricing.
• Avram’s experience with webinars, where charging a fee resulted in higher engagement and conversions.
• How pricing helped Avram and Rachel find their sweet spot in the Albuquerque market by focusing on ideal clients.
• The mindset shift required to overcome fear or hesitation in raising prices.

Mentions & Resources:

Digital Harvest – Avram and Rachel’s advertising agency

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Episode Transcription

Avram Gonzales: When I first started my business, I gave all of my time away for free. That was about eight years ago.

Rachel Gonzales: And that was in hopes that it would translate into business.

Avram Gonzales: Yes. And things have changed to such a point where I do charge money for my time. And we felt like this would be a good podcast to publish and talk about because every entrepreneur is on a similar journey going from zero to building something great.

And along the way you have to make many decisions about what you will do for free versus what you’ll charge for and even how much you will charge for those things.

Rachel Gonzales: And it really does depend on the industry that you’re in. Ours can be very much a knowledge kind of thing. We’re going to help educate our clients, help them understand the value of what we do and then bring them in and they’re going to pay us to really get them these great results. And sometimes that takes some education and some getting past the fear of getting burnt previously by their previous providers.

So that’s our industry, but yours might be a little bit different, but I think that there’s a message here that everybody can get something from.

Avram Gonzales: And we’re going to kill a sacred cow today. And I think that one is, you know, people have said a lot that you should give away your time and your expertise for free. And I agree with that to an extent.

And I think that what we share today will help give context to why I feel that way and I feel different than some of the stuff that’s being shared now.

Um, I’ve come full circle, full circle all the way around and I don’t think we’re going back.

So like Rachel said, it depends on your industry and this is where you have an opportunity listening to this. You might decide to start turning things on its head based off of what we’re doing because we’re also doing something that I think the majority of folks in our industry are not doing.

Rachel Gonzales: Yeah. Correct. Well, a lot of the people that we have spoken to are a little bit shocked

by the fact that we charge. They’re like, wait, I can get this for free. Well, yes, you can. But can you really, can you actually get what we offer you for this paid fee, for free? Probably not because they really don’t know what it is, but they are misinformed and they have dealt with maybe, lower level practitioners in our field.

Avram Gonzales: That’s right. So we’re going to take you through four different phases that we’ve experienced at our business, Digital Harvest. The first, in what changed in, you know, there’s half of this is where we were giving stuff away for free the other half is charging and charging different amounts. We’re going to walk through all of this.

The first part, Rachel wasn’t actually here for, she wasn’t a part of my life yet. And that was when I started Digital Harvest. It was under a different name. I was living in Boulder, Colorado. And when I started the business of providing search engine optimization services to small businesses, what I did was gave everybody my time for free.

I was super hungry to grow the business because it was starting from zero. Anybody who was mildly interested in our services and what we have to offer. I had to do some kind of an audit, a review

Rachel Gonzales: Sure.

Avram Gonzales: in order, for them to both see that I was credible and I knew what I was talking about, build that trust, and then know that there was a plan in place to help them get to where they wanted to go.

And that was the function of the audit as part of the sales process. And so what I didn’t know when I first started doing this was how much time would go into those. I would spend about two to three hours on them. And then on the other side of it, I would sit down, have a conversation with the business owner, and about one out of five of those would close,

Rachel Gonzales: Yeah,

Avram Gonzales: Which is pretty low.

So when you’re spending 10 to 15 hours to get the business and then you get one of them, you know, it’s pretty rough.

Rachel Gonzales: Yeah, absolutely. Depending on your price point too. You know, that’s a lot of, like if you think about just the cost of acquisition in that sense, it’s actually pretty high and probably not even breakeven at that point. So that has to be considered

Avram Gonzales: All I had at the time was like sweat equity to put in, right? And so when it came to delivering the work, you know, this is where things started to change. So when it was just me and a virtual assistant, I could do all the sales and I could do a lot of the fulfillment with me and the virtual assistant, but at a certain point it was like, well, now I’m having to choose between

Rachel Gonzales: Right.

Avram Gonzales: working on the sales or working in the business.

Both are actually in the business. And it’s like, well, I don’t really have all of this time to do all these free au
dits.

But what else am I supposed to do? This is kind of the industry standard. But I did make an adjustment. And that’s where our second phase began. And so I did all this free stuff for like the first two years.

I also learned a lot about the business at that time. So it was good that I had so many opportunities to run these audits, do them different ways and learn a great process that people liked.

Rachel Gonzales: Yeah.

Avram Gonzales: But then what changed? It’s like, well, I wasn’t comfortable yet. charging for my time. So what I did is I put some friction, I put a little bit of a hurdle in the way of somebody getting my free audit.

So I created this questionnaire that would take people at least 20 to 30 minutes to fill out

and own about their

Rachel Gonzales: things so that you could come in educated.

Avram Gonzales: And more than just like, Oh, I talked to you on the phone and you were interested. I made them go put in some additional effort. So I pre screened them on the phone and then I said, well, I can do this audit for you.

This will help us figure out this and this, but I’m going to need some more information and so will my team. Fill this out. It should take you 20 to 30 minutes. My friends, I cannot tell you how many people never went to go fill the thing out.

Okay? And then when I would bug people and follow up with them and say, Hey, did you fill it out?

Guess what I would get back. I would get back really short answers, and then guess where the sale went? Nowhere. They weren’t that interested.

Rachel Gonzales: Well, what that did for you was it made it so you weren’t spending the time so you could actually, screen them, like literally screen them from the process of you doing that audit for them prior to actually putting in that time. The only time that you then were spending was the phone call, maybe the reminders, and then that was it.

Avram Gonzales: Well, I found out that I had stopped doing the reminders because if I had to remind them to go fill the thing out, they weren’t that interested in having the work done.

So, some could look at this and be like, well, that’s a broken process. And I would say, well, I just didn’t have the time and the bandwidth to do all of them and filter them a different way.

This was the filter method that I chose to protect my time.

Rachel Gonzales: Sure. And what did you find was your close rate on those

Avram Gonzales: Well, the close rate did go up. So, instead of closing 1 out of 5, I was closing more like 2 out of 5.

So, it doubled. And that was a, huge win, and I could

Rachel Gonzales: And less time.

Avram Gonzales: way less time, I could tell based off the answers that came through, basically the more that people wrote in that questionnaire, the more invested they were.

Rachel Gonzales: Mmm.

Avram Gonzales: So I learned really quickly when they came through and they had really deeply thought out answers. Those were the most likely to close on the other side of the audit. So long as I found things that were worthwhile and decided like, this is the best way for you to grow

Rachel Gonzales: Yeah, if this was the best, if you recommended that they work with you, then most likely they would at that point. Yeah.

Avram Gonzales: Yeah, because it happens. Sometimes somebody comes to the process and it’s like, well, actually this isn’t the best fit and you get some other recommendations. So it saved me a ton of time. We rolled with it that way for about three years and this overlaps into when Rachel and I finally met.

Rachel Gonzales: Yeah.

Avram Gonzales: So when Rachel and I met, uh, I had been doing this already for like four years as the agency.

And then Rachel came into the business and it was soon after that that we started charging for that audit.

And the reason that we charged for the audit was time.

Rachel Gonzales: Absolutely.

Well, it’s also another way of filtering. You know, some people value their money more than they do their time. Some people are like, Oh, if this is free and all I have to do is fill out this form, then I’m gonna go for it. So it did filter out different kinds of people. People that were willing to pay versus people that weren’t.

People that were

Avram Gonzales: tire kickers.

Rachel Gonzales: yeah, exactly that we’re just looking for something free that they were kind of interested but not really there

Avram Gonzales: I mean, there were a lot of people that were happy to get an audit just to find out the price.

Rachel Gonzales: Yes, exactly.

Avram Gonzales: And in our business, at least at the time, everything was custom priced.

So, I had to do the audit to find out what we were going to price it at.

Rachel Gonzales: right because some people need this as opposed to that or you know It was kind of a try to work with their budget at that point We were kind of looking at lower level pricing so that we could do something for them and then maybe graduate them into a different service. You know, there’s all sorts of different models that you can use

Avram Gonzales: that’s right.

Rachel Gonzales: when trying to convert people.

Avram Gonzales: yeah, and we just, um, chose to put a price tag on something. I, I learned a long time ago when I was doing webinars and things in the affiliate marketing and like internet marketing world, that even if I charged, I remember charging 8 dollars for a, it was like a two or four hour workshop that I was doing.

Normally I gave it away for free. I remember giving it away for free. It had like over 200 attendees. The time that I charged 8 dollars for it, I had 60 something people show up and I converted over half of those people

into a 500 plus paid program.

What was my conversion on the 200 something people that came for free?

Way less than that. You know, I had half of the eventual registrations. So it was like, well, I’m going to make money on this initial webinar. People are going to show up. They’re going to pay attention the whole time.

And then when they see that there’s an offer, uh, they’re going to go for it. And so I saw that play out multiple times in that world and I thought, well, let’s apply it to this.

Surely if somebody pays for it, there’ll be a higher caliber person that is more interested. And the answer was absolutely,

Rachel Gonzales: Yeah.

Avram Gonzales: absolutely. So using that process, I just charged 200 bucks for the audit. Again, it would take two to three hours to do those things. So I got some money back in my time if they didn’t convert.

Rachel Gonzales: Right.

Avram Gonzales: Right, but the close rate jumped again, so went from closing like 40 percent of people to easily two thirds 66, 70 percent something like that and I can’t tell you the number of people that when I told them yeah It’s a 200 dollar thing suddenly they’re not interested in moving forward with it because they thought it was gonna be free

Rachel Gonzales: Sure. Yeah.

Avram Gonzales: These days, it’s kind of cool when we do, when we tell somebody it’s a paid audit, we already know, and they already know, that there are three differen
t tiered packages that they could go into. So you let them know, that’s what you’re looking at on the other

side.

Rachel Gonzales: How does that sound to you

Avram Gonzales: How does that sound to you? Oh, well, yeah, like, that’s within my budget.

Okay, so we’re gonna do this audit.

Rachel Gonzales: Mm hmm,

Avram Gonzales: Then we’re going to work together to figure out which bucket is the best one for you. All of these will work, but some will help meet your goals faster,

Rachel Gonzales: correct. Okay.

Avram Gonzales: Right? So, so we cleared the deck with that. And, um, you know, I was still talking to people to figure out if they were even a remote fit for what we’re doing before I charge them money, you know, or they come and they talk to me, like somebody called us this, this last week, and they have this whole e commerce thing they want to do, but we don’t do e commerce.

Rachel Gonzales: yeah, It’s not efficient

Avram Gonzales: It’s not

Rachel Gonzales: with what we do, you know, it’s not

Avram Gonzales: Not a fit. So I was like, well, you know, what would be a good fit for you? This person or this agency, right? And you find that out before you start charging money. So that worked great for a long time until we got some earth shattering news in February. I made it dramatic because it was dramatic time for us.

Rachel Gonzales: Well, we have this client that we did this audit for them we charged them 200 dollars and she was blown away that it was 200 dollars and she said, I would have paid a significant amount more for this information.

Avram Gonzales: Yes. The, the number she used was a thousand dollars.

Rachel Gonzales: Yeah.

Avram Gonzales: And so I’ll tell you what went through my head hearing that. A couple things. Number one was, how could I charge a thousand? I hear you.

And how could I charge 1, 000 dollars for this because it just felt so second nature to me, right? Then the second thought that occurred to me after that was, what would I have to put in this audit for me to feel really good about charging a thousand dollars?

Rachel Gonzales: Sure.

Avram Gonzales: And so we actually went back to the drawing board and reorganized how we do these things and what goes into them.

We souped them up quite a bit to include what is essentially the first month of their service in regards to the planning and execution of a campaign.

We put that into the audit.

Rachel Gonzales: And it was also very visual. There were, there was a presentation that went along with this very much so that you don’t have to be a professional when looking at what comes out of this audit to understand that it is going to significantly impact what you could get on the back end.

Avram Gonzales: The other realization that came with those two thoughts was This is a different type of business owner that’s talking to us, that’s playing at a different level. Because around the same time that this business owner gave us this feedback, Okay, this is somebody running a multi million dollar business, okay, So when she looked at it, she’s like, 200.

I’m going to take this to the bank and this is going to be an insane return.

Right? They look at the money and look at what they can do with that. And it’s like, well, this is obvious. Even if it was a thousand dollars, this is a huge return. There’s so much moving in her business.

That applying just some of these small changes make a huge difference. I got feedback from somebody else the same week,

Rachel Gonzales: Yeah.

Avram Gonzales: same style of audit for their business. It was like a home remodeling business or something. This is a one man show.

It’s very much a startup business. Okay. His response was so different. It was, you didn’t tell me anything. I didn’t know.

Rachel Gonzales: Yeah.

Avram Gonzales: I was like, wow. So why does everything look like this?

First of all, if you’re so smart,

Right.

But then I realized he didn’t see the value because of where he’s standing.

Rachel Gonzales: Correct.

Avram Gonzales: It’s the same exact deliverable, but it was two different people.

Rachel Gonzales: Correct.

Avram Gonzales: So in the discussion of these four different phases, the one thing that we didn’t really point out until now is that the way we structured it caters to a different type of business owner.

Rachel Gonzales: Well, and we were, we were testing it out because we knew that we wanted to appeal to a really, really great business here locally in the Albuquerque, New Mexico market. And we wanted to. We wanted them to see that coming out of this audit should they elect to do an audit with us That we could truly make an impact in their business and it would be tangible for them. They would have an ROI because of the things that we could do for them.

Avram Gonzales: And because of where they’re standing and what their needs are, charging money fits in alignment with the heavy lifting that they know is necessary.

Rachel Gonzales: Yeah.

Avram Gonzales: And their mindset was like, I’m buying this and we’re moving.

We’re, we’re doing, we’re taking the plan and we’re going to enact it with you.

Rachel Gonzales: Yep.

Avram Gonzales: So let’s roll. A thousand dollars is not something that most business owners will part with without thinking about it.

Rachel Gonzales: Oh, yeah, absolutely

Avram Gonzales: Versus the 200 dollars. I had somebody else over the last few years that I charged 200 dollars for. And I think the reason they said yes was out of pride

more than the reality of them wanting to go through because they already knew the pricing on the other side and that was like their big thing.

Rachel Gonzales: right

Avram Gonzales: And so it was pride that made them say yes to 200 bucks.

Rachel Gonzales: cuz like really I’m a chump if I don’t pay for this

Avram Gonzales: if I don’t pay for this, right? But if it was a thousand, I guarantee you, I wouldn’t have sat with that business owner.

Because that would have been too much for just pride to take the bill,

Rachel Gonzales: sure

Avram Gonzales: right? So I think what we’ve learned over the years and adjusting our pricing and deciding what we give away for free versus what we don’t, it’s really a strategic decision about who it is we’re wanting to attract.

These really high caliber people are willing to, and it makes sense for them to spend some money with an expert consultant.

Rachel Gonzales: Absolutely

Avram Gonzales: So we meet the perception and the expectation of this market.

Where we came from was a market of startups and new business people and this and that, and a lot of those people expect a lot for free.

Rachel Gonzales: Right. And you know, we’ve just, we’ve found our sweet spot, who we serve best in our business. And what we have now is really working for us to get those clients in our door.

Avram Gonzales: Mm hmm. What else would you say about lessons from this and, you know, what our listeners could take away based off of what we’re sharing here?

Rachel Gonzales: I think it’s just really clear, you know, do what works for you for sure. but as you, get more busy and your time di
minishes and you have less time, it’s really important for you to consider all the things. So are you going to add a friction to your process? To maybe create a buffer. Are you going to maybe charge money?

Does that fit with your business process and your model? We did this because we wanted to create increased profitability and decrease that time that we’ve wasted on people that wouldn’t move forward anyway. So maybe this is something that really sounds interesting to you and you want to increase your profitability and not waste your time as much on people that really aren’t going to move forward with your services.

Avram Gonzales: Mm hmm. You’d be surprised how just requiring somebody to pay a little bit of money to talk to you can make a big difference.

I remember with your alterations business, Rachel had at one point, she had, you could pre book on her website, your fitting.

And the fitting, she started charging for the fitting,

Rachel Gonzales: 10 dollars.

Avram Gonzales: ten dollars, right?

 and before that, people wouldn’t show up for the fittings and stuff. The second that she started charging for it, almost everybody showed up.

Rachel Gonzales: Yep, because it was non refundable,

Avram Gonzales: was non refundable, and it wasn’t like it was getting applied to their job.

It was in addition to.

It became a part of how the business makes money and makes sure that people show up for their appointment.

Rachel Gonzales: it was a big deal for me. You know, every ticket was smaller.

It was a smaller ticket and It actually meant oftentimes I was doing fittings at their home It wasn’t necessarily at one location and I was already there. They were coming to me that was the case some of the time but not all the time and sometimes if they were the first one of the lot if I had five in a row and it was at a specific location I was there early and I had wasted time.

I wasn’t able to actually work on the garments that I did have for alterations. So there’s a lot of implications to consider. What does your business look like? What is the amount of your ticket? Like your average ticket price? What is that? How do you get new customers? How do you filter the ones that seem like they want your business but don’t really want to do business with you?

You know, how do you do that?

Avram Gonzales: What are the standards in your industry?

Can you slay a sacred cow and change things up? You know, we really stand out now because we don’t just give it all away for free. So the reports that people receive from us versus others, they take more seriously.

Rachel Gonzales: Yeah, exactly. And we’re always looking to increase our profitability, but also increase what we’re doing for our clients. You know, things change in our industry and they probably do in yours as well. So maybe. You’re not charging enough for your base service, actually. Not just like how you get the client in and do you charge for the initial thing or not.

It could be just simply what do you charge for your services? Are you charging enough? It’s a big deal.

Avram Gonzales: You had mentorship. I had mentorship from different places that, that said, look, if you’re maxed out on your capacity, it is time to raise your prices. That’s the question I want to turn over to you. If you go to babiesandbiz.com forward slash episode number.

You’ll find the show notes for this episode and our community question at the bottom. Here’s the question for you. Jump in the comments. We’d love to hear them. We read all of them. Do you feel scared to raise your prices? Why? You can change that question a little bit if you don’t like the word scared, but Everybody deals with some level of anxiety in raising their prices, and we want to know why.

Maybe we can support you in some way. Your reasons are real and valid

Rachel Gonzales: Yep.

Avram Gonzales: until they no longer work for you. So, go over to the podcast blog, leave that comment. We’d love to hear from you. If you haven’t already, go to Apple Podcast and Spotify, wherever you’re listening. And leave us that five star review.

Encourage others to come check out the Babies In Business Podcast. If you have any questions or you’ve got an idea for an upcoming podcast, you can also email us at hello@babiesinbiz.com and just let us know. We’d love to riff on some kind of topic that would be important to you. We’re always looking for content ideas for the podcast, so we look forward to hearing from you in that manner.

Thanks for listening so much. We’ll catch you on the next one.

Rachel Gonzales: Bye for now.