The Client Letter
August 29, 2011
RE: Pricing Pitfalls
The internet seems to be full of bad advice for service professionals.
The worst is probably that awful exercise where you figure out how much you want to make, then work backwards to figure out what you have to charge per hour to get there.
What you’re basically doing is figuring out where you want to cap your income. You’re building your own nice little box that will keep you (and your bank account) small.
Want to earn more money? WORK MORE.
If you charge for time, that’s basically the proposition.
If you want to get out of the rat race, stop charging for your time. Stop charging “pennies” for what is, by far, the most valuable asset you have.
From an issue of Early to Rise last week, “Trading your time for money is a devil’s bargain.”
I’d definitely agree.
Eek. Let’s move on…
Here’s a little exercise:
A potential client approaches you and says she is interested in your work. After a few moments describing what she wants done, she asks you, “So how much do you charge?”
What would your answer be?
Well, my most common answer is this one:
Once you say, “it depends,” then you have to take control of the conversation and show them WHY. That’s a topic and a skill for another day. The important thing is that you don’t just spit out a number. Not that early.
Some might suggest that you post your prices on your website, so that potential clients can get a feel for what you charge.
I pretty much think that’s rotten advice.
Here’s the simple reason you don’t want to post your prices on your website:
Menus have prices, professionals do not.
If you set yourself up like an establishment that takes orders from customers, that’s exactly what you will get.
“I’d like 5 websites, over easy please… easy on the butter.”
This is not about playing games, this is about communicating an idea. The idea is that what you do is NOT something that can simply be pulled off the shelf and taken home.
What you do (a professional service) is the response to a specific problem your client has or a goal they want to achieve.
Price has little to do with that.
But if you act like it DOES, then it will. Kind of simple isn’t it?
If you give your potential client reasons to center the discussion around price, then you should stop. Because if the discussion is focused around price from the getgo, that’s a sure sign that you are losing control.
I had a client not too long ago who hired me to create an email sequence.
I prefer to speak about client engagements on the phone, but this particular client discussion was strictly via email (knowing when to do this and when not to is more art than science).
The discussion eventually went to the price of my services. I responded with a number. The client thought that was a bit excessive for such a “small” amount of work.
We eventually came to an agreement on a number that worked for both of us, but not before I said something like, $X is hardly excessive if these emails generate 10 or 20 times that. I’d call that a value.
Your ability to charge high fees will expand with your ability to show your clients that those fees do in fact represent a “good value.”
No client that you want to work with ultimately cares about price. They care about what they get for the price. And that, dear Reader, is called value.
Talk about value.
See you tomorrow,
Creating Success for Independent Professionals