Posts Tagged ‘fees’

Picture this…

You’ve just had a great meeting with a potential client and you’re ready to reveal your fee. You smile and tell them your rate; you go cold waiting for their response.

While you’re anxiously waiting their reply, crazy thoughts are running through your head like a steamroller.

Will she hire me?

Will she think I priced my services too high?

You hear “You’re hired!” and a wave of other thoughts begin to flood your mind… now you begin to second-guess your pricing!

Did I low-ball it in order to get the job?

Should I have gone higher?

You know what I’m talking about; you’ve been there and you know what’s coming next. The project always takes more time than you realize and you end up feeling overworked, undervalued and underpaid.

So what is a business woman to do who knows that she’s worth so much more but isn’t sure about how to price her services? Follow these tips for better fee setting.

1. Know What You’re Worth

When you’re pricing your service, how do you go about landing on a fee? Do you throw darts and hope for the best? Pick a price out of a hat? Or worse yet do you look to your competition to see what they’re charging?

None of those methods are going to give a price point that addresses YOUR worth.

If you bill hourly, remember that many factors go into determining your price point.  So many entrepreneurs fail to consider all the factors so remember the following:

• First figure out how much you want to be making a year
• What are your subcontractor expenses (if you have any)
• What are your other expenses
• How much profit do you want to make
• All these factors make up your “required revenue”
• Divide your “required revenue” by number of billable hours and you have your rate

Don’t forget that your total number of billable hours is never 40 hours a week.

Is this rate acceptable?  If not raise your fees.

2.  Give Them Results

Clients are paying for results. Technically they’re paying for a service but in reality they’re buying a solution.  It’s your job to make sure that you communicate those results clearly so that people know what to expect.

Will she get more clients? Streamline her processes? Be more confident when having a selling conversation? Know the benefits and communicate them effectively!

3. Create A Haggle-Free Mindset

Don’t haggle with clients about money. You’re not selling junk at a yard sale — you’re selling yourself and you have a lot of value! When you engage in haggling, it immediately lowers your perceived worth and once that happens you’re sunk!  When you haggle, you set yourself up for a continuous relationship by which your clients will nit pick you to death over everything… and NO ONE wants that kind of client interaction.  Heck, truth be told, no one wants that kind of client!

4.  Not Everyone Is Your Client

There will be times when you will have to walk away; when a potential client will not be willing to pay your fee. That’s OK; they were not meant to be your client. The right client who IS willing to pay your rate is just around the corner.

Pricing your services is one of the most difficult tasks a business owner will ever undertake. Be a smart and savvy businesswoman and be prepared by reviewing the project and price. It will save you a ton of heartache in the long run.

Did you know how much money you make and how much you charge for your services is a reflections of your self worth?

It’s true.

I know for some of you that statement conjures up all sorts of feelings.  And you know what, I understand how hard it must be to realize that the small amount of money you’re making is in direct correlation to your self esteem.

That’s a hard pill to swallow.

But it doesn’t have to be that way forever.  You can do something about that money reflection that’s staring back at you in the mirror.  You can change it!

But first I want you to consider a few things:

1.  Do often offer discounts?  Do you even offer them BEFORE your even asked?  This type of behavior is often reflected in a person who has poor money boundaries.

You make an assumption that your perspective client can’t afford your services so you jump to discounting without having all the necessary information.  Sound like you?

The reality is that if your services are seen as valuable to the client they will buy from you.  But that’s another article.

Do you barter or trade?  That’s another indication of poor money boundaries.  Money needs to flow.  When you barter you block the natural energy of money from flowing to you and back out again.

Please don’t barter, ok?

2.  When was the last time you raised your fee?  If it’s been two ore more years or if you raised your fees but only by some minuscule amount of money then you lack money courage.

You’re typically  the person who likes your fees somewhere in the middle.  You don’t want to be the cheapest out there, but you definitely don’t want to be the most expensive.

The bottom line…your afraid to raise your fees and because your afraid, you don’t.

Fear is your primary motivator behind every excuse you make for why your fees are they way they are.

Check back later this week as I reveal two additional money reflections and some tips for helping to conquer your money self-saboteur.

If you enjoy what your learning here come to the Diva Toolbox Conference for Women where I will be revealing even more information and exercises you can do to put your money self-saboteur away once and for all.

I am often asked whether or not posting fees on a website is good idea or not.  Unfortunately, it isn’t as simple as a yes or no answer.  There are pro’s and con’s to both positions.

Now I know that you are feeling pangs of uncertainty and anxiety as you struggle to come to some decision with regard to whether to post or not.  But keep reading to find out why I think posting your fees is NOT a good idea.

First let me say if you post your fees you run the risk that prospective clients will pass you by because they feel your fees are too high without you ever having a conversation with you.  On the other hand if you don’t post your fees many people will wonder just how much you ARE going to charge and will assume your fees are too much for them to afford without any further investigation on their part.

So why do I feel leaving them off is the right answer?  Here are my three top reasons:

1.  The Decision To Hire Should Never Be Made On Price Only

Do you want price to be at the top of that prospects reason for hiring you?  I think not!  Money usually isn’t the number one reason why clients will pay you for services and invest in themselves.  But if you go ahead and post your fees you are clearly encouraging clients to keep price as a main criteria for hiring you.

I have never posted my fees on my website and I don’t have any intentions of starting.  Yet the funny thing is that most of my clients are people who feel that I am out of their price range.  When I sit with them and explain the value and benefits of working with me, they usually invest, find a way to pay for the service and end up being the best clients.  Why?  Because they understand the investment they are making and are really, really committed to achieving their goals.  They are PHENOMENAL!

2.  It’s All In The Conversation

The reality here is that your goal is to engage your prospective client in a conversation.  The selling conversation is about helping your prospective client get to know, like and trust you.  This can’t happen by just going to your website and perusing your price list.  It is one dimensional and flat…there is no opportunity for your prospect to have an authentic experience with you.

But remember, there is absolutely no reason for you to get into this conversation unless you are prepared to fully understand what problem they want to solve, what their business will look like once the problem is resolved, what the cost is if they don’t solve this problem and finally what it’s worth to them to solve it.

Do you see how vital it is to have the conversation in the first place?

Do you realize by having this conversation you help them to explore so much more than just a dollar amount?

3.  Clients Want  A Price They Can Wrap Their Head Around

In short, they want a price they can justify.  Until you can help them find the value in what you have to offer, they won’t spend a penny to work with you.  Your solution must be important and valuable to them.  While you are engaged in the conversation you can ask them why it is important to them.  Without the conversation you can never uncover what is truly valuable to them.

When you ask that all important question, “What’s important to you?” the prospective client will inevitably open up and tell you all the emotional reasons behind why they want to fix and solve their problem.  When you are then able to address their issues and let them know that you can help them their objections around money disappear like magic.

Now don’t get confused here.  If you are offering a product or a seminar where everyone is paying the same price then you will post that price on your website.  But for coaching, consulting, designing, organizing or other serviced based professions I recommend leaving the price off.  Instead spend your time writing great copy that fully describes the value and benefits you offer your prospective clients so they can imagine what it would be like to work with you and have a business that is truly flourishing.

I have written extensively about this subject but I am going to write about it again because I know there are plenty of people out there making this mistake.  So here goes…

I hate to hear the word “NO”.  How about you?  Well, I bet you hate that word even more when you talk with potential clients about your fees.  You’ll do almost anything to get a “yes” instead of that dreaded no and I bet that includes lowering your fees.  The problem is that dreadful habit of lowering your fees will eventually put you out of business.

So how should you handle price objections?  Here a 4 simple solutions.

1. Establish Value Before Discussing Fees

It is always about the value.  You’ve heard me say this before, “no one cares what you do, but they do care about what you can do for them.”  Therein lies the value; its what you can do for them.  Can you help them loose weight?  Can you help them increase their sales? Can you help them manage their time more effectively? 

Whether on your website, in the sales conversation or in any other written material remember to always establish the value that you are offering the client.  So get clear on this, ok?

Remember when discussing fees don’t let the conversation stray into pricing too soon.  You need to ensure they understand the value of working with you BEFORE you talk money.

Here’s an example:  What would it be worth to you to be able to accomplish all the things that we discussed today?

Doesn’t get any simpler or more powerful than that!

Remember, there is a lot that goes into the sales conversation but if you are not clear on the value you offer your clients they won’t be either.

2. Lowering Fees = Removing Value

Remember when you are developing your packages you can always offer a lower priced alternative.  But don’t forget to remove services from that package.  Often times when clients see what was removed from the higher priced package they suddenly find the original package very appealing.

3. Have Multiple Options For Your Clients

Sometimes it really is about money. When it’s really a matter of affordability for your clients are you able to help by offering them multiple solutions?   If they aren’t ready to invest in your private coaching, then they can sign up for your newsletter and join your next workshop or group coaching program.

Having multiple packages to offer your prospects makes the entire sales process much easier. Regardless of their objections, you have something they can say “YES” too.

4. Say “NEXT” and Move On

Be willing to walk away.  Yup, you heard me right.  It takes a lot of guts to walk away and know in your heart that a better client is just around the corner.  Remember there are many, many more clients willing to pay your fee and work with you to get incredible results.

This is in fact an extremely powerful way to close a sales conversation.  People hate when something is taken away from them; they hate scarcity.  All of a sudden they want things that they think they can’t have.  Nut’s I know, but it’s true.

When you prospective client sees that you’re willing to walk away… they suddenly see you as more valuable.  You’re not there squirming and begging for their business.  You understand there is someone out there dying to work with you!

When you allow prospects to push you around and into lowering your fees you end up resenting them.  And is this the kind of working relationship you want with your clients?  I think not!

Not making a sale can be nerve racking, but take a step back, a deep breath and know that the next client is just around the corner!