5 keys to pricing your services
Posted by: Krishna De | Posted on: February 6th, 2007 | 0 Comments | Posted in: Uncategorized
Pricing your professional services and how to establish fees is an area that often concerns many professional services practices – especially those starting off in business.
What I have noticed with my own clients is that they are often undercharging versus the value of what they are delivering to their clients.
Speaking with many leaders in professional services, very often the topic of pricing is a sensitive one – it’s as if they are not proud to associate themselves with their fee structure.
You can be sure that if you are not confident in your pricing, your potential clients will notice this lack of confidence. This means that when you quote your price they will be uncertain that it is great value and that you are worth thefee you quote.
So here are five keys to pricing your services:
- Review your competition – make sure that you understand what your competition charge. This is not that you base your pricing at that level, but you must be aware what is happening in the current market place.
- Never charge by the hour – ensure that you never quote by the hour. This is the usual way many professional services firms charge and pricing on an hourly rate will leave you more vunerable to price comparisons with your competition. This then will increase the risk that your clients will want to negotiate your hourly rate. Instead, focus on the outcomes of what will be delivered and the value of those outcomes to your client.
- Calculate your unique value – consider the unique expertise and breadth of experience you are bringing to your clients. Then work out what you are confident charging. If you under charge, you will certainly feel undervalued which will show in your behaviour with your clients over time – remember we all want to feel valued.
- Push the boundaries – when you have determined what you feel confident.
charging, increase that fee by 10%. Yes this may seem a little odd. If you set your fees at a level outside your initial comfort level, not only will this new level stretch your own value of your expertise, you will ensure that you deliver great value to your clients. - Change your language – very often clients might use the term “what do you cost?” Change your own frame of reference so that you do not think or reply in the terms of “cost”. Instead, re-wire your thinking and change your language to “investment”. Your clients are investing in your services and you will be delivering outcomes so that they receive a return on the investment in you.
I do not recommend what many people suggest – under promise and over deliver. Frankly that is not authentic or honest to your client. Promise what you know you can deliver.
Yes there may be some clients that decide to not to work with you because of your fees. My advice – get over it and move on.
Don’t worry and fret that you missed out on that contract. That is a waste of your emotional energy which you need to conserve for your next great deal.
