Today’s article is the second in a multi-part series on making more money in your business.
The main reason I’m writing this series on making more money is that, in my experience, most independent professionals are simply undercharging for their services.
Last week I talked about how limiting beliefs about money may be holding you back.
This week, I’m going to talk about how to change the way you think about charging for your services.
Your services are not a commodity
If you’re a commodity, your clients will think about the fees you charge and how they can get the lowest fees possible.
They’ll think your services are like everyone else’s.
Buying your services is not like buying rice, steel, or heating oil. You can always find a lower price somewhere and get more or less the same commodity.
But if you’re a consultant, coach, trainer, financial planner, or another professional, your focus can’t be on your fees, but on the results you produce for your clients.
Think of some of the results you’ve achieved for your clients. Didn’t they make a huge difference in your clients’ lives and businesses?
Many of my clients have increased their incomes by tens or hundreds of thousands of dollars as a result of the work they’ve done with me.
And I’m sure it’s the same with you.
And if your services don’t result in a monetary return, they bring other rewards that are often even more significant: big gains in confidence, fulfillment, and relationships.
Your services can change the lives of your clients. They are not a commodity.
This is the way I try to think about it:
If a client is looking for your help, forget completely about your fees and figure out what service you would ideally provide to help that client achieve the desired result.
And then ask the client what the value of that service would be to them.
Then charge that amount.
No, you won’t always get that project, but in many cases you will because you are so confident of the results you’ll produce.
This is just the opposite of what many independent professionals do.
They first wonder what the client can afford, and then create a package of services that will meet the client’s budget, not thinking enough of the ultimate results.
Then they end up working like a dog, resenting that they made so little money for so much work and often not achieving the best results possible. Sound familiar?
Time to get paid what you’re worth!
Alan Weiss, the Million Dollar Consultant, calls this “value pricing.”
Ultimately you determine the value to the client and then charge for that value (and then deliver on it).
When I learned this principle many years ago, I had a prospective client contact me with the task of finding a title for his book.
We talked and explored the value to him. It would make all the difference to have the right title. He wanted a title that accurately reflected the essence of the book. And he needed it quickly.
I also realized that if I charged a low fee he probably wouldn’t appreciate the work that went into coming up with a good title and might get stuck in the loop of asking others for their opinion and get nowhere.
So I charged him $2,500 (this was almost 20 years ago).
Ultimately, I got the project and did a lot of in-depth work to determine the most appropriate title.
I came up with just one title name. He loved it and used it for the book. He got the value he paid for.
In fact, he got even more value as I also gave him a lot of input about the contents of the book.