How To Charge More For Your Services — Part Two.

In my last post, You’re Not Charging Enough For Your Services, I gave an actual example how other companies have the chutzpah to charge 50 times the price for a service because they can (and do it). They were charging almost $400K to build a website that could easily be built for $8-10K. So you can say this is 'Part Two'. I received a huge response for the post (and a lot of texts/emails/calls from readers - thank you!) who requested a number of techniques to help them raise their pricing. Here's the best part — increasing your price can positively affect people’s perceived value of your product/service.

1. Increase your fees for every new client — I recommend this strategy frequently to my clients. It's the easiest of the bunch — no pressure, no hassle for your existing clients. You don't have to go crazy, but you can jump your pricing by 10-25% and the new client will never know. This works with service-oriented practices where one client will never know your fees for another. Of course, will not work with established or advertised prices.

2. Increase your fees based upon their apparent wealth — This is an oldie, but goodie. If you find out their income, their home/location, their car, or their company/position, you can modify your fees accordingly by upwards of 25%-50%-100%. Trust me, it's done all the time. I know it might be a bit unfair, but if a service-person is standing in front of a 10,000 square foot mansion with three Bentleys in the driveway, they will certainly charge more than the person with a used car in a duplex.

3. Increase your fees by a small percent at a key time in the year — This one is a little harder than the rest, but it is equitable across your entire client list. Bump up your pricing at a certain time of the year and most people either won't notice, acknowledge the increase, question the rise and acquiesce, or defect. If it's a small increase 5-10% and it's done in a personal or professional manner, clients most often never defect. The ones that do leave don't value your services and are looking for the biggest bang for their buck. You probably don't want them as clients.

4. Extend: Provide an extra service — Your prices should be commensurate with the value you are providing. But there might be an additional service or product you can provide where your client will acknowledge the price change but won't care because of the extra service. The product or service might not cost you a lot, but over the long run, the up-charge on services will bring in mucho dollars.

5. Streamline: Reduce your service. Review the entire client/customer interaction from beginning to end. List out every step and deliverable — be very specific and granular. Stack rank each one from most important to least important to the client. Take the bottom step/deliverable and eliminate it. Or if you're a bit queasy about doing that, ask a few clients if they really need or want that deliverable. Most of the time, they don't even know it exists. If you cut out specific steps or deliverables and your clients see no diminution in their service, you are streamlining your product AND saving time and money.

6. Position differently. Add tiers. This is a bit harder than the rest, but the benefit is powerful. Take your offerings/products and re-package them. Add services, combine services, reduce services, move pricing around to sound advantageous and more specialized to the customer, while you save money (or increase fees). This strategy is frequently performed by many service industries in food and merchandise.

7. Change the packaging. A mainstay by manufacturers who dabble with size, weight, quantity, box, etc. Like positioning, you are altering the deliverable in some way to seem bigger, but in reality, it's less (or streamlined). Take a look at your product(s) and investigate how you can alter the packaging to give the appearance of delivering more to the customer.

Some of these suggestions are just suggestions — I'm not here advocating one over the other. Some are 'morally' better than others, but in the end, they're all viable alternatives to going out of business. In my 20+ years in marketing and advertising, these seven strategies are the most employed in the marketplace. Pick the one best for your business and charge more!

Can you think of any other one? I'd love to hear from YOU.

You're Not Charging Enough For Your Services.

The other day, I came across an old contract when I worked at <confidential> from a famous consultancy called <confidential> in NYC. The contract was signed prior to my employment and after 2 months, I fired the consultancy based on their incompetence with the project. I was amazed with the short and cavalier agreement and the associated fees for each service:

• Project Management: $39,800
• Creative Development: $45,025
• Website Development: $57,350
• Audio Production: $8,550
• Testing & Delivery: $27,350
• On-Site Production: $98,580
• Electronic Mail Campaign & Fulfillment: $5,875
• Recording Studio & Equipment Rental: $15,885

The Grand Total? $298,415 for approximately 2 months work building a simple web site with six hour-long webcasts. Oh by the way, the price doesn't include any changes/additions, overtime, hosting, travel expenses, or technology. That's extra. (I get the feeling they came up with the number and worked the financials back into logical groupings — again just a feeling)

Three-Hundred-Thousand-Dollars. Granted, the agreement was dated 2000, so in today's dollars, we're talking over $400K to build a simple site.

But I present this contract to you to illustrate one simple fact:

MOST PEOPLE DO NOT CHARGE ENOUGH FOR THEIR SERVICES.

Why? You're afraid of losing clients and scaring away any potential prospects.

Guess what? GOOD! You don't need to work with them! It's time for you to fully understand the value of your services and to get a better idea what the market will bear. What would happen if you increased your fees by 50%? 75%? or 100%? I know what would happen . . . it happened to me:

1. You would have less clients. You can then spend more quality time with your current client base.
2. You would have higher paying clients. People who are probably more successful.
3. You would have clients who are serious about working with you. You will be working with people who play better tennis, so you'll have to bring your 'A' game.
4. You would have clients you really want to work with. Charging more allows you to be picky and not just take anyone.
5. You would begin to build a long list of clients who demand your services.

Are there lines around the door when HTC releases a new phone? No. How about Apple? Absolutely. You need to be the Apple of your industry.

At first it's scary. Clients will bolt, they will complain. But new clients will appear and start telling their friends.

As an example, I have a client who was charging some of her clients $100-$125 per session. After much prodding on my part, she is now charging $200 per session, and her clients are telling their friends — and her appointment book is overflowing with new clients. (By the way, she just hit her all-time yearly revenue goal in 2016!)

I also coached another client who was feeling unappreciated in their current role. They have been delivering key improvements to the company for over five years (most making the annual report). But for some reason, they received no raise, promotion, or accolade from management. They tried to inquire, but were rebuffed time and time again. Ultimately, I had them look outside of the company and within a month, they had a brand new position at a bigger firm with an increase in pay of 20%.

Raise your prices with chutzpah and the clients will line up at your door.

P.S. I'm not a hard-liner on this. I do coach two pro-bono clients every month. So there.

Get Over Your Fear Of Pricing.

Whether you're established in business or just getting started, you want your pricing to position you as a leader – not as a follower.

Let me explain — you don’t have to be the most expensive, but you can’t be the cheapest and you surely can’t be a bargain! 

Clients and decision makers really do respect and value what they pay more for and here's why — it all comes down to your CREDIBILITY & CONFIDENCE. 

You could be an amazing coach, consultant, organizer, therapist, chiropractor, coder, designer, nutritionist, etc.,  but if you’re under-charging, you won’t have the credibility and confidence you need to make more money in your business. 

Credibility & confidence is definitely attractive — both open doors of opportunity for you because they define what you do is valued by others. Credibility and confidence gets you invited to speak at amazing events, or invited to partner with people who can help you grow your business. Plus, you’re recognized and you have new client referrals effortlessly flowing in to you. A confession — I used to stay safe and secure (comfortable) by keeping my prices low. I would say, "I don't want to leave anyone out that might want be a client with Rich Gee!"

Even more insidious, I was so afraid of hearing “NO” from potential clients that I priced my services really low so that getting a client never made any difference to my finances. Guess what . . .

“YES” never arrived until I tried something completely different. I did something completely different than I ever did before.

Today, I get YES’s from the right people instead of NO’s from the wrong ones. Did you catch it? That's the secret.

When someone runs away from my pricing, they are the wrong people for my practice. They don't appreciate the impact my coaching will have on their business. All they are thinking of is how much I will cost them — not how I will help them make a lot more money for a lot less headache (a LOT more money). I am no longer afraid to stand up for the value my services provide!

People are happy to pay us if we can show them how we can help them fix the problem they have. Yes, not everyone will say ‘YES’ and that is how it should be. But, if you cure a pain or help someone get pleasure faster and better than they can do it themselves, then charge more. A lot more.

TIP: If you want to move from a fear-driven pricing practice to value-driven mission in life, contact me today.

Great Business Lessons From The Movies – Jerry Maguire.

WOW - What a wonderful movie. It's a love story, a coming of age movie, and building strong friendships, all mixed with humor and pathos. And so many business rules. So here they are:

"Show me the money!" - Rod Tidwell (video)

You work to make money. So many people forget this. I know — there's the satisfaction, the notoriety, the use of your talents, etc. But at the end of the day, you need to take a signed check home. And most people forget this.

When it comes to asking for a price for their services, most people either bunt or balk. They don't realize the money discussion is key to any business transaction. And most people think their begging or putting out their client.

I remember a proposal I was putting together — I was asking $15K for the work. My wife reviewed it (she reviews everything!) and she said to double it to $30K. I thought she was crazy — but I did it. And the client quickly accepted.

“Hey, I don’t have all the answers. In life, to be honest, I failed as much as I have succeeded. But I love my wife. I love my life. And I wish you my kind of success.” - Dicky Fox, Jerry's mentor (video)

You're going to fail. And succeed. Don't worry about one or the other. Just do your best and keep swinging.

Learn from your failures and celebrate your successes.

"Help me… help you. Help me, help you." - Jerry Maguire (video)

If you position everything you do to help other people, you will make a lot of money and be gainfully employed for many years.

The minute you veer from this tenet and start doing busy work — you'll find your job prospects drying up quickly.

"It’s not show friends. Its show business." - Bob Sugar (video)

You are not out to make friends — you are there to deliver service.

This is true with your clients, the office, organizations, etc. Concentrate first on business and if friends come later, fine. Not the other way around.

Want to read Jerry Maguire's Mission Statement? Click here.

What are your favorite quotes from Jerry Maguire?

POST YOUR QUESTIONS OR COMMENTS BELOW

P.S. Which quote resonated clearly with your career? Which one made you think twice? Let's talk. I've worked with a number of clients — and we developed a successful strategy to grow your career exponentially. If you’re not a client . . . pick up the phone and call me — I offer only one complimentary session each week.

Image: Royalty-Free License from Dollar Photo Club 2014. Over 25 million images, only $1 each.

Netflix, What Are You Thinking?

One of my most respected and admired businesses, Netflix, unveiled major changes to their pricing structure. If you are a customer, you probably received an email yesterday announcing the price increase. Netflix just asked me to pay a 33% increase in fees for THE SAME SERVICE. My current package (2 CD's and Streaming Movies) used to cost $14.99 per month — now they want me to pay $19.98 per month.

Guess what? Since my family avidly use Netflix's streaming and are frustrated by the lateness of new release DVD's hitting our home, I opted to reduce my monthly subscription to streaming for $7.99.

Netflix just lost almost 50% of my monthly payment in one fell swoop. Hopa!

Now from the face of it, this is a stupid decision. It's not like the cost of providing the services increased dramatically and Netflix had to pass on the increase to their customers.

Something else is at work here. Some facts:

• The DVD industry has been in decline for some years now.
• The studios are squeezing Netflix with their DVD launch. Stores and OnDemand get it months ahead of Netflix.
• The model of mailing DVD's is getting old when technology, broadband, and wireless is exploding exponentially.
• TV is hurting/dying and Netflix sees an opportunity.

I think Netflix has to 'rejigger' their model - move away from DVDs and focus more on streaming. That means big leaps in strategy, operations, and most of all - pricing.

Unfortunately, I've been using Netflix (off and on) since they started (I hated video stores). I wish they had a better deal for us long-time customers.

This is where I think they dropped the ball. Most people will be highly reactionary to the price change and react accordingly. Like me.

What are your thoughts on this? If you use Netflix, what are you going to do?