Five good reasons why you are more expensive (or should be)
Anyone can charge less; the challenge is to add value to our work. Not just to earn more revenue in fewer hours, but for the thrill of providing outstanding service to clients.
My favourite client story about fees comes from Magnus Josephson who has build a superb reputation as Sweden’s no 1 expert in public-sector procurement. In a meeting with potential buyers, Magnus was challenged on his fees: “Mr Josephson, we’ve spoken to four providers and you are the most expensive”. Magnus replied “I certainly hope so” and went on to win the business.
Here’s five reasons you should be more expensive than average:
ONE: the exceptional results that you (and your clients) achieve (together). For example… here’s where you share your “insight story” with the tangible gains made as a result of adopting your insight. If you don’t know that story by heart… rehearse it asap. It’s a vital tool in your business-development toolbox.
TWO: the risks of trying to do such a sensitive project on the cheap. For example… here’s where you share the latest horror-story from the marketplace. If you don’t know that story, find it. Your greatest friends are the consequences of not hiring you (or someone like you). Risk is compelling; often more compelling than benefit.
THREE: the guarantee that you offer. Why not? Just make sure that you get paid up-front so that the client cannot use this as an excuse for non-payment. Of course the guarantee should be reasonable – not outlandish. If you are truly exceptional, why not offer a guarantee? In today’s hesitant marketplace, this counts; it distinguishes you from others.
FOUR: exclusivity: that you only work with few clients because of the competitive edge that this gives to them. You choose to focus your efforts on providing the highest levels of service to a select clientele. Why not? Some professionals only work with clients who have been referred to them; they don’t take random enquiries from unknown parties. Just make sure this is about quality, not snobbery!
FIVE: the high degree of commitment required by both parties (not just the high degree of commitment you provide – that’s a recipe for slavery). Emphasise the essential role of the client in a successful outcome. Explain what happens otherwise, how many fail because of lack of commitment to the result. Here’s the paradox: the more you challenge the client, the more you can charge for what you do.
NB: To make all of this work, your entire approach must be totally centered on value. Magnus puts it this way: “The key to success in such a challenging discussion is to have a mindset completely locked on client value. I simply could not see how their counter-approach could increase the possibility of winning; so I explained this to them. They appreciated the candour.”
A few general points about pricing:
Rate per hour? Notice the above tips make no reference to time spent. Rate per hour (or per day) is the weakest way to charge for your services. It starts by setting a floor to your earnings, but that floor quickly becomes a ceiling.
Avoid round numbers such as 800 per day. This sounds like a random number… because it is. Use 875 instead… or 1875? Better still, find another basis for your fees. If you would like to discuss this mailto:email@example.com
Be scarce! Charging a high fee is not compatible with being available tomorrow. Make yourself scarce; e.g. busy researching new insights that confer real benefits on those you work with, teaching other practitioners, leading international initiatives or anything that reflects an outstanding professional image. If you want to be seen as an outstanding professional, you must be doing the things that outstanding professionals do.
Insist on the essential contribution that the client makes to the project. Explain why it’s not sufficient to chuck money at you. The more you underline the client’s contribution to the project, the more credible you become.
If you would value some coaching on a specific aspect of your pricing or bizdev (e.g. the conversations around your fees) you are welcome to get in touch: mailto:firstname.lastname@example.org.
You may contact Magnus and others, if you want to check out the value of my coaching work with them.