An accountant once told me that he never met anyone who didn't want to make
30% more money. Whether you want a better lifestyle or to take more
vacations, buy a fancy car, spend more time with your family, send your
children to college or to give it all away, you could always use more money.
(article continued below ...)
If you sell services, your primary limitations on earnings are your costs
and the number of hours in a week. Most independent professionals are
already working well over 40 hours a week and can't work longer hours to
increase earnings. Your goal should be to find ways to work less and
increase your earnings. How can you market smarter and make more money?
Don't Discount Your Services
Have you ever heard of a lawyer or carpenter offering a 20% discount on
their hourly or daily rate? Every time you offer a discount or reduce your
regular rates, you are sending a message to prospects that your services
really aren't worth what you're asking.
Once your clients know that your prices are discounted or negotiable, you
will always be fighting a battle to be the paid full price for your work.
Never offer discounts; your clients will assume that they are expected to
pay the asking price for your services.
Overcome Objections to Price
Prospects invariably want to know your pricing before they understand the
benefits your products and services provide. Quoting prices is meaningless
until prospects can put the cost into the context of the results they can
expect.
When prospects show concern about your pricing, it's a good sign. It
indicates their interest in buying your services and a need to understand
the value you provide. You could list all the benefits of your services but
if you really want to make the sale, it's far more effective to let
prospects sell themselves.
A client's perception of value isn't based on how much they pay, but on
whether their expectations will be met and the benefit they will receive.
Don't get stuck on the dollars you charge per hour. Instead help prospects
define the dollar benefit of your services.
When prospects query you on price, respond by asking questions to help
them identify for themselves the problem they want solved, the cost of the
problem, the solution they need, and how you can help them. Prospects buy
when they think their expectations will be met. Let them define their
expectations and they'll be far more likely to sell themselves when you
finally explain your pricing at the end of the conversation.
Position Yourself as An Expert
Differentiate yourself from your competition by using your articles to
regularly provide insight and ideas to your prospects and clients so they
come to view you as an expert in your field. Use expert positioning and
consider raising your prices.
When Arnold Schwarzenegger first arrived in the U.S. he had trouble
getting work as a stonemason with his funny accent, despite charging less
than his competitors. A friend suggested he set his prices above the
competition and bill himself and his partner as exclusive European masons.
His business took off and look where he is now!
Avoid Hourly Fees
Unless you sell hour-long massages, charging by the hour is the best way
to limit your earning potential. When you charge by the hour you lose money
if you work efficiently or if you get a great idea right away. Prospects can
always negotiate with you on the number of hours they want, undermining your
ability to put in the time needed to meet their expectations.
Prospects want results. Help them clarify the results they want and then
set a project fee for accomplishing those results. Make sure your contract
or letter of agreement allows you to adjust your price if the project
changes mid-stream.
Use Value Based Pricing
You can pay $30 or over $5,000 a night for a motel or hotel room. Both
provide a roof over your head, a bed and your own bathroom, so why do some
people pay over 150 times more for one than the other?
People buy based on their perception of the value provided. If they
understand the value that your service or product provides, they may be
willing to pay much, much more than you are currently charging. Look at the
results you provide for clients and reassess your pricing.
Leverage Your Time and Money
Like most service professionals you have limited time and money to spend
on marketing. Much of your time is spent delivering services. Is your
marketing helping you earn more? Do prospects understand the unique value
you provide? If not, take a look at the way you are positioning your firm
and adjust it to clarify your value to clients.
Are you making what you could be? If you apply even one or two of the
above strategies, you'll be making more money than you are now without
working any harder. You'll probably still wish you had 30% more.
- 2003 © In Mind Communications, LLC. All rights reserved. - The author,
Marketing Coach, Charlie Cook, helps independent professionals and small
business owners attract more clients and increase their earnings with the 5
Principles of Highly Effective Marketing. Sign up for the Free Marketing
Guide and the 'More Business' newsletter, full of practical marketing tips
at www.charliecook.net
November 25, 2003
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