Over on the Insiders (our confidential mastermind group) I had this question asked. As a Founder of The BWN and a coach with extensive experience of what makes us busy business owners succeed in business and get the results we want, I wanted to give you some ideas so you can confidently say “this is our price!” without feeling like you are being greedy or risking business. Let me know how you get on and as always you can ask questions, get feedback on what you learn over on our confidential mastermind group any time you like.
The phone rings and you do the happy dance because out of the blue someone wants what you do. Great feeling isn’t it?
(Well okay not out of the blue if you are an Insider or one of my client’s you know it’s about the branding, the vision, the mission, the marketing, the ethos and then it’s about the products and services and about the full package we put together to ensure you do get a constant supply of new customers (especially remembering the right actions and mindset -that’s another blog article on it’s own!)
The point is, this is what business is about. Getting the sales.
You then discuss their needs – ensure you utilise that information in your follow up conversations and communications (top tip!) and get a proposal sent to them for their consideration and a reply of yes please….
They say “great, lets’ do this.” And you get the purchase order arranged, a date in the diary and it’s all systems go. Except…
Then you get the message. “Just wanted to check if;
- It’s okay that our secretary sits in this too. I know we only booked for myself and my business development manager but that’s okay right?
- You could also just have a quick look at so and so, it probably doesn’t need a lot doing, but if you could just…
- It will be okay for you to give us some advice on X too, we think we are pretty much there, but if you could cast your eyes over it would be great.
The list of “Can you just’s” is long and it is often so subtle that you find yourself thinking things like;
- “Well we are there any way.”
- “What’s the big deal if other members of the team sit on in this?”
- “They are going to love us all the more if we over deliver on this!”
And that’s the point, you are so intent on doing your best, delivering to the very best of your ability that you miss that you are now working for free.
The problem is that while you may recognise these statements, there are probably subtle ones going on right now in your business that you give in to. And by doing that you could be;
- Reducing your profit margins.
- Reducing your money making hours.
- Overworking for some and neglecting other clients.
- Causing unnecessary stress.
- Not having enough hours to work on your business.
- Not the hours to take on new customers.
And that’s just a few of the issues I see arise from coaching clients because they are really nice business owners who give too much.
So we know what’s going on, but how do you fix it?
Here’s a few ideas to get you started….
With new customers and regular ones you are never going to turn into a Highway Cowboy robber and start shouting “Give us ya money!” are you? However in your head you may well be thinking, this just is not viable for us. Is this a loss leader or is this damaging our success? And ultimately what you want Is more money, however you never need to say this. Ever.
Often before I help clients find new markets and more customers I help them look at the calibre of clients they already have. And if we discover they aren’t fitting into the business model of the company then we do something about it. Ultimately what happens is the business owner either renegotiates with their current customers because their prices probably haven’t gone up in 4 to 8 years (and yet their costs have so their profit margins have suffered!) or they explain what will be tangible moving forward. Rarely have I seen a client lose business, if anything their customers are loyal, love working with my clients and are keen to ensure it’s a fair relationship so fees go up. And if they do lose clients, it’s a real relief to get rid of the customer that was sucking them dry. (This also makes room for more great customers that do pay a fair price for an awesome job. So first things, first – know your numbers;
- What is tangible?
- What is sustainable?
If you are an Insiders check out my Profit calculator so you can ask yourself “If I was working the maximum hours with fee paying clients would I be making the profit margin I want AND have the life and business I want?”
When you know you have the right customers It’s never about saying give us more money. It’s about analysing their needs, understanding their budget and working out where that can meet. It’s great to show you care and give more, however if giving more becomes you reverting to the negative observations above then you’ve given too much. Learn to communicate in a powerful way. What words do your customers love to hear, what words feel your customers with dread(sometimes they can be very powerful in your negotiations – for instance if you customers hate the costs associated with rehiring staff and that means they feel stressed out trying to find the right staff and then there’s the hassle of training them, and will they stay, etc – if you only talk about ensuring you hire the right staff can increase profit margins, you are aren’t talking about the deep down real issue to the business owner (who obviously wants to make more money) the real issue is the grief, stress and sleepless nights its going to personally cause them too. Including the positive and the negative in the right quantities really helps you communicate with power. I find coaching style questions taught to my clients can help them find these answers and really understand the needs of their customers while still ensuring your needs are met.
A great question to ask is “What is your budget?” For me I say I can cater for most budgets (you will see why in a later top tip) however this makes it clear that you are not going to give them the moon on the stick but that you still will do all you can for them. Remember these words “We are a business, not a charity”. (That works well for many of my clients!)
A big area that many business owners get themselves in a pickle is around price. The business owner is thinking “We need to make £X an hour” and the client has their own agenda. With these 2 thoughts bought together you get one price. However the interesting bit is how one photographer/coach/Copywriter/baker charges ££ and another charges £££££ – how is that possible? Because the ones charging a great rate and attracting awesome customers doesn’t use the above equation to work out their rates, they work on value. For instance, take my job. I charge £175 per hour. Do I then charge £175 to work with me for the day? No, how is that possible? Because if I’ve got 12 people working with me in a room for the day that in theory is £1400. However what is that day worth to the individual? To the company?
If you start to consider this then you can see there is a very different equation at work here. Don’t charge people according to what it costs you an hour, charge people according to the value they will tangibly get from their time with you. For instance if I work with 12 people and reduce stress in the office every day, help them to increase productivity, work smarter and increase profit, that’s worth a lot of money to that company. And while I’m not going to charge them the full value of that, I will charge a fair fee. It’s far easier to do this when you see the true value you bring. A word of caution here – don’t get wishy washy about it. Be real. Be honest. Making people happy or making something that’s pretty maybe nice but what is the tangible result of that?
Still struggling to communicate powerfully “this is our price”? Take just 4 minutes to total how much you’ve spent on your career – the training, studying, research, books, resources. Now add the cost of your office costs, commute costs, etc. Factor all of these in and you start to see that your rate is far more than just fair. Your experience, investment in training, knowledge, staying up to date and cutting edge – rarely do I see an hourly rate that reflects this. Even if you don’t increase your rates to reflect this in its entirety knowing this information usually ensures you’ve no issue in increasing your rates by some percentage.
Remember if you can’t value your time then why should your customers?
If someone really doesn’t have the budget (and this is something I see) then how could you still help them? A few years ago I realised there were a lot of people I’d love to help however they just weren’t in the position to invest in my coaching (although funny, how we justify somethings but not others? If you’ve got potential clients who quibble your fees but have perfectly manicured nails, drive a new car and have perfect hair that is freshly styled at the salon, it is possible it’s not that they can’t afford it, it’s more than likely that they don’t see the value or feel it will work for them so either change your marketing or stop chasing the wrong type of potential clients.)
As a result of wanting to help more people I set up the Insiders, my online courses and books. I’ve been told I could charge quaduple for the Insiders and they’d still pay and I could charge 400% more for my courses and they’ve have still bought them. Will I put the prices up? No, because its part of my mission statement and ethos to be accessible to all that want help. So if someone doesn’t have the budget and you are tempted to give it away, how could you help them and honour your business too?
Automated courses, books, group sessions are a great way of helping more people without damaging your ability to make a profit, not kill yourself off and achieve what you want to personally and professionally.
Some people will always try and get free. They will corner you at events, ask questions on line and even phone you for advice, will they ever spend money with you? No. These people don’t even realise they are doing it, however you need to be able to spot these people and maintain your integrity but ensure they don’t sap your business dry. My saying may help;
If you want V.I.P then you need to pay, if not you can still get some in the cheap seats – VIP or Cheap seats? Their call.
Remember when you attract the right customers they expect to pay for your services. They aren’t trying to get something for nothing. They will negotiate with respect and turn up with some idea of budget. And if you find yourself constantly dealing with price quibblers, maybe ask yourself how is our marketing communicating to people? And that’s an article for another day or head over to The Insiders to continue this conversation and get more ideas.
If you would like to work with me asking anything you like whenever you like, you too can join the Insiders. It’s just £10 a month and there’s no selling at you – you either benefit and stay or don’t. Most have stayed since we launched in 2018! I hope that tells you what the Insiders is really like for you and your business. Click here to join us.