“How much should we charge” keeps so many Owners and CEOs up at night.
They want a dollar answer.
Or at least a formula for arriving at the right dollar amount.
If your firm does any of these 3 things, you are definitely undercharging.
BTW, undercharging implies there’s a comparison. So it’s a fair question, compared to what?
Compared to the significance of the life changing differences-IMPACTS- you deliver. That’s what pricing your professional and business services should be judged by.
Pricing craziness
#1: Hourly billing rates that are the same for every client. Some firms charge different hourly rates for different associates, which are often based on the associate’s level of experience. But for any given associate, the rate is the same no matter what they do for clients.
#2: Trying to be “competitive.” That means your firm is making this intensely personal (internal) decision by looking at external pressures. And it reduces the unique qualities of your firm to a competition where you neither know or control the playing field or the rules.
#3: Giving take-it-or-leave it offers. When your firm says “We can X, Y, Z for $A price, you worry about how much to include. Is X, Y, Z the best, the lowest, or in the middle? How do you know what is just right? And how will you handle a client who asks for a price reduction—without giving up any of the services?
I have the formula you’ve been looking for
IMPACT Based Pricing begins more as art than science. In fact, given human nature (many times less that logical, buffeted by trends and winds of change, etc.) it remains as much art as science even after years of practice.
However, I have some comfort for those who crave science or data.
I’ve been helping companies adopt IMPACT Based Pricing by looking at their recent client work and starting there. They’ve been successful using these numbers as a gauge of how much clients have paid for particular IMPACTS.
One client increased their firm’s revenue by 25% using this approach in 2023. Another added about $100K to their revenue in the past year by using previous engagements as a baseline and building from there.
Still, the desire for more science is strong and I have answered the call.
Formula will be revealed here:
In collaboration with George Sotiropoulos, a business coach and advisor, I am sharing the details of this data driven formula in our Masterclass, on Feb. 6.
Business Owners-Master Your Pricing and Watch your Business Take Off
I don’t want to spoil the surprise, so all I’ll say is this: know your total costs and understand the difference between margin and markup.
Register for the Masterclass to learn how to use these numbers to price your professional and business services.
It’s a game changer.
One CEO told me “I believe in IMPACT Based Pricing, but as a “numbers guy” it was hard not to look for a data driven method. Now that you’ve given that to me, I am confidently designing three options using the Choice Framework. I know all of them are correctly priced given what I learned from the discovery call with the specific client. And all of them are profitable because of your methodology.”
It’s time to talk!
Have you been reading my newsletters or blogs for years? But we’ve never talked?
Let’s change that right now!
Text TALK to 703-801-0345 and we’ll set it up.
“But won’t you try to sell me something?”
Not at all. I don’t sell (i.e. trick you into buying) I only make offers to those who want them.
That’s what happens during this 30 minute call.
Still skeptical? You’ll never know unless you try. Text TALK to 703-801-0345. I’d love to talk with you.
