“Our main competitors are lawyers, so we have to fight them with lower rates.”
“I spend hours every week writing off time in order to avoid fighting with clients about our invoices.”
“Clients pick fights about the smallest details. It’s exhausting.”
What fights does your company have to deal with all the time?
What if there is a way to eliminate, or at least reduce, these kinds of fights?
Wouldn’t you like to use that energy for growth, new initiatives, to increase profit?
Most Owners and CEOs say yes, they’d like to stop the fights.
But they don’t know how.
Here’s how: change your pricing model and terms and conditions.
Low rate competitors
When your firm’s pricing model is hourly billing, you are absolutely going to face competition from others in your industry who charge lower rates.
There are companies whose only goal it to be the lowest priced provider.
If you’re a Wal-Mart, you can make a boatload of money with that model.
The rest us struggle to make a living.
Instead of fighting, change the game.
Get out of the hourly rate game and adopt a pricing model that delivers results to clients for fixed, pre-determined fees.
Many times a lawyer, accountant, a specialty consultant, or fractional CXO fights with me when I suggest this!
I don’t engage in the fight; simply and clearly, I show them how it can be done. They use their past work and client results in an approach that prices for scope and results.
Many lay down their arms and join me on this playing field.
No more invoice fights
Well-defined scope and pre-determined fees prevent fights over invoices.
Seriously, what normal client wouldn’t object to seeing a charge for a short phone call or an email reply? And many don’t want to pay for research you might have to do. They think you already know everything (which is what you told them to get their business.)
Writing hours off a timesheet also is demoralizing for the associates who did the work.
This tells them the client doesn’t value those efforts enough to pay for them.
Fighting over small details
Can you imagine a client challenging a provider because the team on site finished 15 minutes earlier than planned? Well, I have clients to whom this happens all too often.
While those clients are nitpicking, the firm that sells X number of hours of work is also at fault.
Promise to get the work done within a time limit, don’t promise to work the whole amount of time. And it’s notable that the same clients who complain about finishing 15 minutes early would never offer to pay more if that same team took 15 minutes beyond the time limit to finish the job.
If you’re selling an amount of time, be prepared to get push back if you don’t work the whole time.
Prevent this fight with the promise to deliver certain results within a maximum period of time. When the results are achieved, the work is done, no fighting.
You can stop the fighting
Pricing approaches or models are completely within your control.
Choose from models that eliminate the prime reasons for these fights:
- Fixed fees for specific deliverables.
- Fixed fees for specific outcomes.
- Value based fees which tie prices to quantitative results.
- IMPACT Based Pricing which ties fees to the life changing differences the provider delivers to the client.
Terms and Conditions that eliminate fights
Terms and conditions are provisions in a purchase agreement that spells out the period of performance, the timing and method of payments, and other contractual details both parties agree to.
When your pricing approach is a pre-determined fee, you not only can, but should, require payment at time of purchase.
That is when the buyer agrees to buy. It is necessary to hold space for the client, to reserve a date, or to begin onboarding. No exceptions. If a buyer objects, do not do one other thing until payment is received or they say they are no longer interested.
For an offer of annual services, you can divide the total fee by 12 and set up recurring payments to take place automatically on the first of the month. If the client stops the automatic payment, you stop the work.
Not everyone is ready to stop the fights. They keep their hourly billing or day rates.
But if you are ready to get paid in advance for how your work changes your client’s lives, then don’t hesitate to adopt one of these pricing models plus terms and conditions.
Need to talk it over? Text TALK to 703-801-0345.
