An imposter is someone who pretends to have knowledge and expertise that they don’t have. They use hourly billing because they don’t have any basis for accurately predicting the IMPACT they deliver.
You’ve been developing your expertise and delivering results for years. You know how to do this!
Have you ever said you can’t do impact based pricing because:
- “your work is too complex”
- “clients want too many changes”
- “there are too many unknowns”?
None of these reasons are true. In your years of experience you’ve dealt with many of these situations. You can create an IMPACT based fee with benefits to clients and to your firm.
Toss imposter syndrome out and embrace your knowledge and expertise.
Is Imposter Syndrome Keeping you Stuck to Hourly Rates?
You’re not an imposter! How do I know this? Because you’ve been in business a few years or longer and you’re making money. You have the extensive knowledge and expertise to adopt IMPACT based pricing with confidence.
So why are you sticking to hourly billing?
How often have you said:
- “The work is so complex we can’t charge an impact based fee.”
- “Clients want so many changes that we can’t charge an Impact based fee.”
- “There are too many unknowns, we can’t charge an impact based fee.”
These statements have been said to me by, respectively, the CEO of a bookkeeping service, the chief designer of a web design firm, and an attorney.
What’s behind these objections?
One trait was common among all of them and many others: lack of confidence that they could charge an impact based fee that would ensure they make money.
Hourly rates give them confidence.
Why? Because hourly rates are designed to cover all expenses and deliver profit. As long as enough hours are invoiced, they will do no worse than break even.
Confidence reduces concerns about risk
Owners, CEOs, founders and managing partners are risk averse. Better to eke out a 3% profit for sure, than to try to earn a 10% profit and fall short.
What’s behind the lack of confidence?
They act as if each project or matter is a first, a complete unknown.
Each of these knowledge firm owners and hundreds of others will talk about their expertise and depth of experience. They could use these facts to have a high degree of confidence that they can navigate complexity, anticipate client behavior, and predict the path a legal matter will take.
Instead, they allow their worries about what they don’t know lead them away from confidence. They worry they are imposters, not experts.
“If you think you can or you think you can’t, you’re right.”
About one in 10 projects or matters may end up consuming more resources than one expects. That one would cause a hit to your revenue and profit.
Compare that to the 90% that you can anticipate and plan for perfectly. Why let the one overpower the nine?
Impact Based Pricing is not a Shot in the Dark!
When I began to explore impact based pricing in 2010, it was a big risk. Every single other provider was charging hourly rates and I wondered how I could make the change.
I knew I was the best in my field. My knowledge and expertise allow me to deliver life changing impact to every client. I needed a system or process as a guide.
It was time to study my work. I spent months analyzing recent past work and all the new projects that came our way during those months. After a few months I had clarity about how to analyze the relationship between fees and the value we delivered for those fees. I created our Fee-to-Value Ratio process and tested it for several more months.
One day I committed that I would offer our services for an impact based fee to the very next client who called.
The Fateful Phone Call
The very next client had an opportunity, that, if they succeeded, would transform their 30 person firm into a 300 person firm. We discussed the work and after a pause and a deep breath I said we’d be delighted to work with them for an impact based fee that I would send to them the next day.
My heart was pounding while I waited a few seconds for the client’s reply. He said, “that would be great.” And we have never wavered from our impact based pricing model.
There are the occasional projects that seem to consume much more of our resources than I anticipated, but they are few and far between. I learn from them and don’t make those mistakes again.
Best of all, clients invariably say “You really made an impact! We couldn’t have done it that well without you.” It’s a reflection of the full access and unlimited contribution of our knowledge and expertise to delivering life changing impact.
You’re Not an Imposter
Don’t take my word for it though. Prove it to yourself. Download our Fee-to-Value Ratio process and complete it. You’ll see the correlation between your fees and the value you deliver.
Build on this to offer more value to your clients and increase your compensation for delivering that value. You will never need to track time and invoice for hours again.
Let me know if you’d like to get on my list for a STARTER call. It’s 45 minutes. You ask questions and I answer them. The outcome is a few tips or action steps you can use immediately to START solving the problems that are holding you back.
Text STARTER to 703-801-0345 or hit REPLY to add your name to my list. I typically have openings in my schedule within two weeks. We’ll talk then!