November 10, 2020

What’s the biggest problem most professional services providers have with their pricing?

It’s lack of confidence. Hands down, no contest.

Most professional services providers I’ve worked with are secure in the notion that they can solve client problems. That’s usually not the issue.

The lack of confidence manifests itself in the smirking little gremlin, standing on your shoulder while you’re in conversation with a possible client. The prospect asks you about your pricing, and the gremlin whispers in your ear.

“They’re not going to go for it.”

“They’ll tell you you’re too expensive.”

“You need this business . . . . don’t screw it up now.”

“If you don’t cut the price you came up with, you’ll lose the business.”

You fold like the proverbial cheap suit. Whatever pricing you came up with, you backtrack. You can almost hear the cackle of the gremlin when you do.

I recently coached a client who hadn’t raised prices since she started her consulting practice. She priced by the hour—another problem.

I asked her how she arrived at her hourly price.

“It just felt right,” she said.

“Felt right to who?” I asked.

“Well, I didn’t think I could ask for anymore.”

These responses reveal the problem:  the focus is on me, as the services provider.

Lack of confidence can be solved by a singular focus on the client. What’s the problem that client has that you are solving? How will their life change for the better because of your intervention? What’s the value of the solutions you’ve discussed?

This perspective, and the work which goes into establishing answers to such questions, allows you to value price, to price based on client understanding of the value you deliver.

If there’s a question about how you came up with a price, the answer is centered around a perfectly appropriate answer:  you’re pricing to capture a little piece of the value your client receives. It’s fair, it’s understandable, and it’s a win-win for both side.

It’s not about you anymore. It’s not about the imposter syndrome, or you thinking you’re not good enough. It’s not about your hourly rate and whether you deserve that amount.

If your pricing conversation is grounded in the value you and the client have agreed the client will receive because of your work, you’ll be amazed at how much confidence you seem to have.

And you’ll silence the smirking little gremlin.

 

Image Credit:  JumpStory

©Ray Business Advisors, LLC and John Ray

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About me:  I’m enthusiastic about how changes in pricing strategy can significantly change profitability for a business and enhance life choices for business owners. I live this passion through Ray Business Advisors, my outside CFO and business advisory practice, in which my pricing is exclusively value-based, not hourly. I work with business owners on how they can change their pricing not just to increase their profits, but better serve the wants of their customers. Click here to learn more or call me at 404-287-2627.