The other day, I came across an old contract when I worked at <confidential> from a famous consultancy called <confidential> in NYC. The contract was signed prior to my employment and after 2 months, I fired the consultancy based on their incompetence with the project. I was amazed with the short and cavalier agreement and the associated fees for each service:
- Project Management: $39,800
- Creative Development: $45,025
- Website Development: $57,350
- Audio Production: $8,550
- Testing & Delivery: $27,350
- On-Site Production: $98,580
- Electronic Mail Campaign & Fulfillment: $5,875
- Recording Studio & Equipment Rental: $15,885
The Grand Total? $298,415 for approximately 2 months work building a simple web site with six hour-long webcasts. Oh by the way, the price doesn’t include any changes/additions, overtime, hosting, travel expenses, or technology. That’s extra. (I get the feeling they came up with the number and worked the financials back into logical groupings — again just a feeling)
Three-Hundred-Thousand-Dollars. Granted, the agreement was dated 2000, so in today’s dollars, we’re talking over $400K to build a simple site.
But I present this contract to you to illustrate one simple fact:
MOST PEOPLE DO NOT CHARGE ENOUGH FOR THEIR SERVICES.
Why? You’re afraid of losing clients and scaring away any potential prospects.
Guess what? GOOD! You don’t need to work with them! It’s time for you to fully understand the value of your services and to get a better idea what the market will bear. What would happen if you increased your fees by 50%? 75%? or 100%? I know what would happen . . . it happened to me:
- You would have less clients. You can then spend more quality time with your current client base.
- You would have higher paying clients. People who are probably more successful.
- You would have clients who are serious about working with you. You will be working with people who play better tennis, so you’ll have to bring your ‘A’ game.
- You would have clients you really want to work with. Charging more allows you to be picky and not just take anyone.
- You would begin to build a long list of clients who demand your services.
Are there lines around the door when HTC releases a new phone? No. How about Apple? Absolutely. You need to be the Apple of your industry.
At first it’s scary. Clients will bolt, they will complain. But new clients will appear and start telling their friends.
As an example, I have a client who was charging some of her clients $100-$125 per session. After much prodding on my part, she is now charging $200 per session, and her clients are telling their friends — and her appointment book is overflowing with new clients. (By the way, she just hit her all-time yearly revenue goal in 2016!)
I also coached another client who was feeling unappreciated in their current role. They have been delivering key improvements to the company for over five years (most making the annual report). But for some reason, they received no raise, promotion, or accolade from management. They tried to inquire, but were rebuffed time and time again. Ultimately, I had them look outside of the company and within a month, they had a brand new position at a bigger firm with an increase in pay of 20%.
Raise your prices with chutzpah and the clients will line up at your door.
P.S. I’m not a hard-liner on this. I do coach two pro-bono clients every month. So there.