How Much Should You Charge? Assessing the Value of a Service

I love artisan products, especially ceramics and food!

I appreciate the creative mind, the care, thought and passion that goes into their products and businesses.

I love the personal interaction, talking to the producers and hearing about their journey and how they developed the ideas for the products.? It adds a whole new dimension to what I have bought.

How Do You Assess the Value of a Service or a Product?

At the weekend I fell in love with this pot. It was not a cheap item.? I didn’t need a pot.? But I couldn’t resist.

I asked about how they made it but the one thing I did not ask was how many hours it took to make.??

How can you possibly assess ho long a brilliant idea took to develop???

Or how many years of experience and lived experiences contributed to the concept and dictated the length of time that pot took to make and perfect.

Finally, back to my pot purchase, I decided whether or not the pot is value for money based on how much I desire it, or need it.

The same applies to the type of work that I have the privilege to do.

I was recently asked how many hours I am going to put into a project.? In my mind, this is an irrelevant question.

The most pertinent question is…. will I fully support my client to deliver the result they need and want?

If someone wants to know how many hours I am putting in, chances are they are trying to compare me with another business.? Or they are going to divide the total fee by the number of hours and work out, using their criteria,? if I am too expensive! (This is not my ideal client!)

Before I talk about the clients investment, I always aim to communicate that, once we start to work together, we become partners and I work hard alongside them? to do what it takes to get the result needed. The time spent is not of so much importance to me as achieving the end result for my client. This approach is a million miles away from how many hours I am putting in.

Working with people privately and giving a bespoke service brings the best results.? But there are options.? Just like the options I had buying my pot.? I could have sent 90% less on another mass produced pot.

Is Spending Less, ‘Cheaper’ and Better Value for Money?

My business concentrates on growing businesses, more leads and more of the right clients.?

So if someone is looking for a? ‘cheaper’ option, they could buy an online course.? You will know exactly what you are getting - the modules, the group sessions.? And an online course will likely be a lot cheaper and that can be comforting at the point of sale.??

Or you can buy into a group course and learn that way. There is not much room for tailoring the methodology to your business.

Working with someone privately? is a totally different experience and can give a totally different result.? As long as the person you have chosen is an expert in their field and has experience.?

Another caveat here on getting results is, like all consultants, coaches, mentors, that I am not a magician, nor can I do all the work for a client. The client needs to be as committed as I am to achieving the results and do what needs to be done in a timely manner.??

I am always willing to go above and beyond, give my honest opinion, give the best advice I can, and be flexible.??

Similar to the reasons to purchase my new pot, investing in a one to one relationship with a professional gives you the benefit of:-

• The depth and breadth of the persons experience, drawing on what is relevant to your business?
• Someone who knows their subject backwards rather than ramming a system down your throat.?
• Time and ability to ensure that the route to the end goal is bespoke to your business? and therefore more likely to be executed over the long term
• The value of creativity of thought and ideas delivered are of the highest relevance to your business
• Flexibility. Often the path we ultimately take to get to the goal is different to the one outlined in the original proposal.? That’s ok. As long as we get to the end goal it doesn’t matter how we do that. There is no point in forcing clients down a path that they are uncomfortable with.

Although working with an experienced person/company seems expensive at the outset it is often the best value for money and a better experience. And it yields better results.

The Hardest Part of The Job? How much should I charge?

When you are offering a service as I do and all my clients also do, there needs to be a decision made about how to price the project.

The investment needs to be pitched perfectly for the client and also express the vendor's experience, skills, deliverables, and value to the client.

One of the most frequently asked questions I am asked is about how much to charge or how to price a project or service.?

Before we get onto the practical side of this, price is often tied up with self worth. The first sale is to yourself.? You need to believe that you, your team, your business is worth what you are asking. Work on this if you believe that there is discomfort around this. If I believe that a client should be charging more then we work on how they can get comfortable with that or we work on a plan to build up to asking for the right fee.

One bit of advice I always give to clients is to ask for what you are comfortable asking.? If you are uncomfortable when you are making an offer then the prospects will feel it and their confidence and trust in your business will be shaken. Rather than saying yes there is a higher chance they will say no.

There can often be concerns about charging too much and not getting the work. This can be overcome by taking time putting the proposal together. Really consider the work that needs to be done to achieve the prospects goals. Are there options, different routes to reach the objective? If these ideas seem too expensive then build out the case for your ideas.? Have different payment options. This is too big subject for this article as quick obviously there are many ways to give you the best chance of? winning projects

Charging too little can make the buyer wonder if you are good enough or experienced enough. In my experience, if you charge too little then you end up resenting the client and the time you are putting in. This is to be avoided at all costs.?

Consider how much you are willing to accept in exchange for the quality, experience, time and effort.? Take time to work out the profit.? There are so many business costs to be factored in.? There is no point in taking on a potentially unprofitable project!

Get Creative

Consider different ways? of charging:-

By the hour

There is quite a lot to consider when calculating the ideal hourly rate. All of your overheads, plus the time spent on non chargeable work, for example. Remember, there is a benefit to your client of hiring you and your team at a higher rate than an employee - they don’t have to pay any employee costs. It can save them money in the long run.

Also the work that you are contributing may not warrant them hiring.? For example, if they are creating a new website, want a research project undertaken, emergency project management, a one off consultancy project.?

I would estimate this type of fee by making a list of the deliverables and then estimating how long each will take me.? That said, projects always take longer than you think.? It is easy to underestimate time spent on the client management side of the project - answering emails, reporting, meeting time, liaising with your team and theirs. Taking time to consider the fee is always worth the effort.

Value based

Value based pricing is based on pricing your services based on both the intangible and tangible value and benefits that will be delivered to the client by your work. These could include the clients peace of mind, your business taking on a task that the client really does not enjoy.? My clients often breathe a sigh of relief when they don't have to worry about working out on their own what their niche or positioning should be, or deliberating over what their marketing plan should look like, or writing articles and posts!

The first step to getting this right is to find out what would be a successful outcome for their business.??

By ROI

One other way to charge is based on ROI but should you do this?? In the past I have been asked and I always say no. I am extremely sure of myself when it comes to the marketing of a business but I am rarely in control of the whole marketing and sales.??

Also at the point of sale of my proposal, I have no idea of the commitment and competency of the potential client and the team. ? I know from experience that, although highly committed to their marketing at the start, this does not always translate into 100% commitment later. That, in turn, affects results and my fee.?

You need to have a history with a client, trust them, be confident that they will implement your recommendations, know the figures,? and be able to track the outcome. I believe that this is an option to be considered if you have a history with the client.

Another point is, how long is it likely to take to realise the return? The project timeline needs to take this into account.

That said, if you are comfortable about the outcome by all means go for it!

What method of pricing do you use? Tell me in the comments

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