The comments on this blog are something very special. But I think I’m going to strike my first medal and award it to Sarah Shafi. Thank you for your comment last week, Sarah – I strongly suspect there have been shorter dissertations.
(And as an aside, how many people clicked through to Sarah’s website? Intelligent, reasoned comments on blogs work.)
OK, back to the grindstone, and the final part of the trilogy. Return of Son of How Much Should You Charge?
I finished last week with four key points on pricing. To save you going back a page, in summary they were:
1. Be consistent: define what you do, what you offer, who your target market is – and stick with it
2. Have faith in yourself – as the saying goes, you’re worth it
3. Have faith in your pricing as well: discounts and loss-leaders rarely work in the long term
4. Perception, position and ‘message’ are vital. Everything needs to support your core business proposition.
Let’s look at those four points in more detail.
1. First of all, what do you do and who’s your target market? Every really successful business I’ve ever dealt with, worked for or sold to could say neatly and precisely what they did and who they were doing it for. I’ve quoted this before but I always come back to this one: “I’m a fitness coach for pregnant women.”
Yes, it rules plenty of people out but it still leaves a significant market: there were over 700,000 live births in the UK last year (just in case anyone in North Yorkshire fancies a change of direction…)
So job number one is to apply the FCPW test to your business – if you can do that it will underpin and define what you charge. (Not to mention preventing the business running off down several blind alleys.)
2. It can be tough to keep faith in yourself when a few people have said no and I don’t know many successful businesses where there hasn’t been a moment – or several moments – of self-doubt. Even if you’ve got a success rate of 50% it won’t be win-lose-win-lose. There wouldn’t be casinos if black couldn’t come up ten times in a row.
3. And once you’ve decided on a price – stick with it. To paraphrase Desiderata, there will always be persons charging greater and lesser amounts than yourself. I am always astonished by the amount some online ‘consultants’ charge when the only wisdom they have is the wisdom to believe in themselves.
As I said last week, I have very strict rules if I’m giving a discount on my consulting services. Sometimes you can appear heartless doing this, but I have to say that it has never let me down. Everyone in business knows that you have to harden your heart from time to time. ‘That’s why it’s called show business,’ as the saying goes. ‘Not show friends.’
4. Finally, as we’ve discussed many times, everything has to support your core business proposition. From your business cards to your website to your appearance – and above all to your clients. I’m sure many of you have read Michael Port’s highly successful Book Yourself Solid. In it he talks about the “velvet rope” – the one that marks out the VIP area. Try that approach – define your ideal client and only take clients that meet the criteria you’re looking for. Yes, it will be hard and yes, you need faith in yourself. But how good would it be to only work with clients who met your ideal criteria?
So what should you charge? Something that makes you a profit, something that values your time, something that makes you feel worthwhile. But above all, something that makes you feel ever-so-slightly uncomfortable. And then go out and earn it…