Snippets On Pricing Our Services

When I introduced my strategic collaboration consulting idea earlier this week, anything could have happened in the comments area. Thankfully, I got the same encouraging and helpful feedback BBB commenters give all the business bits that get posted here. And as always, I appreciate every word of it!

We had a good giggle about the alleged cleverness of my 140-character microconsulting service—which inspired yesterday’s Super Genius post—but the larger discussion ignored the nature of my services, and even the technology I’ll use to deliver them. Instead, we bantered about how much I wasn’t charging for it.

Both Chris Guillebeau and Shawn Christenson commented that my proposed $65 per one-hour session was too low. Their li’l duet harmonized with a chorus of offline voices including, and especially, my cheerleading whip-cracking business coach Christine.

This week has seen a lot of asking, listening, and reminiscing on the Consulting Rate Tango, which is sorta like the Annual Salary Boogie ;) . The conversations were spun with anecdotes and recollections…some funny, some not-so-funny.

In no particular order, here are some snippets on the hazards of assigning a monetary value to precious intangibles: our skills and our time. Names have been changed to protect privacy, of course:

Anecdotes

Shena was referred to an organization by a friend who had been invited to bid on their project, but was unable to schedule it in. The organization welcomed Shena’s bid, and she offered her well-qualified self at the hourly rate she knew her friend would have charged. The organization balked at the price and offered her 25% less than what she asked. She accepted their reduction with good grace, suppressing a victorious cheer. What they were willing to pay was three times the hourly rate she’d charged her most recent client!

A short email from Stephanie: “Thought you’d be interested to hear that after laboring for 3 days over what I should charge that client, I finally, about 15 minutes ago, emailed my numbers to her (which were higher than what my head was saying and slightly lower than what my gut was saying) and literally within one minute, she’d written back to say, ‘Sounds good. We don’t need a new contract. Let me know when you want more money.’ Guess I coulda asked for more! All’s good.”

Darlene found the online job board that listed the new position at her small company. She was stunned by its $75,000 starting salary. The job description was a match to hers, except for an additional year of experience and a premiere IT certification. She’s studying like a woman-on-fire for those exams, because a $750 investment in testing fees has a potential ROI of $20,000 per year. Of course, she printed the job notice to hand to her boss with her exam results, just to make sure they’re on the same page.

Robin’s consulting rate sheet has two columns: a New York market price column for the North Atlantic states, and a much discounted rate column for the South. Clients in both regions are content with her rates, and so is she.

Recollections

Many years ago, Andrea and I argued bitterly on pricing ethics. The story: Her non-mutual friend charged a company $10,000 for an employee survey database consisting of one table, one form, and a handful of reports—it took the guy less than two days to assemble it. The client was delighted with their overpriced deliverable, Andrea was amused at her friend’s cleverness (and the company’s ignorance), and I was appalled by the whole damned thing.

I once undervalued (and underbid) a database/website project so badly that by the end, I made far less than the US minimum hourly wage. That was an awful feeling. But what soured me on future project work, maybe for all time, was overhearing the contractor billed the client for at least three times my foolishly low subcontractor’s bid…and thereby got a big fat lion’s share of the cash. It was my own doing, there’s no one else to blame. But of course, I was appalled by the whole damned thing! :D

Having shared those, here a quote from the Greek historian, Herodotus—
It is better to be envied, than to be pitied.

I called a freelance writer for a quote on some copy. He offered me a reasonable price with a 25% discount if I promised not to be a pain in the ass. I paid him full price, saying there was no way I’d forfeit my PITA rights for $30. Sure, I could’ve taken the discount, but I value his time and help more than that.

Back when I regularly visited a salon, the posted price to tame my mop was $45, but I always paid my stylist $60. The shampoo staff expected a $2 tip, but I always gave them $5. Then, like now, I didn’t have money to throw away…but my hair works my nerves, y’all. What those professionals can do in 3 hours with a smile takes me 8 hours of pained sighs. I’m exhausted and snarky when I’m finally done. Their help is worth more than they ask for, so I give them what it’s worth to me.

Jonah said it’s impossible for me to value my own knowledge effectively. He says what I think my knowledge is worth is irrelevant. He says to consider two things only: 1) How valuable is my knowledge/expertise to someone who doesn’t have it and needs it?, and 2) How much are they willing and able to pay for it? He says it’s too easy to take my skills for granted and undervalue them, simply and specifically because they’re mine.

Takeaways

These stories have bits worth simmering on when considering the true monetary value of our time. Here’s a summary:

• Price your value by the market, not your rate/salary history.
• Price your value by your client’s locale, not your own.
• Get feedback on your value from people that you trust. You may not know best…or most.
• Words are feedback. Body language is feedback. Facial expressions are feedback. And so is silence.
• Choose a fee/rate you can live with, even if it means losing the gig as the highest bidder.
• Set your rates a bit higher than you think you should. Smarter to offer discounted rates to your budget clients than try to raise your rates for those with deep pockets.

Et tu? Have you got your own stories and rememories? Different takeaways, too? Lemme know down below!

Tagged as: pricing

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