If you have read my previous blogs you will know I argue strongly against time-based charging. Hourly billing fails on tests for morality and ethicality. Time-based charging is not intrinsically unprofitable, but it is sub-optimal. You need an alternative, and there is one.
Each customer creates a price 'band' based on their perception of the value - to them - of what you propose to do. A price outside this band, at either end, will be ignored. You need to discover this band each time, and to do this you need to be a price searcher, not a price taker.
This would apply to hourly rates too. How might someone earning £20 per hour view a £300 per hour quote? Better to quote a fixed price for the package.
“There is a challenge in moving forward through the charging
hierarchy without resorting to the billable hour”
You will increase your customers' willingness to pay when you are communicating value between you. There is a challenge in moving forward through the charging hierarchy without resorting to the 'billable hour'.
And do remember that a service needed is always worth more than a service delivered. Note that members of the oldest profession in the world always demand payment in advance!
Professional Service Providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws_emp.co.uk.
If you consider yourself to be a Professional Service Provider, or a Professional Knowledge Worker, what exactly do you do for your customers? Sure you 'add value', but how does the customer perceive the results of your effort?
Although Professional Service Providers don't supply commodity 'stuff' or tangible goods, they still need to be wary of how they, and therefore their customers, view their services.
A service business charges for activities, such as fixing a leak. A higher level of service business might charge for the time a customer spends with them, for the 'experience', such as an evening spent at the theatre.
But a Professional Service Provider operates on an even higher plane, causing the customer to demonstrably achieve certain outcomes. Professional Services are 'transformation' businesses.
The customer holds the Professional responsible for guiding the transformation, but if the customer is not willing to follow the advice given, the results and thus the value outcomes are impossible to achieve.
It is crucial to accept that there is absolutely no similarity between guiding a transformation and a selling a commodity product, or even a bundle of services. In facilitating a transformation, the professional is 'touching the customer's soul' and by touching the soul the Provider becomes virtually impervious to competition.
If you agree with these thoughts and would like to find out more about pricing your services so you can make sales without selling and get paid what you're worth, visit www.sws3.co.uk to download 30 more free practical ideas you can implement straight away in your business.
“Professional Services are transformation businesses.
The Professional is touching the customer's soul.”
Professional Service Providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws3.co.uk.
Pricing is analogous to a farmer harvesting his crop. It's the way product and service providers gather in their share of the value their efforts have created. You wouldn't imagine a farmer going away on a family holiday just at the start of harvest time, would you! So why neglect your pricing?
Pricing is the most important of the four Ps of marketing. It is literally the only means available to the seller for capturing value. So, in your marketing strategy, Price needs to be aligned with Product, Promotion and Place in order to create a viable value proposition.
Your Price sends a signal to your customers about what you think your product or service is worth. This is a far louder message than advertising or any other form of Promotion! Consequently more resources should be devoted to Pricing than the other three Ps.
Pricing must be a core competency in every business - including yours. If you are dealing with professional buyers, you need professional Pricers on your side.
If you agree with these thoughts and would like to find out more about pricing your services so you can make sales without selling and get paid what you're worth, visit www.sws3.co.uk to download 30 more free practical ideas you can implement straight away in your business.
“Pricing must be a core competency in every business -
including yours”
Service providers who charge for their time or their materials, or whose prices are influenced by their competitors can find out how to get paid what they're really worth at www.sws3.co.uk.
