I was consulting with a client recently who contacted me regarding a proposal she received from a prospect who wanted her to do some work for his company.
In the conversation she had with her prospect it was suggested that the proposed job would require a ‘minimal’ amount of work and therefore the ‘quote’ to perform it be priced accordingly.
So when my client contacted me she asked what she should quote the prospect. She wondered if she should quote for a half day (half of her day rate) or should she break down what she charges for her full day rate by the hour and offer the prospect a ‘prorated’ number?
I’ll tell you now that my ears get really hot when I hear this (and not because I felt my clients prospect was trying to get over on her) but because I’m tired of seeing very talented people not being compensated for the ‘true’ value they provide their clients.
In my coaching with my client I wanted to provide her with a new paradigm, a new way of seeing what she is really providing her clients; and I want to share some of those lessons with you here.
First, stop thinking of what you provide in terms of ‘time’!
A business model that many independent consultants and service providers rely upon is charging by the hour, or charging for your time.
Being paid by the hour only works in my opinion when you’re a W-2 employee (and even then not very well). Whether you refer to yourself as a independent contractor, solo professional, small business owner or whatever you’re income should not be based what you ‘do’ by the hour, it should based on the end result you provide your client.
In the case of my client I reminded her of the value she provides. To be more specific she’s providing her client with images that will increase sales of his product. And at the end of the day increased sales is what this prospect truly desires, not just pretty photographs.
Quality photographs is just a means to an end. But that’s not solely what she’s providing, she’s providing her client an opportunity to increase his profit margin based on the quality of the work she’s creating for him.
When you think of your service delivery in that way the idea of a ‘day’ rate goes out the window. Now I’m not suggesting that my client strong arm her prospect into opening his books but I do suggest that she take the time to have an open and informed conversation not only this prospect, but future ones.
Her fees should be based on the ‘result’ she provides not solely on the compensation she desires.
At the end of the day your prospect wants to be assured of the tangible results they will receive as a result of working with you. If you can show how their sales will increase, how they will get the date, how they will get more speaking opportunities or whatever result they desire and can speak to them using that language your ‘day rate’ no longer becomes an issue.
So with that said, I’d like to offer you a few suggestions to help you increase your revenues.
1. Get clear on the ‘results’ you provide your client
2. Allow those tangible results to permeate your language when speaking with prospective clients.
3. Probe deeper and get clarity before you ‘quote’ any number. Know what it is that your prospect truly wants. Remind of them of their desires and how you can deliver that before you provide a quote.
4. Immediately distance yourself from the term ‘day’ rate. The term day rate denotes that you are charging the client for your time. You are not charging for your time, you’re providing ‘results’ and those results have a fee.
5. Once you gain clarity around your prospects true needs reassure them that their needs will be met during your sales conversation.
6. Base your ‘project fee’ on results, not time.
7. Your project fee should be based on the numbers you need to meet your monthly sales goals and to run your business. So for example if you desire to make $6000 dollars a month, how many projects to do you need to do in a month to get that number? In other words what’s your numbers?
If this article helped you in any way please feel free to leave a comment in the comments filed below and pass it on to a friend.
If you need help crafting your own sales conversation with prospective clients I’d love to help you. Contact me for a complimentary [End The Struggle Now] Strategy Session.
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