Emails, mobile phones, texts have shortened our attention span and people expect responses pretty near immediately. Companies with global call centers offering service 24-7 have trained customers to become really impatient if they have to wait for an answer. If you aim to offer good customer service and take pride in efficiency it becomes a matter of principle to respond as quickly as possible.
Yet, the less people in an organization, and the more important a customer is, the more difficult it is to deny access.
So how do you charge for interruptions? Or don’t you?
First, here’s some perspective: If you weren’t in a home-based office but working in a corporate office in town your company would be charging out your interruptions. They would, for example, have made allowance for meeting times and budgeted for them so that somewhere along the line the client pays. If the client wasn’t paying the costs of internal staff meetings the company would soon stop being viable and you would ultimately find yourself looking for a job. So you be like the company and do the same and make allowance for a reasonable number of interruptions in your day - just think of them as unscheduled meetings!
If you work on your own you may well be taking on many roles – for example, secretary, treasurer, operations manager, credit manager, sales person, cleaner and production worker.
Don’t make the common mistake of thinking you are just a production worker, make sure you charge for all those other roles you do.
No matter where you work, life crops up, interrupting the flow. Minimize interruptions as far as humanly possible but factor in a percentage as part of your working day – just make sure there are not so many you become uneconomic. Build enough fat into your prices so you can take the occasional interruptive phone call, demand from a child, request from a friend and knock at the door.
© 2007 Jane Francis is the author of ‘Price Yourself Right: A guide to charging what you are worth’ [ISBN 0-595-38601-6] which is available at Barnes & Noble (US), WH Smith (UK) and at amazon.com.
Thursday, December 20, 2007
Tuesday, December 18, 2007
The best way to win new business
In order to make a sale your customer needs to believe you are the person with the product or service who will solve their problem. They need to get to the point where they trust that you will make things better for them.
Just because you know all about your products and services, your client will not. There may be huge gaps in their understanding of what you do and how long it takes. They may be ignorant of the knowledge and skill required to do what you do and what’s more: they do not know what they do not know. They may not see the value in what you provide so it is your job to educate them. Can you demonstrate your product? How many of the senses can you involve? Can you prove your cost-effectiveness? Do you have a graph to show savings? What about case studies, before and after pictures, or testimonials from happy customers?
Teachers of fiction writers repeatedly tell their students: ‘Show, don’t tell’. In other words, don’t tell the reader the soldier went to war and felt miserable. Show the reader his misery – the rats in the trench, the incessant rain, his cold hands against the steely bayonet and the mud that made the flesh around his finger nails rot like … you get the picture!
Show your clients the advantages of your product or service. Show them what it means to them – how it will save them time, make them more money, make them thinner, younger, more gorgeous. For example, if you are selling tax advice show your customer a testimonial from a happy client that saved $5,000 in taxes last year after spending just $400 with you.
Imagine you’re selling a pre-cracked fresh egg mix to a meringue company; work out the savings in breakages, transportation and packing costs of a liquid delivered in a bucket rather than eggs in cartons. Work out the labour savings in egg-cracking time and add up all these savings in a week, a month or a year. Now show your client a picture of the increase in meringue sales and a graph of the extra profits, and how one cent more per meringue converts to $100,000 in extra sales per annum. Whip up a batch of fresh meringues and let them taste the difference. The best way to win new business is show – not tell - your customer how much of a difference your product or service will make to them.
©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Just because you know all about your products and services, your client will not. There may be huge gaps in their understanding of what you do and how long it takes. They may be ignorant of the knowledge and skill required to do what you do and what’s more: they do not know what they do not know. They may not see the value in what you provide so it is your job to educate them. Can you demonstrate your product? How many of the senses can you involve? Can you prove your cost-effectiveness? Do you have a graph to show savings? What about case studies, before and after pictures, or testimonials from happy customers?
Teachers of fiction writers repeatedly tell their students: ‘Show, don’t tell’. In other words, don’t tell the reader the soldier went to war and felt miserable. Show the reader his misery – the rats in the trench, the incessant rain, his cold hands against the steely bayonet and the mud that made the flesh around his finger nails rot like … you get the picture!
Show your clients the advantages of your product or service. Show them what it means to them – how it will save them time, make them more money, make them thinner, younger, more gorgeous. For example, if you are selling tax advice show your customer a testimonial from a happy client that saved $5,000 in taxes last year after spending just $400 with you.
Imagine you’re selling a pre-cracked fresh egg mix to a meringue company; work out the savings in breakages, transportation and packing costs of a liquid delivered in a bucket rather than eggs in cartons. Work out the labour savings in egg-cracking time and add up all these savings in a week, a month or a year. Now show your client a picture of the increase in meringue sales and a graph of the extra profits, and how one cent more per meringue converts to $100,000 in extra sales per annum. Whip up a batch of fresh meringues and let them taste the difference. The best way to win new business is show – not tell - your customer how much of a difference your product or service will make to them.
©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Sunday, December 09, 2007
Consulting fees - you get what you ask for
You've probably heard the saying 'You get what you pay for' but had you thought about its corollary: 'You get what you ask for'? When you ask for your fees are you asking for what you really want-and I am not talking just about the money?
I know a business analyst who was being contracted out at $65 per hour when the market was paying other people of his caliber (if they could find them) $150-$200 per hour. He wasn't especially motivated by money because he was content with what he had; his problem was that the work simply was not challenging enough. In his business, you don't get the best projects to work on if you are only charging $65 an hour.
He eventually solved his dilemma with just one short conversation. He told his client he was not happy with the rate they were paying him, 'Come back with something more competitive.' They did-twice his current rate and an infinitely more interesting project.
In another example, a friend was telling me about her partner who loved the type of work he did, but resigned from his job out of desperation because of the internal politics in the office. For a while, Gavin got seriously glum as he considered other options before being wooed back to his original employer as a consultant. Though he was doing the same work, he was on a six-month contract, at an hourly rate that was twice his previous salary. When that contract expired, it was renewed at almost double the rate again! My friend was laughing as she told me how Gavin was a changed man. The job was the same, and the politics remained; the only difference was that he was now being paid more than a hundred and fifty dollars an hour.
According to my friend, it was because Gavin was paid more that he felt more valued, which raised his self-esteem. External events changed his internal experience. Other people might work in reverse: they may need to raise their self-esteem first before they are able to receive more money.
If you are a contractor does your fee schedule reflect your abilities and skills? Ask yourself: Do your prices place you in the market for the type of client and work that you want to do?
© 2007 Jane Francis is the author of ‘Price Yourself Right: A guide to charging what you are worth’ [ISBN 0-595-38601-6] which is available at Barnes & Noble (US), WH Smith (UK) and at amazon.com.
I know a business analyst who was being contracted out at $65 per hour when the market was paying other people of his caliber (if they could find them) $150-$200 per hour. He wasn't especially motivated by money because he was content with what he had; his problem was that the work simply was not challenging enough. In his business, you don't get the best projects to work on if you are only charging $65 an hour.
He eventually solved his dilemma with just one short conversation. He told his client he was not happy with the rate they were paying him, 'Come back with something more competitive.' They did-twice his current rate and an infinitely more interesting project.
In another example, a friend was telling me about her partner who loved the type of work he did, but resigned from his job out of desperation because of the internal politics in the office. For a while, Gavin got seriously glum as he considered other options before being wooed back to his original employer as a consultant. Though he was doing the same work, he was on a six-month contract, at an hourly rate that was twice his previous salary. When that contract expired, it was renewed at almost double the rate again! My friend was laughing as she told me how Gavin was a changed man. The job was the same, and the politics remained; the only difference was that he was now being paid more than a hundred and fifty dollars an hour.
According to my friend, it was because Gavin was paid more that he felt more valued, which raised his self-esteem. External events changed his internal experience. Other people might work in reverse: they may need to raise their self-esteem first before they are able to receive more money.
If you are a contractor does your fee schedule reflect your abilities and skills? Ask yourself: Do your prices place you in the market for the type of client and work that you want to do?
© 2007 Jane Francis is the author of ‘Price Yourself Right: A guide to charging what you are worth’ [ISBN 0-595-38601-6] which is available at Barnes & Noble (US), WH Smith (UK) and at amazon.com.
Friday, December 07, 2007
Are you a slave to money?
If you have ever done something or gone somewhere you did not want to, just because you have paid for the tickets and could not get your money back, then you have been a slave to money. What is your relationship to money?
Is money your comfort, your god, your friend, your master, servant, lover? In a sense money does ‘talk’.
In English, Japanese, Taiwanese or French, two simple words ‘How much?’ and an open wallet can get you round most of the world. In a capitalist system we need money to function and a big part of you is the way you handle, control, manage, lose, fritter, invest, eat, burn, love, hate or worry about money.
The things money can buy have probably defined your experience of holidays, birthdays, Christmas; alongside which reside some of your most deep seated values. For example, were you brought up to ‘get your money’s worth’? What happens now when you fail to get value for money…do you end up feeling cheated or ‘ripped off’? Think about the things money symbolises to you. When you were a child, what were the conditions of pocket money? Did money bring you joy and happiness, love, entrapment, resentment or fear?
As an adult, what is your definition of waste or extravagance? I have friends at either end of the scale when it comes to grocery shopping. One buys a lot of sausages and cheap mince and prides herself on her economy; the other spares no expense and buys exotic fruit, fresh salmon and expensive, lean cuts of meats without exception. Her argument is you can buy a lot of quality food for the price of a triple heart by-pass or a mobility scooter! What does prosperity mean to you? Some financial advisers advocate that you save $3.50 a day (the cost of a cup of coffee) so you can reap the benefits of compounding interest and retire in moderation years later. I was inclined to agree with this advice until the day I realised that having the disposable cash and time to enjoy a bought coffee a day was prosperity. It was neither a wasted opportunity to save, nor an extravagance.
Money means different things to different people, and it can buy us experiences that are unique to us. A friend of mine told me her dream was to buy a brand new Porsche. Bridget had worked out she could afford it if she added the loan to her mortgage and paid it off over 25 years. Being financially savvy she knew the real cost of the car but said it was something she just wanted to do in her lifetime so the expense would be worth it. When I found out she had not yet driven one we arranged a test drive. We had only been driving five minutes when I asked her if the car ‘did it for her? Was it worth it?’ She replied, ‘I don’t know, I think I might sooner have six months skiing in Aspen.’ We discussed how she would feel returning to the workplace in order to pay for it. She told me she wouldn’t have a problem owning a better car than the General Manager but she would find it difficult going back to the boring job she had. To her that car was a metaphor for the excitement that she otherwise lacked in her life. Buying it would have provided the biggest adrenalin rush, after that it would have been down hill all the way. What she really wanted to do was break out and test her self-belief. Fortunately she realised in time that a car repayment plan wasn’t the answer.
© 2007 Jane Francis is the author of ‘Price Yourself Right: A guide to charging what you are worth’ [ISBN 0-595-38601-6] which is available at Barnes & Noble (US), WH Smith (UK) and at amazon.com.
Is money your comfort, your god, your friend, your master, servant, lover? In a sense money does ‘talk’.
In English, Japanese, Taiwanese or French, two simple words ‘How much?’ and an open wallet can get you round most of the world. In a capitalist system we need money to function and a big part of you is the way you handle, control, manage, lose, fritter, invest, eat, burn, love, hate or worry about money.
The things money can buy have probably defined your experience of holidays, birthdays, Christmas; alongside which reside some of your most deep seated values. For example, were you brought up to ‘get your money’s worth’? What happens now when you fail to get value for money…do you end up feeling cheated or ‘ripped off’? Think about the things money symbolises to you. When you were a child, what were the conditions of pocket money? Did money bring you joy and happiness, love, entrapment, resentment or fear?
As an adult, what is your definition of waste or extravagance? I have friends at either end of the scale when it comes to grocery shopping. One buys a lot of sausages and cheap mince and prides herself on her economy; the other spares no expense and buys exotic fruit, fresh salmon and expensive, lean cuts of meats without exception. Her argument is you can buy a lot of quality food for the price of a triple heart by-pass or a mobility scooter! What does prosperity mean to you? Some financial advisers advocate that you save $3.50 a day (the cost of a cup of coffee) so you can reap the benefits of compounding interest and retire in moderation years later. I was inclined to agree with this advice until the day I realised that having the disposable cash and time to enjoy a bought coffee a day was prosperity. It was neither a wasted opportunity to save, nor an extravagance.
Money means different things to different people, and it can buy us experiences that are unique to us. A friend of mine told me her dream was to buy a brand new Porsche. Bridget had worked out she could afford it if she added the loan to her mortgage and paid it off over 25 years. Being financially savvy she knew the real cost of the car but said it was something she just wanted to do in her lifetime so the expense would be worth it. When I found out she had not yet driven one we arranged a test drive. We had only been driving five minutes when I asked her if the car ‘did it for her? Was it worth it?’ She replied, ‘I don’t know, I think I might sooner have six months skiing in Aspen.’ We discussed how she would feel returning to the workplace in order to pay for it. She told me she wouldn’t have a problem owning a better car than the General Manager but she would find it difficult going back to the boring job she had. To her that car was a metaphor for the excitement that she otherwise lacked in her life. Buying it would have provided the biggest adrenalin rush, after that it would have been down hill all the way. What she really wanted to do was break out and test her self-belief. Fortunately she realised in time that a car repayment plan wasn’t the answer.
© 2007 Jane Francis is the author of ‘Price Yourself Right: A guide to charging what you are worth’ [ISBN 0-595-38601-6] which is available at Barnes & Noble (US), WH Smith (UK) and at amazon.com.
Wednesday, December 05, 2007
Do what you love and the money will follow … Bullsh*t!
Really?
Then why do ninety-nine percent of artists and yoga teachers struggle to make a living?
And childcare workers, teachers, nurses, herbalists, massage therapists, writers, actors ….
The line ‘Do what you love and the money will follow’ sells tons of books and CDs. It may even spark a few dreams - and it’s a lovely philosophy - but as a message it is somewhat lacking in detail.
To be more accurate it should say ‘do what you love and the money will follow IF you learn how to ask for it'.
Celebrities know there’s a very real place for talent agents and middle managers that act as brokers. If you really don’t have the skills to collect the money employ someone else to do it for you. Or learn how to do it yourself but don’t think it’s going to happen on its own.
©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Then why do ninety-nine percent of artists and yoga teachers struggle to make a living?
And childcare workers, teachers, nurses, herbalists, massage therapists, writers, actors ….
The line ‘Do what you love and the money will follow’ sells tons of books and CDs. It may even spark a few dreams - and it’s a lovely philosophy - but as a message it is somewhat lacking in detail.
To be more accurate it should say ‘do what you love and the money will follow IF you learn how to ask for it'.
Celebrities know there’s a very real place for talent agents and middle managers that act as brokers. If you really don’t have the skills to collect the money employ someone else to do it for you. Or learn how to do it yourself but don’t think it’s going to happen on its own.
©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Monday, December 03, 2007
10 MORE tips to help you negotiate your price
1. Sell the discounts
Some people just love a bargain, in fact, they must get a bargain. Keep their attention on the $300 they will save, not the $6,000 they will be spending.
Most people relate to cash better than a percentage--three hundred dollars is far more meaningful that 5%!
Use price points to ease your customer through the psychological pain barrier--$9,999 looks a lot less than $10,000.00.
2. Ask them to make a counter proposal
Get your client to bring their ideas into the open. See how far apart you are. Do a reality check, go back to the original brief and specifications and check they are all mandatory. Since starting the purchase process it is possible your client may have altered his expectations.
3. Price bargain
'If you want a better price, give me a better order.' Search for joint benefits and win-win solutions. For example, you could lower the price if the customer does part of the job or pays you cash in advance.
It is in the nature of your customer to want all the discounts you give him. It is not his job, nor is he ever likely to tell you you are too cheap.
4. Don't drop your price before it is necessary
Don't become too committed to your lowest price early on. Try to hold your price by giving them more value--an extended warranty, a free upgrade. You can always come down later but it's difficult to go up.
If you give them something make sure they appreciate you more for it.
5. Leave yourself room to negotiate
Allow for contingencies. Give yourself the right to add or alter the quotation later if the client changes their mind in some way, or you have unexpected difficulties sourcing raw materials and the like. Put your conditions in writing to save any misunderstandings later.
6. Keep your objectivity
If the negotiation is overheating take time to think things over. Be wary of high pressure tactics. Give yourself an 'out clause' like referring to a higher authority (your boss, your lawyer, your mother) so you have time to take the deal away and review it.
7. Practice saying no, maybe, okay then
Negotiating is a two way process--you can dance to and fro for ages--but always keep in mind the bottom-line and be prepared to walk away. Use your intuition and do not allow yourself to be bullied. You can always say no but do it in such a way that you leave the door open so you can change your mind and say 'yes' later if you think you might want to.
8. Listen for the ticking clock
One property investor buys a house every year in the week prior to Christmas. She gets a great deal and the owner goes on holiday able to make plans for the future. Make sure you know your client's timeline and use this information to your advantage.
Also make sure your contract has specific time frames e.g. this quotation is valid until <<>>. You want to retain control over your time--this is your life.
9. Assume nothing
When you present the quotation, some clients go quiet for a while before responding. Others react as if they've never seen or heard anything so preposterous. You can never know for sure what they are thinking. Ask as many questions as you can to try to find out and be confident you know why you charge what you do, what is negotiable and what is not.
10. Keep an open mind
If you find the market situation or your competitor's tactics have changed you may need to recheck your facts. Don't believe that you offer the right price for all time--do some research and intervene, if necessary.
©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Some people just love a bargain, in fact, they must get a bargain. Keep their attention on the $300 they will save, not the $6,000 they will be spending.
Most people relate to cash better than a percentage--three hundred dollars is far more meaningful that 5%!
Use price points to ease your customer through the psychological pain barrier--$9,999 looks a lot less than $10,000.00.
2. Ask them to make a counter proposal
Get your client to bring their ideas into the open. See how far apart you are. Do a reality check, go back to the original brief and specifications and check they are all mandatory. Since starting the purchase process it is possible your client may have altered his expectations.
3. Price bargain
'If you want a better price, give me a better order.' Search for joint benefits and win-win solutions. For example, you could lower the price if the customer does part of the job or pays you cash in advance.
It is in the nature of your customer to want all the discounts you give him. It is not his job, nor is he ever likely to tell you you are too cheap.
4. Don't drop your price before it is necessary
Don't become too committed to your lowest price early on. Try to hold your price by giving them more value--an extended warranty, a free upgrade. You can always come down later but it's difficult to go up.
If you give them something make sure they appreciate you more for it.
5. Leave yourself room to negotiate
Allow for contingencies. Give yourself the right to add or alter the quotation later if the client changes their mind in some way, or you have unexpected difficulties sourcing raw materials and the like. Put your conditions in writing to save any misunderstandings later.
6. Keep your objectivity
If the negotiation is overheating take time to think things over. Be wary of high pressure tactics. Give yourself an 'out clause' like referring to a higher authority (your boss, your lawyer, your mother) so you have time to take the deal away and review it.
7. Practice saying no, maybe, okay then
Negotiating is a two way process--you can dance to and fro for ages--but always keep in mind the bottom-line and be prepared to walk away. Use your intuition and do not allow yourself to be bullied. You can always say no but do it in such a way that you leave the door open so you can change your mind and say 'yes' later if you think you might want to.
8. Listen for the ticking clock
One property investor buys a house every year in the week prior to Christmas. She gets a great deal and the owner goes on holiday able to make plans for the future. Make sure you know your client's timeline and use this information to your advantage.
Also make sure your contract has specific time frames e.g. this quotation is valid until <<>>. You want to retain control over your time--this is your life.
9. Assume nothing
When you present the quotation, some clients go quiet for a while before responding. Others react as if they've never seen or heard anything so preposterous. You can never know for sure what they are thinking. Ask as many questions as you can to try to find out and be confident you know why you charge what you do, what is negotiable and what is not.
10. Keep an open mind
If you find the market situation or your competitor's tactics have changed you may need to recheck your facts. Don't believe that you offer the right price for all time--do some research and intervene, if necessary.
©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Saturday, December 01, 2007
10 tips to help you negotiate your price
1. See your price from your client’s point of view
Before you negotiate your price, first, step inside the shoes of your client for a moment and think about her fears – does she know she can trust you? How does she know you will deliver good value for money? Will you make her look stupid for buying from you?
Make sure you understand exactly what she wants and what she expects to receive from you. Invest time in educating your client how you operate.
2. Plan in advance
Make a list of what you have to negotiate. What will your customer insist on and how flexible are you prepared to be? Can you offer delivery before or after Christmas … Can you offer a six month or twelve month warranty … or would he prefer a monthly contract? Look for solutions, not problems, and keep thinking creatively. Ask him: ‘Would you prefer this or what about that?’
3. Make sure you are dealing with the person who has the authority to say yes
If possible, find out how much discretion the person you are dealing with has, and who else is involved in the purchase decision. How are you going to sell them anything if the person you are dealing with has no authority to buy?
4. Don’t mention your price too soon
Get your client thinking about what you are going to give her before you start her thinking about what she’s going to have to pay you. Build her confidence and reassure her that the quality will be just what she wants and make sure it is, or let the client go.
5. Test them
Tell your customer what others are paying and how happy they are with your products and service. Then test your customer by asking: What were you expecting to pay? How much are you paying now? What are your usual rates? Is there a company policy on this? What did you pay the last person?
6. Sandwich your price between benefits
When you tell your customer how much it costs tell her the significance of all that she is getting and how it will benefit her.
7. Compare the product quality to the price difference
If you are making a comparison between your own products and services, or those of a competitor, tell your client all the extra special effort, or components, you put in. Remember: It’s not the price that’s important it’s what the product does for her.
If your product or service is higher priced don’t be afraid of the competition. Be proud. You are better. Likewise, if you are cheaper – be proud. Tell your customer how and why you made it cheaper, and what the benefit of this is.
8. Show the penalties of not buying
What might she miss out on if she doesn’t buy now?
Show the savings - gross them up or show them as extra profits if they are reselling your goods.
9. Explain the cost (or the savings) in a way that is meaningful to your customer
Reduce the expense into smaller units e.g. $520 extra is just $10 a week; $1.42 per day: a few cents per hour. If it’s a large purchase you can work it over the lifetime of the product.
Compare the value of your deal: What else could they spend their money on? Put it in their language. For example, the cost is less than one meal out. You only need to make one sale to cover it.
10. Create some urgency
Motivate your customer to act quickly. Make them an offer, for example: Buy one and get one free; Free gift with purchase; Extended five year warranty.
Focus their attention on deciding now, not later. Give them a deadline on the offer. ‘Offer valid until [date].’ You don’t want them to procrastinate any longer.
©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Before you negotiate your price, first, step inside the shoes of your client for a moment and think about her fears – does she know she can trust you? How does she know you will deliver good value for money? Will you make her look stupid for buying from you?
Make sure you understand exactly what she wants and what she expects to receive from you. Invest time in educating your client how you operate.
2. Plan in advance
Make a list of what you have to negotiate. What will your customer insist on and how flexible are you prepared to be? Can you offer delivery before or after Christmas … Can you offer a six month or twelve month warranty … or would he prefer a monthly contract? Look for solutions, not problems, and keep thinking creatively. Ask him: ‘Would you prefer this or what about that?’
3. Make sure you are dealing with the person who has the authority to say yes
If possible, find out how much discretion the person you are dealing with has, and who else is involved in the purchase decision. How are you going to sell them anything if the person you are dealing with has no authority to buy?
4. Don’t mention your price too soon
Get your client thinking about what you are going to give her before you start her thinking about what she’s going to have to pay you. Build her confidence and reassure her that the quality will be just what she wants and make sure it is, or let the client go.
5. Test them
Tell your customer what others are paying and how happy they are with your products and service. Then test your customer by asking: What were you expecting to pay? How much are you paying now? What are your usual rates? Is there a company policy on this? What did you pay the last person?
6. Sandwich your price between benefits
When you tell your customer how much it costs tell her the significance of all that she is getting and how it will benefit her.
7. Compare the product quality to the price difference
If you are making a comparison between your own products and services, or those of a competitor, tell your client all the extra special effort, or components, you put in. Remember: It’s not the price that’s important it’s what the product does for her.
If your product or service is higher priced don’t be afraid of the competition. Be proud. You are better. Likewise, if you are cheaper – be proud. Tell your customer how and why you made it cheaper, and what the benefit of this is.
8. Show the penalties of not buying
What might she miss out on if she doesn’t buy now?
Show the savings - gross them up or show them as extra profits if they are reselling your goods.
9. Explain the cost (or the savings) in a way that is meaningful to your customer
Reduce the expense into smaller units e.g. $520 extra is just $10 a week; $1.42 per day: a few cents per hour. If it’s a large purchase you can work it over the lifetime of the product.
Compare the value of your deal: What else could they spend their money on? Put it in their language. For example, the cost is less than one meal out. You only need to make one sale to cover it.
10. Create some urgency
Motivate your customer to act quickly. Make them an offer, for example: Buy one and get one free; Free gift with purchase; Extended five year warranty.
Focus their attention on deciding now, not later. Give them a deadline on the offer. ‘Offer valid until [date].’ You don’t want them to procrastinate any longer.
©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Monday, August 27, 2007
Price Yourself Right and Red Marbles
I was emailed the following story which I liked - even though it’s a little hokey - it’s still good to be reminded that generosity makes the world go round and that some things in life are priceless; it’s not always all about the money.
John was at the corner grocery store buying some early potatoes. John noticed a small boy, delicate of bone and feature, ragged but clean,hungrily apprising a basket of freshly picked green peas. John paid for his potatoes but was also drawn to the display of fresh greenpeas. Pondering the peas, he couldn't help overhearing the conversation between Mr. Miller (the store owner) and the ragged boy next to him.
"Hello Barry, how are you today?"
"H'lo, Mr. Miller. Fine, thank ya. Jus' admirin' them peas. They sure look good."
"They are good, Barry. How's your Ma?"
"Fine. Gittin' stronger alla' time.""Good. Anything I can help you with?"
"No, Sir.Jus' admirin' them peas."
"Would you like to take some home?" asked Mr. Miller. "No, Sir. Got nuthin' to pay for 'em with
"Well, what have you to trade me for some of those peas?"
"All I got's my prize marble here."
"Is that right? Let me see it" said Miller.
"Here 'tis.. She's a dandy."
"I can see that. Hmmmmm, only thing is this one is blue and I sort of go for red. Do you have ared one like this at home?" the store owner asked.
"Not zackley but almost."
"Tell you what. Take this sack of peas home with you and next trip this way let me look at that red marble" Mr. Miller told the boy.
"Sure will.. Thanks Mr. Miller" Mrs. Miller, who had been standing nearby, came over to help John. With a smile she said, "There are two other boys like him in our community, all three are in very poor circumstances. Jim just loves to bargain with them for peas, apples, tomatoes, or whatever. When they come back with their red marbles, and they always do, he decides he doesn't like red after all and he sends them home with a bag of produce for a green marble or an orange one, when they come on their next trip to the store."
John left the store smiling, impressed with this man. A short time later John moved to Colorado, but he never forgot the story of this man, the boys, and their bartering for marbles.
Several years went by until he had occasion to visit some old friends in that Idaho community and while he was there he learned that Mr. Miller had died. They were having his visitation that evening and knowing his friends wanted to go, he agreed to accompany them. Upon arrival at the mortuary they fell into line to meet the relatives of the deceased and to offer whatever words of comfort they could. Ahead of them in line were three young men. One was in an army uniform and the other two wore nice haircuts, dark suits and white shirts....all very professional looking. They approached Mrs. Miller, standing composed and smiling by her husband's casket. Each of the young men hugged her, kissed her on the cheek, spoke briefly with her and moved on to the casket. Her misty light blue eyes followed them as, one by one, each young man stopped briefly and placed his own warm hand over the cold pale hand in the casket. Each left the mortuary awkwardly, wiping his eyes. Our turn came to meet Mrs. Miller. John told her who he was and reminded her of the story from those many years ago and what she had told him about her husband's bartering for marbles. With her eyes glistening, she took his hand and led him to the casket. "Those three young men who just left were the boys I told you about. They just told me how they appreciated the things Jim "traded" them. Now, at last, when Jim could not change his mind about color or size....they came to pay their debt." We've never had a great deal of the wealth of this world," she confided, "but right now, Jim would consider himself the richest man in Idaho. With loving gentleness she lifted the lifeless fingers of her deceased husband. Resting underneath were three exquisitely shined red marbles.
The Moral :
Do you want to be remembered for how much money you made or for your kind deeds?
Perhaps an even better question is to ask yourself: How can you be remembered for doing both?
PS. As is often the case I received this email without a credit to its author whom I would like to acknowledge if only I knew who he/she was.
John was at the corner grocery store buying some early potatoes. John noticed a small boy, delicate of bone and feature, ragged but clean,hungrily apprising a basket of freshly picked green peas. John paid for his potatoes but was also drawn to the display of fresh greenpeas. Pondering the peas, he couldn't help overhearing the conversation between Mr. Miller (the store owner) and the ragged boy next to him.
"Hello Barry, how are you today?"
"H'lo, Mr. Miller. Fine, thank ya. Jus' admirin' them peas. They sure look good."
"They are good, Barry. How's your Ma?"
"Fine. Gittin' stronger alla' time.""Good. Anything I can help you with?"
"No, Sir.Jus' admirin' them peas."
"Would you like to take some home?" asked Mr. Miller. "No, Sir. Got nuthin' to pay for 'em with
"Well, what have you to trade me for some of those peas?"
"All I got's my prize marble here."
"Is that right? Let me see it" said Miller.
"Here 'tis.. She's a dandy."
"I can see that. Hmmmmm, only thing is this one is blue and I sort of go for red. Do you have ared one like this at home?" the store owner asked.
"Not zackley but almost."
"Tell you what. Take this sack of peas home with you and next trip this way let me look at that red marble" Mr. Miller told the boy.
"Sure will.. Thanks Mr. Miller" Mrs. Miller, who had been standing nearby, came over to help John. With a smile she said, "There are two other boys like him in our community, all three are in very poor circumstances. Jim just loves to bargain with them for peas, apples, tomatoes, or whatever. When they come back with their red marbles, and they always do, he decides he doesn't like red after all and he sends them home with a bag of produce for a green marble or an orange one, when they come on their next trip to the store."
John left the store smiling, impressed with this man. A short time later John moved to Colorado, but he never forgot the story of this man, the boys, and their bartering for marbles.
Several years went by until he had occasion to visit some old friends in that Idaho community and while he was there he learned that Mr. Miller had died. They were having his visitation that evening and knowing his friends wanted to go, he agreed to accompany them. Upon arrival at the mortuary they fell into line to meet the relatives of the deceased and to offer whatever words of comfort they could. Ahead of them in line were three young men. One was in an army uniform and the other two wore nice haircuts, dark suits and white shirts....all very professional looking. They approached Mrs. Miller, standing composed and smiling by her husband's casket. Each of the young men hugged her, kissed her on the cheek, spoke briefly with her and moved on to the casket. Her misty light blue eyes followed them as, one by one, each young man stopped briefly and placed his own warm hand over the cold pale hand in the casket. Each left the mortuary awkwardly, wiping his eyes. Our turn came to meet Mrs. Miller. John told her who he was and reminded her of the story from those many years ago and what she had told him about her husband's bartering for marbles. With her eyes glistening, she took his hand and led him to the casket. "Those three young men who just left were the boys I told you about. They just told me how they appreciated the things Jim "traded" them. Now, at last, when Jim could not change his mind about color or size....they came to pay their debt." We've never had a great deal of the wealth of this world," she confided, "but right now, Jim would consider himself the richest man in Idaho. With loving gentleness she lifted the lifeless fingers of her deceased husband. Resting underneath were three exquisitely shined red marbles.
The Moral :
Do you want to be remembered for how much money you made or for your kind deeds?
Perhaps an even better question is to ask yourself: How can you be remembered for doing both?
PS. As is often the case I received this email without a credit to its author whom I would like to acknowledge if only I knew who he/she was.
Monday, June 04, 2007
Invoicing ... Are you doing it right?
Have you ever queried a bill? Can you remember the bad feelings it created?
Many business people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Though the invoice comes down to a figure that is payable, those numbers are symbolic of value; those figures symbolize what your client expected to receive and if they are higher than what they expected to pay they will not be happy.
A friend hired a landscape gardener to tidy her garden. When she asked for a quote she was led to believe the job was going to cost around $400. However, when she received the invoice it was closer to $700; here is the detailed description the company provided of the work for which they charged her:
Landscaping works completed including: Full weed & trim gardens, removal ivy & trim back invasive creeper on back fence, cut back hydrangeas, deadwood & feed fruit trees, tidy miniature agapanthus, transplant agaves & miniature agapanthus is main garden, removed lavender, prepared soil for & installed client's own potted color, potted aloe vera, tidied spider plant & jade tree in pots, tidied pathway at letterbox, full fertilise all gardens, derris dusted cabbage trees, supply compost, fertilisers, derris dust, water retention crystals. Full load to tip. Day charge. Total hours 9.5.
My friend had no issues with what the company said they did, her issue was with the unanticipated expense. When she queried why the invoice was $300 higher than her expectations, here is the reply she received:
Dear L,
We had a phone conversation regarding the expected $ for the day. As it was a charge up (not based on the original quote), I stated an hourly rate of $38.50, plus materials and rubbish removal and that we have a day charge of $150 for an 8 hour day, which is reduced if there is less time on site. Basically is equates to $150.00 divided by 8 hours = $18.75 per hour. Times this by the physical time on the job (not by the number of crew hours) i.e: 6.75 hours (9-3.45) including rubbish removal time. So $18.75 x 6.75 hours = $126.55 day/overhead charge.
The materials and waste removal were quantities not known till the end of the job.
I hope this is clearer for you.
Kindest regards J
What???? How many times did you need to reread that to understand it?
Here are 7 ways this company failed to communicate effectively with their client:
1) They failed to make it clear that they planned to 'charge up' the work as they incurred costs.
2) At no time did they provide an estimate of how much these costs might be.
3) In their reply they focused almost exclusively on their hourly rate (their issue) when their labor charges were not the main issue.
4) Nor did they provide a relevant response -- in this instance the total hours billed for this job were 9.5, not 6.75 as explained in their email.
5) The reply was needlessly complicated; befuddlement sends the signal they feel they have something to hide.
6) Nor did they acknowledge the client's feelings. Yes, they provided a left-brain informative response which might be the official line their accountant has suggested they follow but at no time have they addressed the customer as a disappointed human being.
7) Nor did they show any appreciation for the business. Even though she queried the invoice, my friend let it be known she would pay the full amount. Will my friend use this company again? No. Will she recommend them to someone else? No.
Many people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Invoicing is a process that starts from the moment you first meet the client. Your numbers tell a story and you need a congruent and SIMPLE explanation to accompany them. How much detail you provide on the invoice will depend on how well you have communicated with your client on previous occasions. Your invoices are about communication; be sure you communicate clearly so you gain a happy customer -- one that will recommend you to their friends and not write about you behind your back!
If you wish to copy this article please include this acknowledgement: ©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Many business people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Though the invoice comes down to a figure that is payable, those numbers are symbolic of value; those figures symbolize what your client expected to receive and if they are higher than what they expected to pay they will not be happy.
A friend hired a landscape gardener to tidy her garden. When she asked for a quote she was led to believe the job was going to cost around $400. However, when she received the invoice it was closer to $700; here is the detailed description the company provided of the work for which they charged her:
Landscaping works completed including: Full weed & trim gardens, removal ivy & trim back invasive creeper on back fence, cut back hydrangeas, deadwood & feed fruit trees, tidy miniature agapanthus, transplant agaves & miniature agapanthus is main garden, removed lavender, prepared soil for & installed client's own potted color, potted aloe vera, tidied spider plant & jade tree in pots, tidied pathway at letterbox, full fertilise all gardens, derris dusted cabbage trees, supply compost, fertilisers, derris dust, water retention crystals. Full load to tip. Day charge. Total hours 9.5.
My friend had no issues with what the company said they did, her issue was with the unanticipated expense. When she queried why the invoice was $300 higher than her expectations, here is the reply she received:
Dear L,
We had a phone conversation regarding the expected $ for the day. As it was a charge up (not based on the original quote), I stated an hourly rate of $38.50, plus materials and rubbish removal and that we have a day charge of $150 for an 8 hour day, which is reduced if there is less time on site. Basically is equates to $150.00 divided by 8 hours = $18.75 per hour. Times this by the physical time on the job (not by the number of crew hours) i.e: 6.75 hours (9-3.45) including rubbish removal time. So $18.75 x 6.75 hours = $126.55 day/overhead charge.
The materials and waste removal were quantities not known till the end of the job.
I hope this is clearer for you.
Kindest regards J
What???? How many times did you need to reread that to understand it?
Here are 7 ways this company failed to communicate effectively with their client:
1) They failed to make it clear that they planned to 'charge up' the work as they incurred costs.
2) At no time did they provide an estimate of how much these costs might be.
3) In their reply they focused almost exclusively on their hourly rate (their issue) when their labor charges were not the main issue.
4) Nor did they provide a relevant response -- in this instance the total hours billed for this job were 9.5, not 6.75 as explained in their email.
5) The reply was needlessly complicated; befuddlement sends the signal they feel they have something to hide.
6) Nor did they acknowledge the client's feelings. Yes, they provided a left-brain informative response which might be the official line their accountant has suggested they follow but at no time have they addressed the customer as a disappointed human being.
7) Nor did they show any appreciation for the business. Even though she queried the invoice, my friend let it be known she would pay the full amount. Will my friend use this company again? No. Will she recommend them to someone else? No.
Many people fail to appreciate that the way they price, and the process of invoicing, is a marketing issue. Invoicing is a process that starts from the moment you first meet the client. Your numbers tell a story and you need a congruent and SIMPLE explanation to accompany them. How much detail you provide on the invoice will depend on how well you have communicated with your client on previous occasions. Your invoices are about communication; be sure you communicate clearly so you gain a happy customer -- one that will recommend you to their friends and not write about you behind your back!
If you wish to copy this article please include this acknowledgement: ©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Wednesday, May 30, 2007
7 reasons to say 'thanks' to your boss today
Almost everyone these days wants to be the next Richard Branson or Donald Trump but not everyone has the entrepreneurial spirit it takes. Let's face it, it's kind of un-cool to say that your ambition is to win 'Employee of the month'. It's much more socially acceptable to say you want to run your own business or become an entrepreneur -- but are you really made of the right stuff?
Are you willing to take risks? Are you confident in yourself? Do you have the skills you need to compete successfully? Do you inspire confidence and are others willing to invest in you? Do they really believe you are as good as you say you are? How well do you manage money and cash flow? Will you be able to get your price right so you can make a profit and stay in business? If you answer 'no' to any of these questions, and you don't know how to price yourself right, don't go into business on your own. Go get a job instead!
If this is you then here are 7 reasons to thank your employer today:
1. Your employer takes ultimate responsibility for creating new business.
2. Your employer manages the cash flow and takes the risk of clients that won't pay.
3. Your employer gives you the security of a regular income you can plan on.
4. Your employer takes the hit if there is an economic collapse, the dollar rises or falls or some other sensitive market situation arises.
5. Your employer has confidence in you; that should make you feel good.
6. Your employer deals with the legislation, pays the taxes and does the paperwork.
7. You get to go on holiday and leave the business behind. You can always leave. All care and no responsibility. How good is that?
Employers are often seen as the bad guys when in fact they are everyday heroes and optimists. If you are in a job right now, accept that until the time is right, a job is a very great privilege and go say 'Thank you' to your boss today!
Are you willing to take risks? Are you confident in yourself? Do you have the skills you need to compete successfully? Do you inspire confidence and are others willing to invest in you? Do they really believe you are as good as you say you are? How well do you manage money and cash flow? Will you be able to get your price right so you can make a profit and stay in business? If you answer 'no' to any of these questions, and you don't know how to price yourself right, don't go into business on your own. Go get a job instead!
If this is you then here are 7 reasons to thank your employer today:
1. Your employer takes ultimate responsibility for creating new business.
2. Your employer manages the cash flow and takes the risk of clients that won't pay.
3. Your employer gives you the security of a regular income you can plan on.
4. Your employer takes the hit if there is an economic collapse, the dollar rises or falls or some other sensitive market situation arises.
5. Your employer has confidence in you; that should make you feel good.
6. Your employer deals with the legislation, pays the taxes and does the paperwork.
7. You get to go on holiday and leave the business behind. You can always leave. All care and no responsibility. How good is that?
Employers are often seen as the bad guys when in fact they are everyday heroes and optimists. If you are in a job right now, accept that until the time is right, a job is a very great privilege and go say 'Thank you' to your boss today!
Monday, April 16, 2007
Dealing with the ‘I have no money’ client
What is it with customers that come to ask for advice and then mention that they have ‘no money’?
Do you ‘buy’ that line? And should you?
I have had clients - an airline, bank, and multinational pharmaceutical company – who have all at one time or another told me: ‘I can’t afford it.’ ‘I don’t have any money.’
In one situation, the marketing manager of a bank called me in specifically to give a detailed brief about their marketing problem only to finish with ‘but the problem is we don’t have any budget’ - and this was after she had shown me several thousand dollars worth of branded clothing, bags and sports equipment which they planned to give away to their target audience! The cheek of it especially as this was the head office of the bank with whom we had our house mortgage at the time.
My response (not out loud) was: ‘So why, if you’ve got no money, are you telling me your problems?’ Needless to say I wasn’t at all sympathetic, and they did eventually find a budget.
Other times I’ve been given cause to think: ‘What? Your shares are trading for US $75 on the New York Stock Exchange, the company made $3 billion profit last year, and you’re telling me you’ve got no money?’
My advice: Keep your objectivity and don’t buy the client’s sob story. If it’s really important to them they’ll find the budget from somewhere. They wouldn't be wasting their time talking to you if they didn't have a problem they thought you could help them solve.
©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Do you ‘buy’ that line? And should you?
I have had clients - an airline, bank, and multinational pharmaceutical company – who have all at one time or another told me: ‘I can’t afford it.’ ‘I don’t have any money.’
In one situation, the marketing manager of a bank called me in specifically to give a detailed brief about their marketing problem only to finish with ‘but the problem is we don’t have any budget’ - and this was after she had shown me several thousand dollars worth of branded clothing, bags and sports equipment which they planned to give away to their target audience! The cheek of it especially as this was the head office of the bank with whom we had our house mortgage at the time.
My response (not out loud) was: ‘So why, if you’ve got no money, are you telling me your problems?’ Needless to say I wasn’t at all sympathetic, and they did eventually find a budget.
Other times I’ve been given cause to think: ‘What? Your shares are trading for US $75 on the New York Stock Exchange, the company made $3 billion profit last year, and you’re telling me you’ve got no money?’
My advice: Keep your objectivity and don’t buy the client’s sob story. If it’s really important to them they’ll find the budget from somewhere. They wouldn't be wasting their time talking to you if they didn't have a problem they thought you could help them solve.
©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Sunday, March 11, 2007
What does ‘right’ [as in ‘Price Yourself Right’] mean?
We live in a greed culture and I have observed that most people instantly see ‘right’ as charging more when ‘right’ might mean you need to lower your prices and sell increased volume, improve your marketing effort, increase your sales appeal.‘Right’ might also mean improve your quality, find your competitive advantage, enhance your best features, improve your sales spiel, add value to your existing product or service, sell your benefits. Alternatively, ‘right’ might mean increasing your price by becoming more exclusive, more authentic, adding creativity … but pricing yourself right isn’t always just about asking for more.
The ‘right’ price is a thought construction based on both hard figures and emotion (what feels right). The ‘right’ price is determined by your customers, your competitors and you. What is the ‘right’ price falls somewhere in the middle of the Venn diagram where these 7 factors converge:
1) What the customer is willing and able to pay
2) Availability of the product or service in the marketplace – is there an abundance or scarcity?
3) Economic and political environment – are there restraints in your industry or other barriers that affect price elasticity?
4) The costs of production and being in business
5) Marketplace and competitor prices
6) Your own bottomline beliefs on how much profit you need to make it worth your while staying in business
7) Your vision – here’s when you think in term of possibilities.
This is summary - if you want more details please refer to the book .
©2007 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Monday, March 05, 2007
What's wrong with 'We won't be undersold'?
For some some businesses, aggressive pricing is the number one marketing strategy; it’s what attracts customers in, and the reason they buy.
Customers are drawn to companies like Best Buy who have just been accused of having a public website with more attractive prices than those the customers find on the intranet at the time of purchase inside the store. You can read the whole story by Jason at courant.com.
You can see from the 196 comments posted that people feel strongly about being tricked. We don’t expect the numbers to lie and it is especially more heinous when, as in this situation, low prices are a core premise.
Seth Godin’s blog entry ‘We won’t be undersold’ first alerted me to the Best Buy story. Here he says: ‘If you have a won't be undersold motto, the very best thing that you can do is find customers who find a better price somewhere else... and then give them the discount. Why? Because it proves you're not lying, and it spreads the word. Those customers are heroes.’
... To which I would add: Beware the ‘We won’t be undersold’ tactic for these reasons:
1) Do you want a whole lot of bargain hunters as customers? Are they your target audience? If they are, I hope there’s a big population of them as the margins are going to be slim.
2) This tactic rewards customers for placing the highest value on price as if price is all that matters. If you have no plans to offer more in terms of quality, service, ambience, creativity, and you wish to disregard the environmental impact and community aspects of shopping then go with the ‘We won’t be undersold’ tactic. Otherwise don’t.
3) You give your power away to your competitors and suppliers; you run the risk of being manipulated.
4) Don’t you want to retain ultimate control over your margins?
5) Can you be bothered dealing with the ‘paperwork’ and transaction costs of refunding money on what was a done deal?
© 2007 Jane Francis Please acknowledge the source if you copy this material.
Customers are drawn to companies like Best Buy who have just been accused of having a public website with more attractive prices than those the customers find on the intranet at the time of purchase inside the store. You can read the whole story by Jason at courant.com.
You can see from the 196 comments posted that people feel strongly about being tricked. We don’t expect the numbers to lie and it is especially more heinous when, as in this situation, low prices are a core premise.
Seth Godin’s blog entry ‘We won’t be undersold’ first alerted me to the Best Buy story. Here he says: ‘If you have a won't be undersold motto, the very best thing that you can do is find customers who find a better price somewhere else... and then give them the discount. Why? Because it proves you're not lying, and it spreads the word. Those customers are heroes.’
... To which I would add: Beware the ‘We won’t be undersold’ tactic for these reasons:
1) Do you want a whole lot of bargain hunters as customers? Are they your target audience? If they are, I hope there’s a big population of them as the margins are going to be slim.
2) This tactic rewards customers for placing the highest value on price as if price is all that matters. If you have no plans to offer more in terms of quality, service, ambience, creativity, and you wish to disregard the environmental impact and community aspects of shopping then go with the ‘We won’t be undersold’ tactic. Otherwise don’t.
3) You give your power away to your competitors and suppliers; you run the risk of being manipulated.
4) Don’t you want to retain ultimate control over your margins?
5) Can you be bothered dealing with the ‘paperwork’ and transaction costs of refunding money on what was a done deal?
© 2007 Jane Francis Please acknowledge the source if you copy this material.
Monday, February 26, 2007
Are you thinking about going freelance and want to know what to charge?
Let's pretend you are a forensic accountant with a large High Street accounting firm. You have been working in a large office with sea views, you’ve had a car park, your own personal assistant and four junior accountants working in your team. You always were incredibly good at what you do and your clients know it. No one can get to the nitty-gritty of a fraudulent case quite like you do. But you hated the time wasting meetings and the office politics and now you’ve quit and are working from your home office, answering the phone yourself.
You are still the hot shot you always were but will your clients still see it that way? Now you’re working from home should your charge out rate still be $800 an hour as it once was or has something changed?
You may think that nothing has changed in terms of the quality of advice you dispense and the service you provide but in reality, other subtle things have changed. For instance, you are now out of the loop in terms of corporate knowledge, to keep up to date you may find you need to attend more conferences and network more.
Now you are at home your client is no longer buying the intellectual property of the corporate brand they once were. What price do you think they may have put on that? They are also no longer buying the surety of the brand--the fact that in the past people like you may have come and gone yet the company has performed regardless. Will they have the certainty they are used to in terms of commitment to providing a back up if you are unavailable--and what price do you think they may place on that?
Your client may have liked the prestige and convenience of the High Street location and may have been willing to pay for that, and now he knows your business doesn’t carry the same overheads how much less does he expect to pay? If you are going to do all the administration jobs yourself then you may need to decrease your hourly rate as you are now diluting your $800 an hour thinking with $20 an hour secretarial services.
To keep up with your workload you may decide to employ a secretary and two book-keepers (yours are more efficient because you don’t waste their time in unnecessary meetings). You may need to allow yourself an annual training and networking budget. You may also have to subscribe to professional organizations and journal subscriptions that when charged as an expense works out more costly than when you were in the corporate world because now you are the only person using these resources.
To decide whether you think you are still worth $800 an hour you need to build a case in your defense so you can give an explanation to your client. Perhaps you’ll decide to lower your rates because your overheads are lower or maybe you’ll charge more because now you are going to get better qualified, specialize even further and take on fewer clients so you will become even more exclusive and valuable in what you do.
© 2007 Jane Francis is the author of ‘Price Yourself Right: A guide to charging what you are worth’ [ISBN 0-595-38601-6] which is available at Barnes & Noble (US), WH Smith (UK) and at amazon.com.
You are still the hot shot you always were but will your clients still see it that way? Now you’re working from home should your charge out rate still be $800 an hour as it once was or has something changed?
You may think that nothing has changed in terms of the quality of advice you dispense and the service you provide but in reality, other subtle things have changed. For instance, you are now out of the loop in terms of corporate knowledge, to keep up to date you may find you need to attend more conferences and network more.
Now you are at home your client is no longer buying the intellectual property of the corporate brand they once were. What price do you think they may have put on that? They are also no longer buying the surety of the brand--the fact that in the past people like you may have come and gone yet the company has performed regardless. Will they have the certainty they are used to in terms of commitment to providing a back up if you are unavailable--and what price do you think they may place on that?
Your client may have liked the prestige and convenience of the High Street location and may have been willing to pay for that, and now he knows your business doesn’t carry the same overheads how much less does he expect to pay? If you are going to do all the administration jobs yourself then you may need to decrease your hourly rate as you are now diluting your $800 an hour thinking with $20 an hour secretarial services.
To keep up with your workload you may decide to employ a secretary and two book-keepers (yours are more efficient because you don’t waste their time in unnecessary meetings). You may need to allow yourself an annual training and networking budget. You may also have to subscribe to professional organizations and journal subscriptions that when charged as an expense works out more costly than when you were in the corporate world because now you are the only person using these resources.
To decide whether you think you are still worth $800 an hour you need to build a case in your defense so you can give an explanation to your client. Perhaps you’ll decide to lower your rates because your overheads are lower or maybe you’ll charge more because now you are going to get better qualified, specialize even further and take on fewer clients so you will become even more exclusive and valuable in what you do.
© 2007 Jane Francis is the author of ‘Price Yourself Right: A guide to charging what you are worth’ [ISBN 0-595-38601-6] which is available at Barnes & Noble (US), WH Smith (UK) and at amazon.com.
Sunday, February 18, 2007
Could the 80:20 Principle apply to your business?
If you are a freelancer or contractor selling your time you may find inspiration in the book by Richard Koch entitled ‘The 80:20 Principle: The secret of achieving more with less’.
I love this book for its mind-expanding qualities. Written in an easy to read style, Richard Koch is both edifying and entertaining. I especially like what he has to say about time. In particular:
I love this book for its mind-expanding qualities. Written in an easy to read style, Richard Koch is both edifying and entertaining. I especially like what he has to say about time. In particular:
- Time is not the enemy. If we make good use of only 20% of our time, there is no shortage of it. Now doesn’t that take the pressure off? So often we panic in reaction to the ticking clock when we would be better off withdrawing and regrouping and approaching the situation from a stronger position.
- We should collaborate with time: ‘Insight and value are likely to come from placing ourselves in a comfortable, relaxed and collaborative position towards time’. [p163]
- We should act less because action drives out thought. It is because we have so much time we squander it.
- Be eccentric and unconventional with time – you can not conform to everyone’s wishes.
- Under no circumstances give everyone a fair share of your time. Why should you? Pay the most attention to the activities and clients who comprise the 80% of your profits. AND pay the most attention to the activities that bring you the most pleasure; you only have one life you may as well enjoy it.
Whenever I find myself busy beyond belief it is good to be reminded that most of what I am doing is of low importance in the big scheme of things. However - when faced with one of those moments (or decisions) that are much more valuable than all the rest - it is helpful to be reminded, and encouraged, to ‘do something radical and stop tinkering around the edges’.
I bought this book so I could refer to it whenever I feel I have lost direction or focus and need some sage advice. Though some of his examples may not be relevant in all circumstances, I find the book works as an efficient ‘thought jump starter’ and is highly inspirational. I recommend it.
Tuesday, January 30, 2007
What does your price say about you?
To understand what your customer thinks of you, you need to think like they do.
If you’ve read a book, or have completed a course, in sales or marketing you will have learnt that ‘People buy on emotion’ so how about this: If people buy on emotion AND people pay with money THEN what emotion does their money buy them?
When your customer buys from you what emotions are you satisfying?
For example, my young children regularly spend their loose change at ‘The $2 Shop’. Of course the stuff is junk, and it breaks in no time at all, but when we shop there I feel safe because I know that nothing will cost more than two bucks. As for my kids they have the [short lived] fun of spending their disposable income. I feel SAFE and they have FUN!
‘The $2 Shop’ and others in that category market themselves entirely on price. Their price IS their marketing and, as a strategy, it works for them.
If you are contractor or freelancer think about your price and ask yourself: What emotion does it satisfy in your customers?
Greed? Disdain? Pity? Love? Lust? Pride? Fun? Security? Concern? Worry? Fear?
Does your customer purchase your product or service because they ‘must have’ what you offer? If so, why is that? Must they have what you offer because they are trying to outdo others (greed) or will owning what you provide make them proud of themselves, or will it satisfy their lust in some way? Does the price you charge have a bearing on your customer’s impression of you? Will your price excite, entice, satisfy or disappoint?
Will your price make your customer feel safe or afraid? For example, the dentist who charges half the ‘going rate’ will always make me feel afraid.
Take the time to understand your customer’s emotions and you will find it easier to price yourself right.
©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
If you’ve read a book, or have completed a course, in sales or marketing you will have learnt that ‘People buy on emotion’ so how about this: If people buy on emotion AND people pay with money THEN what emotion does their money buy them?
When your customer buys from you what emotions are you satisfying?
For example, my young children regularly spend their loose change at ‘The $2 Shop’. Of course the stuff is junk, and it breaks in no time at all, but when we shop there I feel safe because I know that nothing will cost more than two bucks. As for my kids they have the [short lived] fun of spending their disposable income. I feel SAFE and they have FUN!
‘The $2 Shop’ and others in that category market themselves entirely on price. Their price IS their marketing and, as a strategy, it works for them.
If you are contractor or freelancer think about your price and ask yourself: What emotion does it satisfy in your customers?
Greed? Disdain? Pity? Love? Lust? Pride? Fun? Security? Concern? Worry? Fear?
Does your customer purchase your product or service because they ‘must have’ what you offer? If so, why is that? Must they have what you offer because they are trying to outdo others (greed) or will owning what you provide make them proud of themselves, or will it satisfy their lust in some way? Does the price you charge have a bearing on your customer’s impression of you? Will your price excite, entice, satisfy or disappoint?
Will your price make your customer feel safe or afraid? For example, the dentist who charges half the ‘going rate’ will always make me feel afraid.
Take the time to understand your customer’s emotions and you will find it easier to price yourself right.
©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
Tuesday, January 23, 2007
Happy New Year
"Life is hard when you put all your energy into trying to get rid of your fears rather than into materializing your dreams." [Anon]
I urge you to remember why you price yourself as you do. Do you have good reason for asking the price you do? Are you believable - i.e. does your customer buy it?
"Business is hard when you put all your energy into trying to get rid of your fears rather than into realising your goals." Price is often the objection that sales people have the most difficulty dealing with. To the customer price is not personal but to you it may be. If you have a problem setting and discussing price make 2007 the year you gain the clarity and confidence to Price Yourself Right.
If you need help please contact me direct.
©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
I urge you to remember why you price yourself as you do. Do you have good reason for asking the price you do? Are you believable - i.e. does your customer buy it?
"Business is hard when you put all your energy into trying to get rid of your fears rather than into realising your goals." Price is often the objection that sales people have the most difficulty dealing with. To the customer price is not personal but to you it may be. If you have a problem setting and discussing price make 2007 the year you gain the clarity and confidence to Price Yourself Right.
If you need help please contact me direct.
©2006 Jane Francis is the author of Price Yourself Right: A guide to charging what you are worth (ISBN: 0-595-38601-6) available at Barnes and Noble (USA), WH Smith (UK) or online at amazon.com
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