As a service provider who leans toward the “I just want to help” category, setting a price for any project can be a perplexing and occasionally frustrating experience. I remember when I started my business in 1998, particularly as I was coming from a manufactured product background, I struggled with what to charge for my services. I researched and researched, and ultimately “threw a dart” to come up with an hourly rate. And I did ok.
Then, during my annual review and planning when setting my revenue goals for the upcoming year (usually in my head, but that’s a topic for another time), I knew I had to increase clients, increase rates – or both – to achieve my goals. As I was working a full schedule already with the clients I had, I knew it had to be the rates. Yet, every year for several years, I would have an internal battle over this issue, especially when I was repeatedly reminded by business gurus that I needed to increase my hourly rate by at least 25% – or even double it. When I heard this, I balked. “Double my rates?! What world are these people living in?” My fearful self would follow that question up with, “How on earth could I tell my clients that I’m hiking my rates?!”
To say I’d be uncomfortable just thinking about the conversation would be a huge understatement.
Well, I’ve certainly learned a lot since 1998 about pricing and negotiation. Moreso about the importance of customer experience and expectations, and the impact of adding value to someone’s life – business or personal – has on pricing. That’s the space I play in now… but it took me time to get here.
If you’re where I was: feeling like you’re giving too much away yet struggling with increasing your rates, or perhaps you just aren’t confident in how to move forward with your clients with a new pricing structure, you may want to read this article by Jenna Glatzer on negotiating like a pro. Wish I’d read this all those years ago… it might have reduced my learning curve substantially!
I hope the article helps you shorten your learning curve as well. Thanks, Jenna!
To your success,
p.s. Did you have a growth experience (an “aha” moment) around pricing? Tell us about it – and the results – below!