No matter what your activity is, surely at some point you have doubted how to determine your professional fees.
So the topic of rates is quite hot among entrepreneurs, freelancers, freelancers and independent professionals who sell services in the market.
Although there is a lot of literature that you can consult on how to define how much to charge, I like to show my clients these three alternatives that I consider to be the most common and from which you can choose your best option. I also think it is a good idea that you evaluate the three options and make a mix of them. Below you will also have my personal recommendation. So… ready? Are here:
Method #1 – Depending on the value of your time and work
This method is about defining what seems valuable to you and makes you feel valuable: considering your time, the type of work you do, your experience and your career.
But this is really difficult for some people (especially if you’re just starting out) who feel insecure and don’t know how much to charge, or have little experience in “self-pricing” and will end up with a rather low number. If that’s the case, you might want to:
Method #2 – Depending on what the market pays
This seems most common. In fact, it keeps you average. The first difficulty is that you tend to compare yourself with certain people who could well be charging less than they should and have more experience than you. Then what do you do? You set a lower rate that doesn’t even cover your business expenses and that makes you feel unhappy and hate every client you work with because you feel undervalued. It doesn’t seem to be a good option either.
Method #3 – According to the value generated by your services
This is definitely the one I like the most (my personal recommendation!) although I must admit that it is not easy to calculate and will take some practice. I will give you the fundamental steps to try it in your business, through these 3 key questions.
This is essential. If you do not have a list of specific results and benefits, you will not know how to correctly value your services.
I give you an example, that of my own business: some of my clients hire me to help them start their own business. So, they get these benefits/results:
1. When they finish a mentoring program with me, they already have their business implemented, which will generate income for life (or until they decide to discontinue the business).
2. In addition, they know the fundamental strategies to make it grow for the coming years.
3. In addition to this, with the knowledge they have learned about what to do and how to do it, they can redesign the business or implement a new one.
4. On the other hand, they learn the techniques that help them feel more secure and confident to be able to communicate, sell and offer their professional services.
5. And even more, they will have great clarity about what steps to take throughout the entire process, given that they have my constant accompaniment and support.
Now is your turn: What are the results or benefits that your clients will achieve with your professional services?
Important note: Don’t fool yourself into thinking that your services do not represent a tangible or economic benefit if you work with more human factors such as personal development, self-esteem, relationships, etc. Although there are other much more concrete benefits that appear at first glance, a person with difficulties in carrying out their communication, with poor self-esteem or personal problems that make them insecure and lost, is not a good employee and could lose their job. whenever. This would represent a waste of money (in addition to many other disruptions). In the same way, someone with high self-esteem will be able to value themselves more and be able to ask for a salary increase, or even have a part-time business related to a hobby or professional passion. Try to delve deeper into what your client can achieve, you will be surprised at what you discover.
This is also a very interesting question. For example, I motivate my clients to recover their first investment in an average of 2 clients. That is to say, and read this carefully, I torture them (with a lot of affection but firmness) so that they do not set low prices but rather give greater value to their services. Well, the torture thing may be a little extreme but the point is that I put a lot of focus there because low prices lead to few clients, disappointment with the business, working long hours, losing enthusiasm and deciding to send everything away. door through which he came. Of course, this will also depend on the type of service you offer, because your clients could in any case triple their return with a single client. It would be good for you to know what this optimal ratio is to be able to offer them this information. It helps a lot in making a decision, especially when it comes to long-term benefit.
So, your turn: In what time, with how many clients or under what conditions will your clients recover their investment?
This last strategy is something I learned from one of the mentors I follow, Robert Middleton of ActionPlanMarketing. Robert explains that the best way to set rates is to find that number by which we feel amply rewarded and that allows us to make additional efforts even if they were not planned. This is something that some mentors in the market differ with, but I will tell you this strategy and you will know if you want to implement it or not.
The question to answer would be: if to achieve the results that you have promised your client you have to make additional efforts (more meetings, more support, more dedication, more material, etc.), what would be the value for which you would anyway would you feel rewarded? If you find that number for which no matter what you have to do for your client, you will be happy and delighted to serve them, you will have found your ideal rate. Remember that not all clients are the same (some are very autonomous and work alone with little information, others need much more support, help, accompaniment) and not all will demand in the same way. But you always have to serve them the same: with the greatest possible excellence.
And in your case, What is that value for which you would feel rewarded even when you have to make changes in your work plan and work harder to help you achieve your goals?
Using these three powerful questions, I am sure that you will be able to give a price to your services that you consider appropriate and at the same time feel rewarded for what you offer. Remember that the model with which I agree, that I implemented in my business and that I teach to my clients is a model of high-value, high-price services. I have extensive dedication to each of my clients which would not allow me, for example, to work with 20 people at the same time. If you identify your optimal number of clients in conditions of high excellence, you will be one step further in defining a successful model for delivering your services.
