Not sure where I first came across this quote, but it’s a sentiment that always bear repeating.
To an extent, value is relative. Which is why it’s important to work with the right, well-chosen clients, clients who need what you have to offer and will therefore appreciate (i.e., value) it more highly.
That said, at a fundamental level, if you don’t value what you have to offer (and price it accordingly), no one else will either.
Does this resonate with you? I’d love to hear why.
Dear Danielle,
Happy New Year! I hope all your dreams will be actualized in 2019! My question relates to raising rates with current clients and if there a formula to follow. In the past I have used the script you provided in your blog post Raising Your Rates, and I must say it has worked like a charm. I love all the advice you provide on the blog in this category, especially about not letting fear get the best of you when you offer high quality service. Over the last couple of years, I have restructured my administrative consulting business. I offer a core service in two niche markets. During this time, I have retained five clients and have had great success. With each new client,I have incrementally raised my rates. This gets me to my question: The first client I retained almost two years ago is THRILLED with my service. Not only did I meet the contractual obligations, but went above and beyond. I really hit the ball out of the park with this client. They are often singing the praises about my administrative consulting firm. Since their two-year anniversary is approaching, I was planning on raising their rates. Is there standard protocol to follow (like tipping a server at a restaurant)? I thought I would raise my rates (REMOVED)%. This is a number I picked because when I see a vendor, utility, or dental plan increase by this amount, I think, “that’s fair,” but any higher, I feel like I am being taken advantage of. Next, I looked up the cost of living increase on Google. It is 3% each year for 2017 and 2018. That makes me wonder, would I be undercutting myself with a (REMOVED)% raise and should I increase to (REMOVED) %? Vacillating to the other end of the spectrum, I am obsessed with client satisfaction. I don’t want to raise the rate so high they feel taken advantage of. We have a dynamic relationship. Would seeing the numbers help? The client’s current retainer is $(REMOVED)/month. As I solicit new clients, they will pay $(REMOVED)/month for this service. However, I am not ready to lose this client. I truly value your guidance in this situation. Thanks again for all you do for our community! —Name Withheld for Privacy
Thank you, and happy new year to you as well! And thanks for the great question which I’ve been chomping at the bit to answer for you.
First, congratulations on your well-earned growth and success. That is absolutely wonderful to hear!
I also want to let you know that I am keeping your name anonymous and removed certain info from your question for reasons I will explain below.
The short, quick answer is that there is no formula for raising your fees. I know people love to be given formulas, but it’s not that simple.
It’s also highly illegal for members of a profession/industry to discuss rates or setting standards or minimums or formulas when it comes to pricing as these things violate antitrust laws. Those kind of conversations constitute what is termed “collusion.”
The state and federal agencies that oversee these laws take violations very seriously so we never want to run afoul of them.
It doesn’t matter how big or small a business is, whether they are sole proprietors or big corporations, or how much money they make, we are all subject to these laws.
As they will tell you: ignorance is not a defense. This means you can be prosecuted for violations whether you were aware or not.
This is why I am always trying to educate our industry on this topic. Read this post for a bit more in-depth info: Dear Danielle: Why Can’t You Just Give Us a Ballpark Figure When It Comes to Pricing?
So for all the other colleagues out there, the bottom-line is this: STOP asking others what you should charge!
Not only are you putting yourself in danger, you are putting others as well as our entire industry in jeopardy. Your pricing is for you and you alone to determine.
The good news is that we don’t have to discuss specific numbers to help each other learn and grow in our business smarts and profitability.
Here are the things I would want you to give some thought to:
Don’t compare what you do to a utility. You are not a commodity; you are a professional service provider.
Your value is relative to how you improve the life and business of each of your clients, not how much they pay for a box of cereal on a shelf.
Here are a couple of posts to help people better understand and remember what their real value is to clients (hint: it’s not how much/little clients pay or how much money you save them):
How has your work helped them advance, grow and improve in their business? What goals has it helped them achieve or get closer to? How much more time and freedom do they have since working with you?
When it’s time to raise your rates, be thinking along these lines and taking note of them, not just how much your workload may have increased, although that is certainly relevant as well.
People know that when they get more, they pay more. The benefit of connecting what they have gained by working with you, however, is that it helps keep them in a positive mindset toward fee increases, particularly when they are increased for more abstract reasons (such as cost of living) and not necessarily increased workload.
How you determine your fee increases and how much to increase them by is entirely up to you. There is no right or wrong way to do it.
I’m concerned that you have one-price-for-all.
If you are providing administrative support, you are providing a variety of tasks, functions, and roles for each client, each of whom is unique and whose support areas, needs, levels, and objectives are all going to be different from the next client.
When you are providing a value-based service, there shouldn’t be anything cookie-cutter about your pricing. Each client’s needs and support plan should be evaluated and determined on an individual basis. This is something I show people how to do in my Value-Based Pricing Guide.
It doesn’t tell you what to charge or give you a formula. It will show you what factors to take into account, how to identify/categorize support plan areas and set parameters and boundaries, and give you as systematic an approach as you can get for determining your pricing around your support plans that is fair and profitable for both you and your clients.
Capture their “before” picture at the start of every new client relationship.
When you consult with potential clients and onboard new ones, be sure to include a step where you obtain as complete a picture as you can of their current challenges, difficulties, pain points, and obstacles, as well as their desired objectives and outcomes BEFORE you start working together.
(If anyone reading this doesn’t have a consultation process in place, you NEED one now! Get my Consultation Guide for an easy, step-by-step plan that shows you exactly what to do before, during and after.)
Not only does this help you create case studies/stories for your website, it’s also incredibly useful insight to have when it’s time to raise your fees.
By better identifying what each client actually values and what they’re trying to accomplish through your work together, you can use that information to set benchmarks and emphasize those accomplishments.
They also inspire clients by helping them remember what life was like before they had your support and how far they have come and what a smart decision they made in choosing you.
Survey clients for their feedback and suggestions on a regular, consistent basis.
This is something else that is useful when presenting fee increases as it can help you connect the dots from your work directly to what the client’s values, goals and objectives are.
I recommend getting client feedback at least every year for established clients, and more frequently (e.g., every three to six months) for new clients.
One caution, though: Don’t raise fees at the same time of year that you survey clients for their feedback and suggestions. Do these two things at different times of the year.
Similarly, if you have my Value-Based Pricing Guide, you know that I also recommend reviewing every client’s support plan at regular intervals.
For new clients, you are going to do this more frequently because there is a lot of ramping up and getting to know the work and each other and fine-tuning of things in that first year of working together.
For them, I suggest reviewing their support plan internally every two to three months initially in that first year.
You want to make sure you are honoring the parameters you both agreed to and identifying any scope creep that you have not have taken in account and then adjusting accordingly at the next fee increase.
With established clients, you may decide that an annual support plan review is sufficient for your purposes.
Keep clients informed upfront all along the way with plenty of notice.
Let new clients know that there may be a period of adjustment in the first months/year of working together and that you will be reviewing their support plan every so many weeks or months.
If there are areas that have been or need to be added on or increased (or been eliminated or significantly decreased, for that matter), let them know that the fee they pay may be affected.
And let established clients know that their support plans are reviewed regularly as well (e.g., annually or every six months).
The key is to inform all clients upfront that their support plans are reviewed at specific intervals and that there will be periodic fee increases as you deem necessary or appropriate
You want them to understand that what they pay is relative to the support areas and parameters you have agreed to, and as those change and evolve or increase, you will be examining them and adjusting pricing accordingly.
At a very basic level, all I can say is this: You know your clients. You know what you do for them. You know when you feel like you are doing more than what you are charging for. You know how they are benefiting from your work. And you know when it’s time for raise fees for the profitability of your business and in keeping with the value you are providing.
When you start to feel those nigglings, that is always the correct time to review and adjust.
Always be reviewing and evaluating internally, and then on whatever regular schedule that you determine, implement your fee increases.
Let’s say you like to go through your annual feedback process with clients around May or June when business generally tends to slow down somewhat for everyone and they have more time to reflect.
You could then time your annual fee increases for January.
Whenever you time these events, I suggest you always give clients 30-60 days’ notice of any support plan adjustments/fee increases.
This gets them used to the idea, gives them time to ask any questions they have, and ensures no one is surprised or caught off guard. That’s the only thing that would really create ill will.
By giving courteous notice, it’s only going to help you adjust things in the best way possible for both you and each of your clients.
The bottom-line: Never surprise clients with things coming out of left field.
Everyone appreciates a heads-up so they can plan and budget accordingly, and your fee increases will be far more well-received.
I heard the most ridiculous thing this morning.
Yet another internet marketer was telling people that it’s a matter of respect to publish pricing on your website, that you are being “manipulative” if you don’t publish prices so that a “logical, rational, open-hearted, responsible ADULT” can decide whether it’s in their price range.
This is the kind of thing cheapskates say.
And I’ve got news for them: respect goes both ways.
In fact, what’s manipulative and dishonest is them implying that you are manipulative, dishonest, and not an open-hearted adult if you don’t publish your prices.
Playing to the lowest common denominator is a race to the bottom of the client barrel, folks.
Nothing good comes from listening to those who merely want you to make it easier for them to pit providers against each other on price so they can get something of value for as little as possible.
Let me set you straight. Not posting pricing has nothing to do with being manipulative or coercive.
It’s the fact, plain and simple, that more conversation is needed with a provider before cost can be determined.
Because here’s what “logical, rational, open-hearted” adults also know: their needs are not going to be exactly the same as the next person’s needs and, therefore, cost can vary depending on differing particulars and variables.
Do you see how more in-depth one-on-one conversation with a live, actual person here is vital?
There is more probing and questioning a provider must engage in with you in order to identify the needs, values, and results that are important to you individually before they can give you an appropriate price.
I don’t think anyone can call that anything but reasonable, rational and client-centric.
And consider this… how many times when you’ve needed services have you called around and ended up choosing the person/service that you felt the most “good” about, simply based on your actual conversation and interaction with that person/business, regardless of the price and despite how much conversation was needed?
You simply came away feeling like they cared a little more about you as a person than the next provider, about what your goals were, about the quality of their work, about doing a great job for you and making sure you got the right price for your situation.
We’re talking about human to human services here, not boxes of cereal along the grocery aisle.
Professional services (which includes the professional service of administrative support) aren’t commodities on a shelf, one exactly the same as the next.
And value-based pricing, if you follow the methodology I teach, isn’t based on an hourly rate.
The ingredients required to support one client are not necessarily going to be the same ingredients the next client needs. So there isn’t a nice, neat, one-size-fits-all price you can publish.
Providing administrative support, and professional services in general, involves more details than simply buying a box of macaroni sitting on a store shelf.
Out of respect for all parties, you owe it to both the client and yourself to require some further conversation apart from the website so that you can both get certain vital information from each other, determine where and whether you can help, and see if there’s a good mutual fit so that you can then determine what their particular plan of support would cost.
That’s something that has to be done on an individual basis, not on your website.
And rational, reasonable adults — who have a vested interest in finding real solutions and getting the right help and are not merely shopping for the cheapest provider — understand this.
Instead of publishing prices, have a conversation on your website about your approach to pricing and why you don’t publish prices. Rational, reasonable adults are perfectly capable of understanding this.
In fact, it will make perfect sense to them once you bring it to their attention. They’ll actually appreciate it and feel better knowing that you have their best interests at heart, which is exactly why one wouldn’t publish pricing.
It does clients a disservice to treat them all the same (hmm, sort of like they were nothing more to you than interchangeable boxes on a shelf).
But you can’t get more meaningful insight or learn more about them without further conversation.
The happy byproduct of that conversation, incidentally, is that they also get more insight into why they would want to choose you.
And I’ll let you in on a little secret: In a sea of websites all trying to be generically the same (and whose skills and polish tend to be just as low-grade), not publishing prices (and stating the reasons why) will be a competitive advantage that makes you stand out and will attract better, more ideal clients.
It is precisely because my ideal clients are rational, reasonable, and intelligent adults that I do not post pricing on my website. They are smart enough to understand why an actual conversation is in order first.
So, I don’t publish pricing on my website because:
There is much more to say about this topic in order to fully grasp all the nuances of posting or not posting prices. I encourage you to read more here about the pros and cons of posting/not posting pricing on your website.
And if you want — if you need — to charge more than $5/hour and you don’t want to be stuck with a poorly earning practice the rest of your life, you need to learn how to price and package your support in a way that speaks to clients and what they care about (none of which requires you to publish pricing or compromise your high standards around client care and discovery), and you need to learn how to have the whole pricing conversation that goes along with that.
I have three products that will teach and show you exactly how to implement those things, step-by-step:
If you want better clients, if you need to improve your skills when it comes to talking with clients about price, if you want to have an easier time getting clients and consultations, there simply no way around it: you must increase your knowledge, understanding, and skill in these three key areas.
This kind of thing makes me cringe…
I popped into LinkedIn today and immediately came across a colleague’s post where she was sharing some client praise. Her client wrote:
“I’ve had 10 times more response from your social media design than I have from the one a graphic designer did for me and charged me 3 x the price.”
From the apparent value this client got, this colleague should have charged 3 x what she did. 😉
This is what I mean about people using our industry as cheap substitutes.
It’s so insulting for clients to rave about how little they paid, particularly when they know good and well what properly professional fees cost.
What this client said was the equivalent of shouting to everyone:
Hey, everybody, we’ve got a sucker over here! She practically gave away something that’s making me money and growing my business that I would have paid anyone else 3 times more for.
I have no doubt this colleague will eventually realize the value of her talents and start charging a more commensurate rate for the value that clients receive from her work… particularly if she keeps hearing “praise” like this.
With devaluing clients like that, who needs to earn a living from their work? 😉
This is unquestionably sage advice.
If you don’t love what you do, you aren’t going to do great work.
And you’re going to hate doing it.
You can’t do right by your clients or live your best life that way.
But there are two important important ideas missing here:
Without setting the foundations for these things, it’s inevitable that you will come to dread your work.
In taking care of yourself first, that means pricing profitably, making sure you are charging enough so that you are earning comfortably and your business is sustainable.
You can’t take great care of your clients if you are stressed out about money or constantly preoccupied with needing to make more (because you haven’t priced properly in the first place).
Pricing profitably allows you to do your best work for clients and give them your best attention.
You also need to set the stage to do great work.
That means setting standards and having boundaries, and establishing policies, procedures and protocols that create the conditions to support these things.
What level of quality is important to you as well as your clients?
Breakneck speed is not a sustainable pace. You’ll need to set expectations around turn-around times that give you plenty of breathing room.
What do you need from clients to feel valued and appreciated?
Are those the kind of clients you are choosing to work with?
Are you loving what you do right now? Are you loving the way you are doing it?
What do you want to leave behind in 2016? What do you want more of this year? What do you want do differently moving forward?
Ever hear a client utter these words?
It’s probably the most grating sentence in our industry today.
But what if you knew exactly how to respond?
What if you offered your services in a way that didn’t focus whatsoever on hourly rates?
Wouldn’t that be a total game changer?
It’s not so annoying when you actually begin to love responding to that question (or when you no longer get it in the first place). 
…If you frequently encounter price resistance with clients and want to know what to do about it;
…If you have trouble getting clients to commit;
…If you struggle with articulating your value to clients, talking about your fees, and feeling confident about them;
…If you find the whole topic of pricing difficult, I have the solution!
It’s my value-priced packaging and pricing guide, How to Price and Package Your Support Based on Hours & Expertise — NOT Selling Hours
This guide will show you how to:
…all without discounting, bargaining, or justifying your fees whatsoever!
I came across something utterly heartbreaking a few weeks ago.
I’ve been sitting on it for awhile, going back and forth about whether or not to have a conversation around it.
I never want to discourage anyone from this business or have anyone take things the wrong way. Because if you set things up right, it is an AMAZING business and lifestyle.
However, it’s a cold, hard truth that no one ever talks about in our industry.
And the problem with not talking about things that are uncomfortable, that aren’t all “rah, rah, kumbaya” all the time, is that you can’t fix what you don’t acknowledge.
What was this thing I came across? An ad for a “Virtual Assistant Business For Sale.”
And what is this cold, hard truth I speak of? It’s that most people in our industry are not profitable and not making the kind of money they can actually live on.
You see, the sad thing about this ad is that it isn’t an exception. It’s actually a very accurate example reflective of what most of the businesses in our industry look like.
Now, before I dissect this for you, I first want to make it absolutely clear: It is not that people can’t make more money in our kind of business; they absolutely can! YOU absolutely can!
It’s simply that they are being taught by the industry at large in all the worst possible ways to price, operate and market themselves (like calling yourself a “virtual assistant”). And it’s keeping them poor, overworked and overwhelmed.
The fortunate thing is that YOU always have the possibility to learn better so that your business can do better for you.
And that always benefits your clients because you can’t take good care of others if your needs aren’t taken care of first.
Here is the ad:
Let’s examine the problematic issues here:
Don’t misunderstand me. This examination is in no way a denigration of the business’s owner.
Rather, it’s utterly heartbreaking to me that they have made so little money working with too many clients with basically no commitment and constant churn. I wish I’d had the opportunity to help them early on.
When we talk about these things, there are always a certain number of people who don’t understand why it’s so important to have these conversations.
But bringing this consciousness to the fore is integral to being able to improve things so you can better earn in your own business.
It’s why I’m always talking about money, how you are marketing and positioning your business and brand, how not charging profitably sets you up for failure, about how the expectations and perceptions you create in clients directly affect your ability to charge properly and earn well.
These are the topics that will make or break your business.
It’s this fundamental business education — and not the latest, greatest software or tools — that is key to creating a profitable, sustainable business where you can get, work with and keep great clients (clients worth having who value you, not cheapos looking for a free handout), make great money and that works around and enriches your life and what’s important to you (instead of the business running you).
What could this person have done differently?
I have a couple of complimentary (as in free) business-building tools that shed a ton more light on all of this and will help you course-correct in your own business. If you don’t have them yet, be sure to go get them now.
***
How about you? Why did you go into this business? I’m assuming a large part of it is that you love putting your administrative talents to use and helping clients and truly making a difference in their businesses and lives.
I can’t imagine that it gives anyone joy to be broke and working too hard for too little money. So over and above that, how do you want your own life enriched and improved by owning and running your own business? What are your money aspirations? What does “profitable” and “financially successful” mean to you?
Hi Danielle:
I wanted to know if you had ever felt what I call “pricing remorse” when you were starting out? Let me explain. A colleague recently contacted me to help with a project. After receiving all the information and discussing the details, I initially felt the project was too small and not really worth my time. Instead, I decided to help. I sent the colleague my pricing (using your pricing guide, I calculated what I felt was reasonable for my time & effort) and project requirements. Shortly after, the colleague graciously thanked me and declined. This left me feeling a bit shocked, but also kind of guilty. I started to doubt myself and the questions began to flow. Was I asking too much? Should I have asked for more information? Did I not do my job to convey my skills properly? During our conversation, did I come off as an apprentice? Was this the unideal or cheap client Danielle spoke about? So on and so on. I heard you talking in my head saying, “Don’t devalue yourself” but I’m still left with a bit of guilt. Any thoughts/suggestions, as always, are greatly appreciated. —Name withheld by request
Thanks for your question.
It’s been so long ago, I don’t remember if I had “pricing remorse” per se. But I of course had my own learning curve when I first started out, definitely.
When I was new, I was charging waaaaay too little. What I eventually realized is that instead of second-guessing what I was charging when I got rejections, I was talking to the wrong prospects in the first place. My fees weren’t the problem.
Once I started charging more, and got clear about who I was specifically looking to work with (i.e., my target market), I got better clients. This is practically an immutable law of business.
And I quit wasting time and energy on the wrong audience.
But let me tell ya, there were a whole lotta learning experiences in there before I figured all that out, lol.
So, first thing is I want you to know is these are perfectly normal growing pains in a new business. You’re figuring out where your footing is so there’s naturally going to be some feelings of being unsure of yourself.
Knowing that, I hope it will be easier for you to just embrace the unsureness, knowing that with each conversation and interaction you have with each potential client is going to help you get your business bearings and build your confidence. It’s all part of the journey.
I am a little unclear about what you’re really feeling. You mention “guilt,” but guilt over what? What do you have to feel guilty about? I’m not sure I’m understanding what you mean by guilt.
There’s nothing to feel guilty about in determing your fee and asking for it. There’s no wrongdoing in that.
Maybe what you mean is you feel rejection, that in reality you were hoping to get the project, and it hurt when they declined, and now you’re thinking should have asked for less. Is that more the case?
Either way, I do have some thoughts to help you explore all angles here.
First, before you let a rejection bring you down, we need to remember the situation were talking about. This was for a project, not a retained relationship of ongoing support.
And it was for a colleague, not an ideal client in your target market.
Always remember who you’re target market is. Colleagues are not your clients.
One of the reasons colleagues are not your clients is because we’ve got a whole lotta people in this industry who think they should be paying bake sale prices. These are not serious prospects. You can’t set your fees according to what non serious prospects want to pay.
So don’t fret over a situation that wasn’t even with someone in your target market for ongoing support in the first place.
My feeling is that our first instincts usually end up being the best. You gave her a price that you felt was right. All you’re doing now is second-guessing yourself. There’s no reason to do that over something that wasn’t even a real piece of business in the first place.
All of this does lead me to wonder, given that your initial reaction was that the project wasn’t of interest, why did you bother wasting your time then?
I mean, you are always free to do whatever you want in your business. Of course. At the same time, you always want to remember the standards you have set for yourself and your business. When we start stepping over our standards, trying to make a fit out of that which isn’t a fit, that’s when we create problems for ourselves.
Lastly, when it comes to pricing, and conducting consultations, and then having the pricing conversation with clients in a way that gets you more yeses, there are some tips I could give you, but they wouldn’t help you because you haven’t yet purchased my client consultation guide (GDE-03) or my pricing and packaging guide.
You wouldn’t have the right context and these are topics that are more involved than I can help you with here in this format.
You really need to invest in that learning if you want to grow from this situation and my guides are going to help you immensely with that. I’m really hoping you do that, for your benefit. Because when you get the knowledge and learning to navigate these conversations, you’re going to have a lot better results and more successes—in any kind of client scenario.
Dear Danielle:
I recently purchased your Value-Based Pricing & Packaging guide which I LOVE! I love where your head is at! I was tired of reading about, seeing, experiencing and potentially lining myself up for selling hours in my business. Your Value-Based Pricing model has given me a fresh and positive outlook for amazing client relationships to come. I understand that you can’t single-handedly put a finger on exact prices for everyone, but perhaps a ballpark figure in examples would help? Kind of where I’m at now. I totally get the Value-Based Pricing model now after reading, listening and watching your guide. I’ve organized my service line and am ready to price each offering and…I’m stuck! How is one to know how much each service block should cost?! I understand that expertise is a major factor, as well as determining what you need to make annually to survive based on your AWESOME Income & Pricing Calculator, but a bit of guidance surrounding actual ballpark figures would be a MASSIVE help, just to kick start the process. —NH
Thanks so much for your feedback. It is MUCH appreciated and I’m so glad my guide is helping you. 🙂
Regarding the ballpark figures, it is HIGHLY against U.S. antitrust laws to provide even ballpark figures.
We just aren’t allowed to do that in the U.S. Having any kind of conversations about setting fees within an industry (which constitutes price-fixing), it’s a very serious, prosecutable offense.
I know it sounds crazy because it seems like such an innocuous thing, and I know that we do see pricing conversations going on in the industry occasionally; however, that’s only because those people engaging in those conversations are ignorant of antitrust laws and the serious consequences involved.
When I first heard about antitrust and price-fixing in relation to our industry back in 2004 or so, I didn’t want to take anyone’s word for anything so I investigated myself.
I’m a firm believer in going straight to the source to get the facts, not hearsay and opinion from those who don’t know, so I spoke with our state attorney general office, as well as two federal attorneys with the U.S. Dept. of Justice Antitrust Division.
They assured me that talking about fees within one’s industry with colleagues was no small matter (e.g., how much to charge, starting prices, coming up with standardized fees), and those offenses are taken very seriously.
In fact, after explaining how new people in our industry didn’t know what to charge and that it was common to see conversations where colleagues were talking about how much to charge, etc., they started trying to get me to give them specifics, asking for names and where these discussions were taking place. They were not amused. It was very scary!
The bottom line is that we absolutely cannot have pricing conversations as it goes against our entire system of free and open competition and carries very serious criminal penalties if found to be engaging in them.
The other thing I wanted to mention is there is no “should” when it comes to pricing. It’s whatever you deem appropriate and well worth what you offer and the results and benefits you achieve for clients.
Of course, there are considerations to take into account when setting your fees. Here’s a blog post that might be some additional help to you with that:
How Do You Price Your Service?
Beyond basic business economics and practical matters (i.e., profitability), pricing is largely a marketing effort.
And what is marketing but simply the communication process of educating and informing your audience of would-be clients and illuminating for them what you do, who you do it for, how it helps them and all that they can expect to gain by working with you (as well as what they stand to lose if they don’t).
When you get good at articulating that value to potential clients and helping them to see and understand that value in the context of their own business and life, the sky is the limit with regard to what you can charge.
But only YOU can decide what that will be. No else is allowed to tell you, not even a ballpark starting point.
Dear Danielle:
I’m just starting my administrative support business and have really appreciated all of your blog advice and toolkit information. I have run into a slight issue with my first prospective client that I’m not sure how best to handle. She has requested assistance for an annual event she’s planning in late November. We’ve done the initial consultation and I believe we could work well together and there’s a lot of room for growth with her. I had explained that I don’t do hourly billing, but she asked about how many hours per month I would dedicate to her project so I said I estimated around 30 hours per month. I made clear that since I don’t keep strict track of minutes/hours worked that if I end up going over 30 hours a bit that she wouldn’t be billed any extra. I sent her my contract to sign (which didn’t list specific hours, but instead listed the support plan we had determined) and she sent me her contract that states “scope of work will require a minimum of 30 hours up to 48 hours per month.” I absolutely can’t go up to 48 hours a month as then my pricing would be way too low. Do you have any advice on how I should handle this? —Shannon D.
First let me say, none of what I’m going to explain is intended to make you feel bad or that you’re doing things “wrong.”
We were all new business owners once and all started from the same place where we didn’t really know what we were doing. There’s just going to be a learning curve no matter what and it doesn’t make you a dummy or anything like that. And you’re going to have a lot of trials and errors throughout the life of your business.
That said, when people ask ME for my advice, my expertise and my opinions, that’s exactly what they get. They don’t get a bunch of wishy washy “you are free to do whatever you want in your own business…” crap. Um, duh. I don’t think anyone here needs me to state the obvious.
And these discussions are helpful because even though you will still have a learning curve, they raise your consciousness and help you better understand and increase your business knowledge and education moving forward.
Okay, let’s dive in here…
The initial thing that strikes me is that you aren’t yet really clear about what business you’re in.
You say you’re starting your administrative support business, but this really isn’t administrative support. This is more like event management and support which is really a whole other business and industry.
And the reason it’s important for you to get clear about your business is because, well, it affects just about everything moving forward. You have to get clear about what you truly intend to do and be in business if you’re ever going to get any traction.
If I’m a plumber and someone comes to me to fix their car, am I going to take on that work? Why would I do that? Just for the money? How does it serve my business to dillute my energies on work I’m not in business to do and may not have the expertise for? How does that serve the client if I’m really not in business to do that work? Is it ethical for me to take money for something I’m not really qualified to do?
So if you’re going to be a plumber, be a plumber. And direct clients who come to you for things you’re not in business to do to the right professionals. Otherwise, you’ll be spinning your wheels forever.
The other thing I get the feeling you’re not quite clear about is that this is project work, not administrative support.
Granted, it’s over the course of several months, but it’s a project nonetheless because there is a specific ending (the culmination of the event).
Administrative support on the other hand is the collection of tasks, functions and roles that require ongoing attention, management and maintenance throughout the life of the business. Administration isn’t an event, it’s an ongoing relationship. That relationship IS the “product” (so to speak) that you are offering when you are seeking retainer clients.
Now, there’s nothing wrong with taking on project work on the side if you so choose. But it’s very important that you do so consciously, not blindly.
That’s important because here is what tends to happen otherwise:
People in our industry want to have a retainer-based practice with clients who pay a monthly fee in advance every month. However, they end up focusing on and distracting themselves with project-based work instead which is a never-ending hamster wheel that keeps them from ever building the business they really intend.
On top of that, by allowing clients to never commit, they never get the real kind of business they want and dream of.
As the adage goes, you will never get what you don’t ask for and expect.
So if you want a retainer-based practice, that’s really what you need to focus on. You’ll never get there picking pennies up on the ground from non-commital clients and their nickel and dime projects.
If you want retained clients providing administrative support, that’s what you have to expect and make it a standard around who qualifies for working with you. That should also added be on your Ideal Client Profile as an ideal characteristic:
“A client who is ready to commit to working together every month in an ongoing relationship of administrative support.”
Now, we come to the whole hours thing. And as our readers here won’t automatically know, your question initially related to my Value-Based Pricing & Packaging methodology.
So the thing you’re not seeing is that you’re still trying to sell hours.
However, with value-based pricing, there shouldn’t be any talk about hours.
Value-based pricing is about offering a solution and providing results. It’s also about certain values (or morals, for lack of a better synonym) around providing those things.
Let me try to explain:
You say you can only provide X hours per month, but the client wants you to commit to more than that.
Forgetting the fact that hours shouldn’t be what you’re selling, what kind of whole, complete solution can you provide if you are only willing to commit to doing the half the work that’s needed?
Because it’s not any kind of solution if you’re only going to provide something that’s half-baked.
I’m not sure why you would have priced at anything less than what you need to accomplish it. Why would you do that? (That’s probably a whole other great topic for conversation, lol).
I’m not saying you should overextend yourself. But value-based pricing and packaging is contingent upon (among other things) providing a REAL, WHOLE solution and result for clients. It doesn’t help them to sell them something that will only get them half there.
And you won’t create raving fans and testimonials that way either.
So, what needs to happen is that you need to have a REALLY thorough consultation so that you have a very clear idea of what work will be involved, what the client’s needs, expectations and goals are, what results and outcomes they’re looking for, and then price THAT at whatever it needs to be for you to accomplish those things, not the hours.
(And of course that sounds so simple. There is more to it than that, obviously, and my guide shows you exactly how to set parameters and determine what work falls into admin support and which things can be categorized as project work that you can charge for separately, as well as how to talk about pricing and present that information on your website and in other conversations with prospects and clients. My guide also shows you what to talk about with clients INSTEAD of hours; when you do it the way I show you, they understand how much more beneficial and how much more they get from working together this way.)
But you have to be prepared to provide that solution. If you’re not, then it’s really not ethical to take that client on. A half solution is no solution at all.
As far as the whole contract thing, this is where your marketing and message, as well as what you call yourself, are so important because those are the things that are shaping client perceptions and expectations.
This client needs to be properly educated that it’s not her place to be changing your contract. Your contract is your contact. Clients either sign it or they go elsewhere. Obviously you would be more diplomatic, but that’s what it boils down to basically.
But the other thing is that if clients are consistently doing these kinds of things, it means you are not properly presenting yourself a business owner. Fixing that typically entails improving your content and marketing message on your website and framing yourself more like a business and independent professional.
That starts by not calling yourself an assistant, ever. 😉
Let me know if that helps and if you have more questions, feel free to post them in the comments.
