Candy Messer - Thinking About Terms
How have Candy’s clients responded to fixed pricing? In month three, Candy talks about how fixed price agreements can be adapted to meet the needs and expectations of specific clients.
To view the additional videos about her, please see follow these links to Follow Candy Messer on her journey to value pricing, Month 2: Simplify my billing and Month 4: Setting reasonable goals.
I am starting to use these fixed price agreements for new clients who are coming in. I haven't really taken the time to go through my current clients. My new clients, most of them are reacting by just reading the agreement. It makes sense to them. They pick the package they want. They sign and return the agreement. Then we begin the work. I've had a few who wanted to change what's in the packages and kind of renegotiate the pricing. Try to get as much as they can for a smaller amount. I've had to have a few conversations explaining why what we do is valuable and it needs to be charged. Let them make their decision at that point on which package they want to choose.
I think what's changed the most for me is thinking about having different types of terms in the proposal. When you're doing fixed price agreements, you can have different down payments or if they had bad cash flows in certain months; Maybe it's a business that just has really bad months and then really good months, you actually cannot charge them for those slow months, and charge more in the busier months. Which of course I've never thought of that concept before.
I have been doing annual quotes. My concern was if someone sees this is the amount it's going to cost on an annual basis, that number might look a bit large and potentially even scare them away. Then he said "I can think of it as an annual amount in my mind but still present it to them on a monthly basis." I have had a few who have accepted the proposals I've done. I think a few may have been a little nervous with the price looking at it on an annual basis. I was glad to have the coaching call with him this week to clarify what he meant by that. I'm going to go back probably and still just quoted on a monthly basis in the long run.
My biggest challenge is actually figuring out the packages because it is on an individual basis. What does the client need? What am I going to put in the first package, the second package, and the third package? What is that pricing so that it's fair to the customer, but we're also hopefully not shortchanging ourselves
My next goal is to actually start analyzing my current customers. Start having those conversations with them. Seeing how we can start shifting them to those fixed price agreements. It'll be interesting to hear their feedback.
I think what has surprised me the most is how much time I'm actually taking to create these packages. It does take a while for me to think through what do I want to put in each one. What should the prices be? What do I want do I want to change to make the terms different? It might just be since it's so new process, trying to figure that out. In the long run, I know it's going to be a good thing.
What I've realized is that this is probably actually going to be shifting some of the customers that I'm serving. Ron had actually suggested I change minimum prices to be higher than what they are right now too. Which means some of the other customers I've been serving may not be ideal anymore. That's a little bit of a change that I'll have to figure out exactly what I want to do.