Your education prepared you to be employed, rather than self-employed. So, you spend countless hours thinking about raising your rates. But, you keep them where they are because you’re not sure how.
Because of that, the decision to finally raise your rates is gut-wrenching.
That’s exactly what Julie – a bookkeeper – experiences. She offers à la carte services, following the traditional hourly billing model.
The “Work with Me” page on her website lists about 30 different services. Her website fails to grab the viewer’s attention. Nothing remarkable stands out.
Marketing doesn’t interest her. And, that’s okay. On the other hand, Julie wants to raise her rates. She’s been thinking about it for two years. Although she’s aware of value based pricing and offering packages, nothing’s happened.
“I’m now turning away new clients,” Julie said. “I’m maxed out, regularly working sixty hours a week. And, I’m tired.”
Her current set up limits her income. When I asked about her social life and exercise, she laughed. Work has replaced time with friends, or going for a run. Unfortunately, it’s a common problem that I hear.
The Upper limit
Like many of my clients, Julie’s facing an upper-limit problem. Her business reflects her hard work. Wearing all the hats in her business got her to this point of success. But, she’s now maxed out. The cost of continuing to operate like this is way too high.
I firmly believe your business needs to support your lifestyle. The value-based pricing solution untangles her time from her income. Her body physically relaxed when I shared the plan to reclaim her personal life and increase her income.
Thinking, thinking, thinking consumes time and drains your energy. As a result, you tolerate the status quo for way too long because change feels risky. The transition from thinking to action actually offers relief. Something internal shifts when you finally decide to get it done.
Julie admits she undercharged for her advisory services because she didn’t know how to price it.
Her most valuable asset – her knowledge – was buried among her general service offerings. Basically, her clients took her business development recommendations for granted. Once Julie values her expertise, her clients will value it, too.
Mental blocks to packaging your services
Not knowing how to transition from an hourly rate to value-based pricing is the biggest hurdle. First, packaging her services is counter-intuitive.
Like most hard-working bookkeepers, Julie maintains a high standard for herself. But, listing every single service overwhelms clients. They’re coming to her for solutions, not a laundry list of services.
The fear of losing clients stops her from doing things differently.
Fortunately, ideal clients realize the value of her expertise. Those clients actually prefer packages to hourly billing. They choose the package that best serves their needs. Plus, the price is agreed upon before she starts the work.
How to package your services
Think from your clients’ point of view. Don’t solely list the services you provide in each package. Julie’s homework is to think from her client’s point of view.
Questions to ask include:
- What problems do you solve for your clients?
- How will this impact their business?
- Why choose you? What do you offer that your competitors don’t?
- How do the multiple services you provide work together for optimal results?
Packages emphasize the results, rather than the work she does. The question of how her service changes her client’s business for the better is more important than the tasks she does and the tools she uses.
Become their trusted advisor. Like most bookkeepers, Julie doesn’t enjoy the sales part. We discussed how to enroll clients without ever pitching them. Discovering their needs, rather than talking about her service, establishes trust and authority. Trusted advisors understand their clients’ deepest concerns, offer the right solutions and utilize the necessary tools to get the job done.
Eliminate what doesn’t serve them. Julie doesn’t need to list all 30 services in her packages.
The first step to package your services:
- List all the services you offer. Yes, all of them.
- Remove the ones that seem redundant or frivolous.
- Eliminate the services you don’t enjoy doing.
- Some services are primary and others are secondary.
- Highlight the primary services.
- Place the tasks, or secondary services, under the appropriate primary service.
Clarify your boundaries. Rather than adapt to a traditional model, create the business that best fits your lifestyle. You don’t have to be all things to all people. Offer the services you enjoy most. Then, eliminate the ones that bore you.
Packages reduce scope creep. Develop a service agreement that clearly defines what’s included and what’s excluded before you begin working together. This educates potential clients about your system for dealing with change requests. It is better to clarify your boundaries in the beginning so that there is no misunderstanding later.
Shifting to value-based pricing is a proven strategy that attracts high-value clients. If you’ve been postponing this move because you’re not sure how to package your services and offer value-based pricing, then find a coach, mentor or associate to guide you through the process. This one move skyrockets your profitability.