Consider Your Pricing

Here’s an example of how tricky amnesty programs can be.

A few weeks ago, I posted here about putting my Jumpstart Your Rainmaking program on sale.  It was Black Friday and I wanted to participate!  (Of course, most of the time, we think of “on sale” as pertaining to tangible goods.)  How many of us who sell professional services would ever think to put them “on sale”?  It’s not something I had ever considered before.  But let’s imagine it for a minute…how the billboard ads might read….

Multi-state sales tax consulting services…”Call to sign up for a multi-state nexus review in the next 24 hours, and I’ll cut my fees by 25%”

IT support: “For December only, we’ll give you all the support for half the price!”

Realtor: “Today only – Offer on your house? We’ll cut the commission by 15%”

Not likely. Right? So, I’m not advocating that we’d ever really be in the business of putting our services “on sale”.

So What About Pricing?

But it is important every now and then to consider pricing – even for service providers.  In my Rainmaking programs, I talk mostly about the steps we need to take to build the relationships that will build our pipelines. That’s because people do business with people they like and trust.  Pricing is certainly a factor. But if you are known, liked, and trusted, the fee details usually work themselves out.  That’s why it’s so important to nurture the relationships of our referral partners and target customers over time. Price becomes more of a factor if you are unknown to the purchaser.  Then, you may need to open the door by talking about price.  Unfortunately, then the discussion becomes more about your amazing consulting services being thought of as a commodity.  And we all hate to think about ourselves and our services as a commodity.

So, my general rule is to set a fair price and stick to it.  Value your rate per hour or profit margin and stay true to it.  Sure, it’s easy to consider dropping the price for a particular job because you really want it.  But it may open up a pattern of doing that, ultimately driving your pricing down below your comfort zone.  The hard part in this equation may be in finding the right price in the first place.  What is that “fair price”?  What factors should you consider?

  • Do you have competitors that do exactly what you do?  In your area?  Can you determine what they charge?   Usually, you can get a pretty good idea – particularly if you end up being on opposite ends of a proposal process.
  • Ask around. You probably don’t want to start by asking your current target customer, but maybe some colleagues at similar companies might have an idea of what a good “going rate” might be.
  • Industry groups and their publications. There is a lot of great information out there on-line.  Research your industry and try to get a feeling for a ballpark rate.  You may have to adjust for the cost of living in your community to get to the ultimate “right” number, but you should be able to get close.

I’ve been selling multi-state tax consulting services for many years, so I think I’ve got the pricing down on that.  Rainmaking webinars and rainmaking consulting?  Well, I’m still figuring that out.  By the way, I told my readers I’d let you know if the Black Friday sale worked.  It definitely appears so.  I’ve more than doubled the participants on my webinar this time, compared with prior sessions. While I’m still not sure I’m at the exact price point, I’m working through it.  Stay tuned!

 

Monika Miles is President of Miles Consulting Group, a firm specializing in multi-state tax consulting for middle market businesses.  Clients include technology, manufacturing, software and SaaS based companies doing businesses across state lines. Miles Consulting Group assists them in determining the sales tax and income tax ramifications of creating a taxable presence in a state and how to address these issues with the various states.  When she’s not assisting clients with multi-state tax issues, she passionately shares Rainmaking strategies with other professional services firms. Click here for more information.