By Robin Robins, President, Technology Marketing Toolkit, Inc.
#1: Simply raise your rates. Pretty ingenious, huh? That’s why I get paid the big bucks. Just type up a simple letter explaining that on X date, your rates are going up. You don’t need to apologize or get a note from your mother. Just do it. The world will not come to an end and your clients will not picket your business. In most cases, you will only get a mild response and you won’t lose any clients. It is only you that believes your clients won’t pay more. To date, not one client of mine lost a client over this – and in the RARE occasion this happens, it has always been a bad customer they should have fired a long time ago anyway.
#2: Price increase alert with up-sell to managed services. In a letter or e-mail, alert your clients that your rates are going up; however, offer to lock in their current on-site rate if they sign up on a managed service agreement. Here’s another way of doing this: announce a price increase for on-site rates, but offer remote support at the same rate they are used to paying. This would enable you to charge the same rate for remote repairs that you are charging for on-site services now, while increasing your on-site rates a few points.
#3: Create a new product or service category and charge more for it. At my suggestion, Luke Walling of Walling Data Systems recently implemented an emergency “while you wait” service that is about 30% more than his standard rate. He didn’t think anyone would buy it. He’s since discovered that not only are people buying it, but the people that do are far more grateful for the service! You could create a VIP Client rate that guarantees a priority response. The travel industry has been doing this for years with first class upgrades and VIP rooms with a view. When you think about it, most upgrades do not give you all that much, yet people gladly pay 20% – 50% more for them.
Bottom line is that EVERY product or service can have a “deluxe” or “first class” version. You could also create a VIP Client Club of business owners or IT professionals who view technology as a strategic advantage, and who want to network with other like-minded professionals. You then become the hub for all networking and communications and charge a membership rate. Quick Note: Whenever you create a proposal for a client, start by talking about the “Cadillac” version of the solution for two reasons. First, some clients may actually go for it giving you a nice boost in revenue and profit for that particular project. Second, it will act as a contrast to the “normal” price for the service. ALWAYS START BY GIVING THE HIGHEST PRICE FIRST.
#4. Reduce the current services you are providing. This is NOT my preferred way of getting more money for your services, but it is one way of going about it. For example, you could alert your clients that free phone support is no longer offered UNLESS you are on a support agreement (see #2). Newer clients will be less affected by this than old clients that already have expectations set.
#5: Tier your consultants’ fees and charge more for a client to see YOU instead of one of your techs. Attorneys have been successfully doing this for years. You’ll pay MORE to have the senior partners in the firm work on your case over the junior attorneys or paralegals. If you don’t have any technicians working for you, tier the cost of your services depending on the expertise needed. General network support gets billed at $125 per hour while custom development work gets billed at $150 per hour.
#6: Sell “bundled” services for a flat rate instead of time and materials. Bundling your services makes a lot of sense for several reasons. First, it focuses the client on the value of the result you are producing and not your hourly rate. Second, it makes it a lot more difficult to shop you on price. Third, if you have your act together, you should be able to get a higher rate per hour. For example, if you know how to upgrade a network faster than most IT consultants, charging by the hour would lower your profitability and gross revenue. If you learn to sell on value (not price), you’ll actually make more money on every project. However, only a few of my clients have truly embraced this concept because most have a lot of emotional baggage about charging top dollar for their services. They believe that the clients in their area are somehow “different”, too cheap, unwilling to invest in technology, etc., when the truth is, they are not selling it properly. They aren’t building value and giving the client a feeling of supreme confidence in choosing them – and THAT is why they aren’t charging more.
Dedicated to your success,