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What Should I Charge?

What Should I Charge?

People ask me, "What should I charge?"

I say, "Ask your clients."

If they are respectable professionals you want as clients, they will be honest with you and give you a fair price based on their experience, their need, and their ability to pay. They will not try to undercut you.

And if you are a true professional, you will charge them a fair price and not try to overcharge them. You will not undercut yourself, either. You will base your price on two things: your value to their business, and the client's value to your own company. Your fee should always be based on the criterion of a good relationship. If it threatens the relationship, is it worth it?

You cannot base your price on your company policy or an annual raise, or what you're worth to your most lucrative corporate clients. You must base your price on the relationship with this one specific client and all your clients.

Shortly after I opened my business, I received a call from a chartered bank. They were experiencing difficulties with a team who managed world trading, and they needed someone to teach them a thing or two about communications. I was very excited about this opportunity. I shook their hands vigorously and we retired into a little room, where we discussed their needs and they told me the kind of written proposal they were looking for.

I listened carefully as these two women talked. I couldn't wait to sink my teeth into it. I proceeded to tell them how I would approach the project and then-poor naïve little me-I lowered my voice and almost whispered:

"I should tell you, though, that I'm not cheap. I charge $325 a day."

The two of them looked at each other and giggled.

"Did I say something funny?"

"When you submit your proposal, you had better charge us twice that, or the Manager won't look at it."

I stared at them, cleared my throat, and replied, "Certainly."

I "certainly" learned a lesson from that encounter. You don't charge a chartered bank the same fee you charge a non-profit organization. I also, unwittingly, had been given an opportunity to grow my business. When you meet a new client you have nothing to lose. Use it to take risks with your fees. Let them teach you what the going rate is, what they expect to pay. You might be pleasantly surprised.

Let clients raise your rates for you

If you provide superior service and maintain rich relationships with your clients, and help them succeed, a magical thing will happen. Your clients will raise your fees for you. You won't have to do a thing.

It takes time, but consistency and reliability are rare and valuable. If you continue to rise to the occasion when your clients need you, they will "tip" you the way diners tip servers after they have become sufficiently sloshed to feel very generous. "Here! Take another three thousand dollars, just for being so nice!" Well, not exactly that way. Here's what I mean. They will find ways to extend your contract. They will start asking why you charge less than the others, or why the others charge so much. They will refer you to other clients. They will give you different types of projects where you can be more creative about your fees.

This has happened to me a half-dozen times at least. People who enjoy working with you, and who cherish your service and your commitment, will do you important favours. I was discussing this phenomenon recently with a friend who provides production services for TV and film across North America, often for large movie-makers and other production companies. Richard has been charging such low prices compared to the competition that a client warned him, "If you don't raise your rates, my VP won't even look at you." When the invoices come in and the VP sees one company charging $185 per hour and Richard's company charging $45 per hour, the VP will get nervous about the gap and see Richard's company as far below standard. The client continued, "Richard, you've got to make it look like you're in the same game."

When a client tells you something like this, I have one word for you.

OBEY.

A consultant for almost 13 years, Laurie Soper has helped dozens of companies clarify their sales messages to enhance customer service, increase productivity, cut costs, and win big deals.

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