Bob Burg is a friend of Carol’s and mine. (He is the nicest guy you will ever meet.) There is a video of his that really hit home for me because I, like most service providers, struggle with pricing.
When you start out, and especially if you have worked for a consulting firm previously, it’s tempting to price your services by the hour. For some types of projects or services, that makes sense. For something that can be completed in a single session, or a single session with a quick follow-up, it’s fine to price that way. My career envisioning and interview question coaching sessions are priced like that – and it works well.
It’s no secret that I’ve struggled with how to price my career transition coaching. I was getting paid OK for my time – but it was not proportional to the value that I brought to my clients. They got a great new job and I got…well, not enough.
And it kept me in constant marketing mode, which I didn’t enjoy, because the dollar value of each client wasn’t high enough. I found myself not making as much money as I wanted, and unable to go deeper with the smaller number of hand-picked clients I wanted to work with.
Over the years, Carol and I had talked about different ways I could get a finder’s fee or some other kind of bonus when my clients received an offer. I couldn’t wrap my hands around how I would structure that – or position it to my clients.
After watching this video from Bob Burg for the tenth time on the difference between price and value, and why you need to focus on providing value, I had my lightbulb moment. That, in conjunction with an amazing client win, gave me the courage to restructure my pricing in a way that works incredibly well for me and my business. And my clients love it, too! As Bob says, “Money is an echo of value. It’s the thunder to value’s lightning.”
So what did I do? I created a structure where I get a small retainer of $100/month because I deserve a nice bottle of wine or two, and because it gets clients in the habit of paying. It also demonstrates that what I do has value. For career transition clients, the definition of success and the end goal is a job offer. When the client receives their offer, I get a bonus of 5% of their first-year gross salary.
Clients think that it’s a great arrangement because they have no doubt that I’m committed to their success. It’s a true win-win partnership. If they don’t get a great result, I don’t get the bonus.
So far, the results have been amazing. I’m back to loving working with my clients. And new-client enrollment is a breeze. As soon as I explain the arrangement, prospects sign up and become clients.
I don’t know anyone else who is doing this, and when I announced it in front of a group last month, I heard more than one gasp in the audience. I have turned the traditional model on its head.
Time will tell if this is a brilliant or boneheaded strategy. But I will share with you that I am having a lot of fun in my business right now. (If you know someone who needs this, there is more information here.)
So how can you align your pricing with the true value that you deliver to your clients? Is there a way that you could do the same work you’re doing – but make significantly more money and have less stress?
PS – This video is great. Well worth seven minutes of your time.