"My Customers Love MeSo Much, They're
Trying To Kill Me"
By Cliff Ennico
www.creators.com
"I run a very successful marketing consulting business - frankly toosuccessful.nbsp; Because I work out of my home and have no significantoverhead, I charge less than half of my nearest competitor in thisarea.nbsp; Whenever I quote a job, the customer never complains - theyjust roll over and sign my standard contract.nbsp; Frankly, despite adifficult economy, I've got more work than I can deal with.nbsp; I amextremely popular, and my customers always refer me to other businessesin the area because I'm giving them the best deal in this area forthese services.
My problem is that I'm working my tail off - 80 to 90 hours a week mostweeks.nbsp; And while I'm paying my bills on time, I'm not able to putany money away for retirement and that really worries me.nbsp; I can'tafford to hire anyone to help me.nbsp; Even if I had time to take avacation - and believe me, I need one right now - I wouldn't be able toafford it.
I know I probably should raise my prices, but I'm afraid I'm going tolose too much business.nbsp; Is there any way out of this dilemma?"
You know you are not charging enough for your services when thecustomers don't bother to argue over your service proposals, contractsor invoices.nbsp; Afraid they will lose a deal that's "too good to betrue" by looking a "gift horse in the mouth," they just agree to yourterms without comment.nbsp; Be assured that the minute you leave theiroffices they are doing "high fives", breaking out the vintage claret,and snarking about your naivete and lack of experience in business.
While as a home based entrepreneur you want to keep your overhead andother costs at rock bottom, enabling you to charge lower fees than yourbrick and mortar competitors, you want to be sure you are chargingenough so:
you can make a decentliving, enough to compensate you for the fact that you are working 24/7unlike many of your competitors; and
you are happy with both yourwork and your lifestyle, not grinding your teeth every night over howyour customers don't appreciate your true worth.
If you make a habit of giving yourcustomers too good a deal, two things will inevitably happen sooner orlater:nbsp; you will become physically and mentally exhausted; and youwill end up hating your customers for putting you in a position ofindentured servitude (when after all it's entirely your fault).
Here are some tips to make sure that you are getting what you deservewhile still remaining competitive:
never charge less than 90%of what your closest competitor charges - your customers are stillgetting a good deal, and you are not leaving too much money on thetable; and
make sure you are chargingenough to enable you to live comfortably in your area - if you need$200,000 a year to put your kids through college and live an uppermiddle class existence in your community, then making $150,000 a yearjust won't cut it even though a lot of folks elsewhere in the countrywould gladly settle for that.
You can raise your prices now fornew clients, but what about your existing ones?nbsp; Once clients getused to paying a certain amount for your services, they squeal likestuck pigs when you increase your rates.nbsp; Here are a couple of"stealth" tricks for raising your prices for existing clients withoutbeing too obvious about it:
charge "flat fees" that areat least 125% of what you would charge for doing the same job on anhourly or "per diem" basis (you would be amazed how many customers willaccept a higher overall fee in exchange for the security of knowingwhat the exact amount of your bill will be); and
consider charging a "premiumfee" for projects that are going to eat up a lot of your time, forevening/weekend work, or for other "special access" a client demands(for example, I don't give my cellphone number to any client that isn'twilling to pay a minimum $25,000 for legal services each year - ifthey're going to bust my chops on a Sunday afternoon they should beprepared to pay my home mortgage each month).
Whenever you "sell yourself short"by not charging enough for your services, it's always due to a lack ofconfidence on your part.nbsp; If the customer doesn't call you backwhen you quote them a fee, that's bad news.nbsp; But it's also badnews if they don't try to negotiate at least a little bit.nbsp; Whenthe customer winces slightly when they see your proposal, contract orinvoice, but signs anyway after asking a couple of questions, that'swhen you know "the price is right."nbsp; Don't settle for a pennyless.
Cliff Ennico (
cennico@legalcareer.com
)is a syndicated columnist, author and former host of the PBS televisionseries 'Money Hunt'. This column is no substitute for legal, tax orfinancial advice, which can be furnished only by a qualifiedprofessional licensed in your state. To find out more about CliffEnnico and other Creators Syndicate writers and cartoonists, visit ourWeb page at
www.creators.com
.COPYRIGHT 2009 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE,INC. Permission granted for use on DrLaura.com.
