What’s Your Hourly Rate
Do you frequently get asked “What’s your hourly rate?” When you compete on price, you quickly answer with your prices. If your rate falls within their expectations, you talk further. If your pricing is outside of them, then they move on.
Not all entrepreneurs offer an hourly rate. If you separate your fees from time, then what do you say?
Culturally, we’ve been trained to quickly ask about pricing. In reality, it’s a hollow question that doesn’t offer any valuable, relevant information.
Responding to the dreaded pricing question too soon dismisses critical details. Blurt out your rate and you’re instantly judged. Making an important investment solely based on price is like buying a car without checking under the hood.
The Goldilocks Effect
Your rates are too low. Quoting a low rate often backfires. Low prices set off an alarm, causing some people to immediately disqualify you. They believe a low rate reflects the quality of your work.
One client shared his expectations regarding my pricing. He said, “If you had low rates, I never would have worked with you.”
You’re more expensive than I expected. Are you ready to stand by your rates, own your worth and not take it personally?
High rates mean your pricing will be outside of most people’s budgets. They refuse to pay high fees. So they move on, searching for someone else with lower rates.
An alternative does exist. Package your services with options ranging from do it yourself guidance to done for you involvement. This pricing strategy acknowledges the various clients you serve.
The right price. Did it ever occur to you that even when a client accepts your rate, you probably undersold yourself by a considerable margin? A client who runs a million dollar business proudly stated, “Every consult turns into a new client.” This proves her rates are too low. We then rolled up our sleeves to re-figure her pricing.
Your Hourly Rate is Unfair
Your hourly rate isn’t fair for you or for your client. Even if you share an hourly rate, they’re still in the dark about a total cost. Because of that, if you’re a fast worker with a high hourly rate, your final bill can be half as much as the person who works slow but quotes a lower rate.Your hourly rate isn’t fair for you or for your client. Renting your time overlooks the value of knowing how to solve your client’s problem. Read full post. #getpaidwhatyoureworth Click To Tweet
Renting your time overlooks the value of knowing how to solve your client’s problem. It is like hiring someone based on their accent instead of their expertise.
A direct answer to the hourly-rate question boxes you in. Let’s solve that right now.
Confidently Answer the “What’s your hourly rate” Question
- Ideal Response. Decide how you want to answer the dreaded hourly-rate question.
Consider these answers…
- “Let’s first talk about what you need.”
- “I offer a complimentary consultation first to find out exactly what you need.”
With these responses, they start describing the project in detail right way. Go ahead and gently interrupt them. Let them know the first step is to schedule a consult to talk further. Schedule your consult and share the necessary details.
- The Consultation. Ask great questions during the consultation.
Key questions to ask:
- What do they want to achieve?
- Where are things now?
- What are the obstacles and bottlenecks?
- What’s possible once the problem’s fixed?
Remember to listen carefully to their answers. Find out about their frustrations and bottlenecks. Assess the problem and the people. Can you solve the problem? Is this someone you want to work with?Choose to separate your fees from time. Value based pricing is a paradigm shift where you no longer compete on price. Read full post. #getpaidwhatyoureworth Click To Tweet
If they’re primarily seeking free or low cost solutions, let them go.
- Solution. After they answer your questions, share your solution. Don’t overwhelm them with too much detail. Instead, give them an overview.
- Options. Now you have enough information to discuss the various options and prices. Avoid the common mistake of offering only one solution. Give them options with various price points.
As you discuss the packages, highlight the benefits and outcome. It’s more important than the nitty-gritty, tactical steps.
What if They Keep Pushing
If the client keeps insisting that you give an hourly rate, you can respond along these lines:
“I don’t have an hourly rate since I focus on results. I’ll only discuss the price if I know I can solve this for you.”
If they continue to press you for your rate, they’re probably price sensitive. Don’t cave into the pressure. Decide to let them move on.
Separate Fees from Time
An hourly rate quote differs from a final cost. Instead of highlighting your expertise, they make a snap judgment based upon your pricing.
Confidently answer the question with an invitation for a consult to talk further. Then take the time to clarify their needs, decide whether you want to work with this person. If so, then discuss the various packages you offer
Choose to separate your fees from time. Value based pricing is a paradigm shift where you no longer compete on price. Instead you confidently emphasize your expertise and the value they receive.
Follow these recommendations for your business to be successful, and grow while keeping your passion alive. Are you tired of doing work for free because you don’t know how to charge for it? Discover how to get paid what you are worth and attract clients who understand your value. Right NOW claim your FREE RESOURCE to create value based pricing.