The costs of many goods and services are rising fast. Should the prices you charge for the services you provide increase in 2012? Are you charging too little or too much? Or are your fees just about right?
What’s going up? Gasoline, food, hotel rooms, Starbucks coffee, airline tickets, rental real estate, postage stamps, Powerball tickets, Super Bowl TV spots and even the Grand Slam breakfast at Denny’s are all becoming costlier. Some of these will affect your cost of doing business.
If you are selling widgets and your supplier charges you 15% more, you can easily explain to customers your price increase. But if you provide a service—like Public Relations or other business consulting—customers may be resistant to a fee boost.
Do you need to increase your fees? Ask around. Some who provide services similar to yours may not be forthcoming about fees, but many will be. Prospects may be able to tell you what they have paid for such services recently. Compare your fees—and the quality of your work—to your competitors. You may need to make adjustments.
If you have provided your services to a client for several years at the same price, a modest increase should not cause upset—if the client is pleased with your results. It may be better to give notice of a fee increase—say, 60 or 90 days. You may also be able to increase your revenue from a particular client by increasing the volume of work you do for that client.
When pitching your services to a new client, propose working at a fee that is higher than what your current clients pay. Work to negotiate a fee that is good for you and for your new client.
It is vital to remember that fees are not always the determining factor as to whether you get and maintain a contract with a client. Your track record, your reputation and your personal interaction with your client are just as important. But if your record, rep and personal style are creating good demand for your work, your fees should reflect that.
Determining the true market value for your services is not always easy. But when you do make that determination, it’s money in the bank.