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Nobody likes talking about money with clients. Nobody. But the conversation gets a whole lot easier when you are confident in what you do, and what you’re worth. Right? Maintaining the needed level of self-assurance, though, might be the hardest part when talking price.
Well, at WordCamp Chicago last month, Chris Lema and Steve Zehngut offered their philosophies on fees during “15 Tweets About Pricing” — along with some great stories that were right on point. WordCamps are community-organized meetups where developers, coders, designers and “casual users” hone their skills and share advice on improving their businesses. Not exactly the place you’d expect practice tips for lawyers. But Lema, who is VP of Software Engineering at Emphasys Software and a popular blogger, and Zehngut, who heads Zeek.com, had advice on fee setting that any enterprising lawyer can use.
So then, what can a couple of WordPress “tech entrepreneurs” teach lawyers about pricing? These five confidence-builders stood out.
1. Set yourself apart. When just starting out, or when business slows, it’s tempting to cast a wide net in the work you’ll do. But whether it’s insecurity (“I’ll lose the rest of their business if I turn this bit down”) or fear (“If I don’t take this work now, I can’t pay next month’s bills), “full-service” is rarely a good long-term strategy. Especially for a small practice. Narrow your focus instead, and work on setting yourself apart. “When you aren’t different,” said Lema, “your price point goes down.” If people can’t tell one firm from the next, they only know to compare on price — and the low price usually wins. “It’s all about differentiation: You need people to know that when they need a specific kind of help, you are the one to give it to them.” Do that, and your rates should rise. As Sally Schmidt writes here, differentiating yourself can be one of the most effective ways for a firm to build business.
2. Have a price sheet. “If you don’t have a rate card, you need to develop one, and here’s why: It will give you the confidence to have the conversation with the customer,” said Lema. Knowing your rates and actually writing them down — in one place, with all your hourly, flat or alternative options included — will strengthen your resolve when writing proposals, and keep you from wavering in negotiations. Jared Correia explains here how a fee schedule increases your chances of earning what you’re worth.
3. You’ll profit best when people know how and when to hire you. So you want to be very clear about what you do, who you do it with and at what rate — and be able to articulate that clearly. Once you are able to do that, said Lema, you will have the confidence to say, “I’m expensive, but you will know exactly when you need me … so that money will never be wasted.”
4. Avoid yes/no options. It’s human nature. People like to be given multiple options to choose from. So instead of one fee proposal, would it make sense to recommend three different pricing options to your client — perhaps hourly, flat fee or retainer? “Now they have the opportunity to say ‘Yes’ to one of three options, instead of just ‘No,'” said Lema. “The more options, the less likely their choice will be ‘No.'”
5. Never answer a non-question. Here’s a common trap. You quote your fee, and sure enough, somebody says, “Gee, I wasn’t expecting that” or “Gee, I wish we could get that down so we could fit it into this year’s budget. …” Instead of jumping in with an appeasement, another question or (no!) a lower bid, Lema said, “I’m going to wait until you ask me a question. I’m not speaking.” Sometimes it’s a long and awkward wait — but there is power in silence. “Of course someone is going to be uncomfortable with your fee and say they wish it was cheaper,” said Leman. “The point is to get to an agreement, and I’m not going to respond to a non-question.” It works.
Too nervous to raise your rates? Uncomfortable “selling” yourself? Better up your networking game. Of course, we all know networking is critical for building a steady referrals base, and that word-of-mouth marketing is still the best source of new clients. But Lema and Zehngut pointed to another bonus of networking — done well, it allows you to charge your optimal fee: “When other people are talking about you, you are pre-sold. Better yet, your clients are prequalified, because they already know what you are the best at,” said Zehngut.
“Referrals are strongest when they are narrowest.”
And those are the clients we all want: the ones who know your value and are willing to pay what you are worth.
Even if you’re not a WordPress groupie, you might enjoy listening to the livestream of Chris Lema’s pricing talk at WordCamp Miami, here.
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Advice on setting your annual billable rate increase — and how to tell your clients.November 19, 2018 0 0 0