Wednesday, February 09, 2005

What stops you from raising your rates?

I belong to an entrepreneur forum that meets once a month in downtown Toronto. We are all self-employed entrepreneurs, mainly consultants, who share ideas on self-development and business-building, and try to hold each other accountable for setting and achieving objectives. My program is affiliated with TEC Canada, The Executive Committee
http://www.tec-canada.com/

It’s a great system, and I suggest every entrepreneur try to find a similar group.

At our meeting this week, three members reported on a project entitled: “What’s stopping you from raising your fees?” They came up with amazing data that indicates most consultants could charge more – if they had the confidence and market awareness to do it.

They quoted one U.S. survey that asked clients whether they would pay their consultants more money if they asked, and almost all of them said Yes. They added, however, that they were not likely ever to volunteer that information to their consultants.

Marketing consultant Michael Hepworth (http://www.results-exchange.com/ ) then shared the results of a survey he conducted recently among Canadian companies. Name three things that prevent you from raising your fees, he asked. The results were thus:

Sense of my own value 26%
Competitor pricing 23%
Perceived value of services in the marketplace 14%
Protecting an existing client relationship 12%
Ability to truly communicate our value 6%
Client wants a low bid 5%
The economy 1%

The findings? What stops us from raising fees is rarely the client, and almost never the condition of the economy, but our own ignorance and fear – or what Hepworth called “head trash.”

Food for thought on a cold winter’s day.

2 comments:

Shane said...

So, are there any other strategies to decrease the rates, any links for more informative posts.
Gadget

EngagedEntrepreneur said...

It really is amazing how much our own internal negative commentary can hold us back in a business. In my experience, assuming that a client wants a low bid is a lose/lose situation -- either you end up not getting much out of the project, or the client assumes that you're not worth as much as someone who costs more and passes you over entirely.