Do You Resolve to Raise Your Fees in January?

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Do You Resolve to Raise Your Fees in January?

The calendar turns and companies think they should change/increase their fees or rate structure. After all, another year has gone by, its time, they think.

What does this even mean? The calendar drives your pricing? That there’s something magical about the calendar year that creates a rationale for higher fees or prices?

The Law Firm: “It’s the New Year, Why Not?”

I recall the lawyer who told me over drinks one December that on Jan. 1 she was raising her rates. I asked why and she shrugged. “It’s the new year, why not?” I asked how much, and she said just a few percent, maybe 3 or 4.

Three or four percent is so little it hardly makes sense. It’s so little that it won’t increase the firm’s revenue much, and it’s so little that most clients won’t even notice. Maybe that was her point.

But…she is a brilliant lawyer in her field, and each year the difficulty of her cases increases, and she makes a bigger and bigger difference to her clients.

“You should definitely charge more,” I said, “not because it’s the new year but because you deliver ever greater life changing value.”

“Aha!” she said. That was the first time she got the point of Value Based Pricing. She phased in Value Based Pricing and has attracted clients with increasingly significant needs that she addresses successfully.

The Subject Matter Expert: “We Raise Our Fees Every Three years”

There’s the subject matter expert, who told me that his company would raise its rates the coming year because “we raise our rates every three years.”

What?

He didn’t really know why. The previous owner did it and he never changed it.

Imagine that you’re a subject matter expert—which by definition means that you and your staff are always up to date and doing groundbreaking work—and yet you let the calendar drive your pricing!

I admit I reacted with shock over this.

When I regained my composure, we talked. Most of the time his firm’s work resulted in significant cost savings or a marked increase in revenue as his clients complied with regulations.

Their hourly rates reflected none of the life changing value they delivered time after time.

But he was afraid to even raise their rates yearly. And he was quite sure they couldn’t adopt value based pricing. What would the clients think?

We dealt with his objections and concerns one by one.

Over a few weeks, he learned more and more and one day told me he was COMMITTED to Value Based Pricing.

The six weeks we spent (about 15 hours total) going through the 4 steps to PREPARE were eye opening to him and his associates.

More times than they could count, they would exclaim that they never realized how much value they deliver to clients. Literally hundreds of thousands of dollars worth, which is life changing for their clients.

By the end of that step, they were excited. Within 6 months they’d had the one-to-one talks with their clients, had revamped their marketing, and modified the internal systems to accommodate Value Based Pricing. They were on their way.

One year later the owner and associates celebrated their success. They’d increased revenue from $2.7 million to 3.5 million (nearly 30%), with most of the same clients and the same staff.

These Stories Could Be Your Stories

I share these stories because these companies are very much like yours. Privately owned, with the Owner/Founder filling the role of CEO. They are known and valued for their ever-increasing expertise and ability to deliver life changing value to their clients again and again.

They were stuck with the belief that the time of the year dictated when they could raise their fees. They were afraid clients would object if they raised them very much.

Now they know how to describe the life changing value they deliver. They have clients who want that life changing value and are willing--even happy--to pay for it.

If you’d like to get unstuck from your thinking about fees and calendar years, hit Reply or text UNSTUCK to 703-801-0345.

Your new fees are only a phone call away.

What's Holding You Back--Really?

Lack of confidence that your firm delivers value that's worth high fees?
Going against the conventional wisdom of your industry or fellow owners?
Fear that clients and customers will go elsewhere?
Something you can't even put into words?

Every company faces obstacles that hold them back. There are as many reasons as there are companies.

You can stay stuck or you can choose to do something.

You know, from my book Tinker, that I believe in taking steps, especially small ones, to try new things.

Yours is a KNOWLEDGE firm!

Unlike companies with goods and inventory, your risks are low. You won't have to spend much money to experiment with a new idea for a short period of time. You don't need weeks or months of lead time. You don't need new employees.

If you really want 2022 to be a year of GROWTH trust your hunches and do your experiments. At the very least you will learn what works and what doesn't.

At the best, you'll make something new, successful, and lasting.

If you want some inspiration, read my book Tinker-How Smart Business Owners Develop Creative ideas for True Growth. It's available here.