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January 05, 2010

Resolve to Let Clients Set Your Price

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I've been using my "You Decide" fill-in-the-blank invoice, for over a year now.  In that time, I've found time and time again that my clients pay me more than I would have charged them.  And, in situations where clients demand a fixed price, I'm quoting them much higher prices (coupled with a money-back guarantee) than I would have before my invoice experiment.

Even though I've been doing flat-fee work for almost a decade, I used to (even subconsciously) focus on the time it took me to do something.  Now, everything I do is focused on delivering the biggest "bang" for my clients, knowing that the "bucks" will come.  I don't track phone calls, preparation time or limit meetings, and I don't charge for materials, travel, meals or other expenses.  In short, I trust that my clients will take care of me if I take care of them -- and they always do.

In 2010, I'd encourage you to resolve to let your clients set your price -- at least once.  Ask a trusted client to list all the services they'd like you to provide for them.  Suggest unlimited phone calls, regular meetings, document reviews, etc.  Provide all these services to them for a month's time.  Then, ask them what they're willing to pay for all the work you've done.   

You may find your clients value your services more than you do.

Comments

Matt, I read your writings about this before. But, I am concerned on how this impacts repeat business. I am concerned about the negative emotional impact of a "pay what you think it's worth" model.

As a customer, I feel that this puts the onus on me. Rather than having a definite price, I have to figure out what the service was worth. It also puts pressure on me not to appear cheap, which is aggravation I do not need. As a result, I might pay more than what I think the service was worth; but, I would resent having done so. If there was an option of providing return business, I might go with a competitor that does not put me in this position.

I think a slight tweak relieves this pressure: present the customer with an invoice fully describing the services, time spent, and the final cost. However, at the end include a statement which reads, "this is the value we feel we provided. You can raise or lower this amount to whatever you think is fair.

This still freaks me out! But talking to you about it, I have to think this is a major selling point to your clients

Very cool. I'll give it a try for an upcoming proposal. Interested to see what happens!

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