Archives For setting fees

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I am very excited about tomorrow’s free webinar on fees!  While spreadsheets and finances are not my favorite pass time, the idea of increasing margins and cutting losses is exciting!

If you have not signed up, do it now!

I prepared 7 well kept secrets to help you change your pricing models for 2012 – and I know they will help you increase profits if you follow them closely.  Let me hint at one important pricing concept right here to get us started…

Did you know that when you discount 20% on services, you give away 40%?  It might be obvious, but tomorrow I plan to show you several simple math problems that will explain where most resellers lose money over the course of a year, and how that affects not only the bottom line, but every sales person’s personal income (and eventually your company’s ability to deliver quality service to the customer!).  I’ll show you how, and what to do about it tomorrow at 1 PM, ET.  Make sure you put this on your schedule – one hour could change your entire financial outlook for 2012…

© 2012, David Stelzl


Photo by David Stelzl

The purpose of a sales presentation is to sell; to convince the prospect that you have a solution to a problem that they in fact have, and that you are the best problem solver around.  The fee in turn, must be commensurate with the value delivered.

But here’s the problem:  First, 95% of the possible prospects in your territory don’t necessarily agree that they have a problem – or at least have a problem that you specialize in solving.  Second, most presentations are informational, offering no compelling value.  They are not centered on solving a known problem.   The other 5% of the people out there admit they have a problem, but have no reason to believe your solution is any better than the next guy.   In this case you lack differentiation.

Since most presentations look pretty much the same, the client’s propensity is to continue doing business with the known quantity unless in incumbent’s price is severely undercut.   Don’t overestimate your brand or uniqueness based on things everyone has, or at least say they have.  Start treating your presentation as a commercial, or perhaps an infomercial.  Put more time into making a great presentation and you’ll waste less time on unqualified meetings.

© 2011, David Stelzl

Photo by David Stelzl

No matter how much value you represent, and no matter how well you communicate it, you will find that some prospects/clients, just can’t afford you.  In this economy, expect that number to grow within your current client base.  So what do  you do?

Move on!  But remember, every past client, every prospect, and those struggling to pay their bills right now, represent spokespeople for your company; expect them to pass on their experiences working with you.   So a couple of points are key here:

1. First, don’t be afraid to lose customers.  If it’s the economy, no problem, there are more customers out there.  On the other hand, if you have a service problem, fix it.  Over time, customers come and go, and hopefully your value grows (along with fees); while their business may be shrinking.

2. If they can’t afford you, you can’t afford them.  Don’t compromise to win a client that will continually struggle to make payment.  In the end, you lose, even if its just from the stress of waiting on payments.

3. Be prepared to refer them to a less expensive solution.  You want everyone you talk to, to perceive you as helpful, and wish they could do business with you.  One day they may be in a position to hire you, right now they are in a position to recommend you.  So keep a list of quality partners that target lower end markets.

4. Finally, don’t let your clients get behind in payments.  Extending credit may seem like you are doing them a favor, but you’re not.  Debt creates bondage… it adds stress to the relationship.

With this in mind, plan your solution strategy for 2011 based on the market you intend to serve.  Put brackets around the low and high end of your target, and serve them well.  Refer business to partners  that falls outside of your parameters, and charge for the value you deliver in your circle.  This is good business.

© 2010, David Stelzl