“It’s different here.  This is Maine and you can’t charge the same as you can in ________”. You fill in the blank.  Have you heard that one? If I’ve heard it once I’ve heard it a hundred times.

The statement is part true, I’ll admit.  This IS Maine.   

However, if you have done your homework, if you’ve developed a level of trust with your client and if your client - no matter where they are - if your client values your product or service to the same extent your clients in ____________ do, you can charge the same as you can in _____________.  If your customers won’t pay what you think your product or service is worth you’re blaming the person. Purchases are made based on perceived value, THEIR perception of value, not yours.  If your customer doesn’t perceive the value, they won’t make a purchase.  Period. 

So the question isn’t, “Why won’t they pay?”.  The question is, “Why is there a disconnect between your perceived value and the customer’s?”.

Let’s say you’re Jane Doe, an internationally recognized oil and gas attorney. 

Situation #1:  ExxonMobil wants to gain the approval of the Peruvian government to drill off their southern coast.  If they receive the approval to dig it would mean hundreds of billions of dollars to ExxonMobil and the company has asked you to assist them.  They’ve asked you to attend a 1 hour meeting they’ve scheduled between the CEO of ExxonMobil and the Peruvian government in an attempt to gain drilling approval.

Situation #2:  Murphy Oil, a small oil company in El Dorado, Arkansas is considering purchasing a Malaysian deep-water lease from Royal Dutch Shell.  This is a pretty standard transaction in the oil industry, however the services – about an hour to be exact - of an experienced oil and gas lawyer is still needed to finalize the documents.

The lawyer is the same in both situations; Jane Doe. The time requirement is the same in both situations; 60 minutes. Is the fee Jane charges the same?  No.  Why?  Because Jane’s fees aren’t based on the time she gives the company. Her fees are based on the value she gives the company.  Furthermore, the value isn’t what Jane perceives it to be. It’s what the company perceives they gain by hiring Jane.

Think: providing value – not providing time.

Let’s try another comparison.  You’re John Smith and you’ve relocated to Portland from Boston after 15 years as Vice President in State Street Bank’s retail advisory services division.  You’ve started your own consulting business with a specialty in helping retail businesses. 

Situation 3: In about 20 hours of consultation work, John is able to help his retail clients streamline their operations and maximize the sales per square foot so they see increased profits, on average, of 50%; some even more. 

Question:  What is John’s service worth?  $100/hour? $500/hour?  The answer is yes… and no. 

If you are a retail store owner and your annual profit averages about $3,000 net of your salary and all expenses, a 50% increase would be $1,500. While 50% is a good improvement in profitability, an investment of $100/hour or $2,000, not to mention $500/hour, wouldn’t be “worth it” to that client. 

On the other hand, if you’re LL Bean and your net annual profit is $500 million, a 50% increase means an additional $250 million.  I’m pretty certain that John’s 20 hours would be valued a lot more than $500 an hour and I’m sure John would be paid a lot more than $500/hour by LL Bean.

These scenarios are easy to grasp because value in these cases are easily expressed in dollars and dollars are the primary gage most businesses use in determining investment value.  If your product or service addresses the more “intangible” business challenges – those not easily translated into dollars, i.e. procrastination, lack of accountability, low moral, etc. - it’s important to do what you can to help your client put a dollar figure on the dollar “value” of what they will gain working with you; Or the flip side; what it will cost them if they do NOT work with you.    

No, dollars aren’t the only indicator of value.  In a highly competitive, small business marketplace where budgets are limited, it is a good place to start, however. 

Once you have developed a level of trust with your clients, value is the primary basis on which purchasing decisions are made. If you can communicate to the client that the value (the ROI-return on investment) they will receive by investing in your service or product will exceed the cost of that investment by a meaningful amount (meaningful to them) you’re almost certain to make a sale.

Remember to be Bold, express your value and target your marketing efforts well.  …and yes, your success does start with a vision.

Promotion Action is a program where service professionals establish and implement an action plan that will help differentiate them in a competitive and crowded marketplace.  By becoming recognized as an expert in your field your value proposition becomes less cost-centric.  The next Promotion Action program begins November 7 in South Portland, Maine.  If you’re not in the Greater Portland, Maine area, Promotion Action Teleclass begins November 15.  Link to www.PromotionAction.com for more information. 

Most service professionals, myself included, tend to start out thinking that if you just work hard enough, you’ll be successful. Unfortunately, it just isn't so. We often start our professional business believing that all we need to do is provide a good service, charge a "reasonable" fee and book "enough" of our time. But unless you do the math to prove or disprove your assumptions, you may be creating a business that is set up to fail.

Here's what can happen:
Andrea is a professional organizer. She sells her services to people who need help organizing their offices, garages, their lives. She charges $55 per hour, which she thought was the most anyone would be willing to pay for an organizing professional. Since her work is organizing her clients’ offices and homes, she travels to them.

Her average appointment is two hours long. Taking into consideration the travel time and a brief break for lunch or to return calls, etc. Andrea can realistically average only two appointments in one day. This means, on average, the maximum Andrea can earn in one day is $220. That’s not terrible, but in order for this to translate into meaningful annual revenue she needs to earn $220 five days a week; which further translates into Andrea booking ten different clients, all of whose schedules were managed to work with whatever times she had available, every week. Not likely, right?

Even if this scheduling did work, when would Andrea have the time to do the marketing required to land that many clients or the administrative upkeep to manage the business? More realistically, given a $55/hour charge, the average Andrea is likely to earn using this model is about $550 per week. After paying her taxes and business expenses is this enough to cover living expenses?

We new consultants, coaches, and other professionals almost always overestimate how much they can earn and underestimate the amount of time and money required to successfully market themselves. They also forget that they will have to cover not only their living costs and business expenses, but pay self-employment tax, buy their own health insurance, provide for their own retirement, and allow for unpaid vacation and sick time.

Here’s how Andrea changed her business, which took her from struggling to make a living to thriving. She began selling her time by the day instead of by the hour. She offered her clients a full-day “ship-shape” package that consisted of a morning site survey and consultation and then a “file, box or toss” session in the afternoon. Sometimes her assignment would be extended if her clients asked her to shop for organization systems and tools to help them stay organized after her visit. By charging $389 per day and scheduling three clients per week, she now earns over twice the amount she previously earned.

She also began offering monthly, one-day organization workshops as a way of marketing her services, giving prospective clients a chance to experience her work. The workshop has become a key source of new clients and referrals, and marketing the workshop turned out to be easier than marketing her personal services.

Networking, speaking, and writing articles furthered differentiated Andrea’s reputation as an organization expert, separating Andrea from the myriad of other people out there trying to do business as a professional organizer.

If earning a decent living as a solo-preneur professional seems impossible to you at times, ask yourself what you change about how you are marketing yourself, how much you are charging, and how you are packaging your services? Also, begin to look for ways you can enhance your reputation as an expert in your field. Selling your service is selling your expertise. As Jack Trout says, you have to “differentiate or die”.

Until then, Be BOLD. And remember, all success starts with a Bold Vision.

In May BoldVision will begin offering the 12-week course “Promotion Action Plan - Attract More Clients With Less Effort by Becoming Recognized as an Expert in Your Field” exclusively for self employed service professionals. For more information email info@boldvisionconsulting.com.

In June, Bold Vision Business Intensive program will be launched. The Business Intensive program is a series of 8 60-minute classes that will meet in person (South Portland, ME) and via teleconference once a month. Participants can sign up for a single class ($39) or for all 8 and receive a 25% discount ($234). Materials are included. For more information send an email to info@boldvisionconsulting.com.