How to Price Your Services
Thinking about your ideal client, consider the following:
Remember where you live is irrelevant to the client. It doesn’t matter to your client if you live in an expensive area and need to charge more. Because your feature is that you can work from anywhere, it can’t also be the reason why your prices are higher. The whole point of being virtual is so the client can get the best candidate from anywhere. If location becomes a factor, your client could easily find someone in another state or country with cheaper prices.
Consider the client’s fee structure. If your clients charge by the hour, use this as your guide. How much do they charge? If they make $150 an hour consulting and your fee is $50 an hour, that’s one-third of their revenue. Don’t forget their other expenses as well. However, if you know that your potential clients are booked solid and you’ll only be working five hours a week, then it becomes less of a factor. A client charging $100 an hour or less is not likely to hire you at $50 an hour because that’s half of their income before taxes and expenses. Either you need to lower your rate or change the type of client you want to work with.
Additionally, consider how the client views your hourly rate. Are they used to paying top dollar? Are you positioned to command your hourly rate? No matter what you charge, you should be able to present your prices with confidence. If you aren’t confident in your hourly rate, your prospective clients won’t be either. Practice telling people how much you charge per hour until you can do it without wanting to immediately discount the rate in your mind.
Know the mindset of a client that charges by the project. If your ideal client offers packages based on projects, take this into consideration. The mindset of someone who charges flat fees is they don’t like any surprises and appreciate all-inclusiveness. These types of clients are constantly concerned about hidden fees and bottom lines. They want to know everything they will get for their money, not everything you offer. This is the ceiling mindset.
For instance, when talking with two different VAs, one may offer an hourly rate and guestimate how much time it will take to complete a project. The other will offer a flat rate and tell the client everything included and how long it will take to complete. No client will ever think you’re going to complete something in less time than you will. They’re always worried it will take more time. If clients believe you should have completed a project in less time than you actually did, you still haven’t won them over. Make sure you are targeting the right client with your pricing.
It is much more likely this type of client will go with the second VA because he or she gives the client peace of mind—the client knows the ceiling limit. With the hourly virtual assistant, the client will constantly be worried about how many hours could be racked up and how long the project will take. The added benefit is the second VA appears to be the clear expert because only someone who has done it many times can give you firm dates, deadlines, and prices.
Consider this. One car mechanic charges $75 an hour and tells you it will take about an hour and a half of labor to repair your car, but he admits he really won’t know until he gets under the hood. Another mechanic says he could do the job for $150 out the door. Which one will you choose? I’d go with the latter mechanic because I know there won’t be any surprises or unforeseen costs. (Can you guess how I charge and pay for services?)
Your clients’ perception is their reality. Know how clients perceive your value. It’s your job to constantly make the connection between you and them. They are not going to do it on their own. Force the client to see you as the expert and as a VA who offers value by pricing accordingly.
Packaging Your Services
How your clients view your pricing is based on their perceived value. What you consider to be the most valuable part of your service might be completely different than what they consider to be the most valuable. When you itemize your services, you run the risk of oversharing and being scrutinized in a manner you wouldn’t be if you simply packaged your services together.
In the beginning you’ll likely have only one package. That is fine. Whether you have one package or multiple packages, you are asking your clients to self-identify the package that’s right for them based on their needs, not based on your price.
Far too often, packages are simply buy now or buy later. There is no win for the client. It is only a win for you because you get to charge more now rather than wait for payment later. However, when you know what your clients need at each stage of business, you show them what you’re offering isn’t just a package that costs more. It’s a package that meets them where they are in their business. Furthermore, you shouldn’t identify your packages as “A, B, C” or “Gold, Silver, Bronze” because those are ambiguous terms for your clients.
Here are three ways you might package services targeted toward a business coach:
Package 1 = Starter Package
For the business coach who is just starting out. You have an email list of 500 names or less. You need to create systems and processes for your new email leads, a newsletter to stay in touch with your current email list, a lead magnet, a campaign, and a funnel system to track where you convert leads into sales. Price $$$$. Priced as a one-time fee with a monthly maintenance package or as a monthly fee based on creating new campaigns, newsletters, and growing the email list.
Package 2 = Growth Package
For the business coach who has a backlog of clients waiting to work with her. You have an email list of at least 1,000 names. You need to create more personal systems and processes for your current, past, and future clients. You want to establish an online community (or manage an existing one) for current and past coaching clients. You need website updates and maintenance, billing and invoicing, appointment scheduling, and monthly newsletter support. Price $$$$. Priced as a recurring flat fee. This client is too busy to take over anything you create. He or she needs you to do the dirty work. Additionally, you could provide add-ons in the form of social media management, but only if you know how to convert followers into clients. If not, don’t offer it. Not coming through in that one area will affect how your other work is perceived.
Package 3 = Diversifying Your Income Streams
For the business coach who is looking to create online courses, prioritize speaking engagements, host boot camps or retreats, or write a book. You are ready to diversify your income streams through all or some of these ways. On top of the daily needs of email, invoicing, billing, and online community engagement, you need a VA to manage your projects and make sure nothing falls through the cracks. While your business continues to grow and you find yourself in demand, I will manage your current projects, forecast future needs, and be the go-to person for you, your clients, and those contacting you about speaking engagements and interviews. Price $$$$. Priced as a recurring flat fee. You will only be able to handle a few clients at this level so charge accordingly and appropriately.
Package 1 is your bread and butter. It is easily tailored to fit any coach, consultant, or the like who needs processes and systems put in place. The monthly maintenance is a great system to keep generating income and creates a win-win for the client. You should be able to duplicate the system and have a thriving business on this model alone.
Package 2 is the hardest package to sell. This client probably didn’t hire anyone early on and has been doing all the work. It’s much harder to pay someone else to do it now. Their mindset is a little harder to shift than someone who knew their investment paid off right from the beginning. You can plan to have more calls and follow-ups with this client than the others. It’s hard to find clients for this “middle” package. Either they think it’s still too early to need your services, or they feel they’re at the tipping point and need help now before it’s too late.
Package 3 is for your premium client, and this is easy to sell if you get the verbiage right for your ideal client. If you have a hard time selling this package, don’t look to the
price first. Instead, look at the verbiage. Most likely, a key ingredient is missing that lets the client know this package is the right one for them.
You’ll easily be able to keep track of which package is selling and which isn’t. If you offer a package and never sell it, get rid of it. As long as you hold on to that service, you’ll never make room for new opportunities. If you constantly upsell a package, keep it. Don’t get rid of what is working!
Here’s another reason you want your clients to identify services for themselves—they’re not necessarily going to identify VAs based on our selection of services. A long list of services offered by virtual assistants is meant to read like a menu. Pick what you want and let me know how I can help. The problem is your client doesn’t know it’s á la carte. Instead of selecting what they need, clients seem to focus on what they don’t need and dismiss the rest of your services. Your clients aren’t looking for something generic, they are looking for something specific. How do you overcome this? By speaking to your ideal client. A conversation between just the two of you. We’ll cover this in the next chapter.
Listing prices on your website comes down to two things—do you want to have a conversation or not? I sell my services based on conversations, so I don’t list my prices on my website. Potential clients want to speak with me, and I want to speak with them. My conversion rate is much higher after a consultation.
If you are not concerned about having conversations with clients and believe you have a click-to-buy business, then yes, list your prices on your website. Few VAs have this luxury in the beginning. I highly suggest not listing your prices and instead speak directly with your potential clients. What you gain from every conversation in the beginning is far more valuable than selling one service or package. If you do it right, you’ll have succeeded in both.
Pricing Is Not a Competition
I never could have commanded my current income when I first started as a VA. I’m a very competitive person, so I found myself competing with other VAs who I thought were like me. This turned out to be a race to the bottom. Your competitors don’t determine your pricing.
I remember the first time I ever charged to match a client with a VA. It was freeing in a way I didn’t expect. For the first time, I had no idea what to charge because I didn’t know anyone else who was providing this service. When he asked my price, I blurted out, “$599.” Why? Because I had just received a bill for the same amount. Afterward I thought about how cheesy it sounded, and I promised myself I would never do that again.
With no known competition and no prices to copy, I finally started pricing my services the right way. I based my pricing on what my ideal client would happily pay, taking into consideration my time, efforts, lifestyle choices, and worst case scenario. When I got real about my time, my value, and how many clients I could serve at once, I finally was charging what I was worth. As I worked through the process, I began offering tiered services and packages for clients to self-identify. I worked through trial and error, and I followed the money trail. I was able to raise my prices quickly with both confidence and success.
One thing I knew for sure was I was going for quality not quantity. I was going to be Tiffany not Walmart, and that is the type of client I was going to attract as well. Sure, Walmart will serve far more clients, but it’s because they have to. Plus, I’ll give you a secret tip—the more services you offer, the more discounted prices your clients think you should offer. When you position yourself as a one-stop shop, people naturally want a discount. When you position yourself as a boutique, your clients will expect to pay more. Never forget that your price also dictates the service.
Jeffrey Shaw, author of Lingo: Discover Your Ideal Customer’s Secret Language and Make Your Business Irresistible, started his career as a photographer before becoming a coach, podcast host, speaker, and author. When he transitioned into the luxury market, his competitors were not other photographers, they were painters. By positioning his pricing to create the perception that his photos were masterpieces with an exact likeness, he was able to capture the market. He recognized the value he was bringing to his clients, and he set his prices strategically, not emotionally.
As virtual assistants, we are at a great advantage. We can be very nimble. Offer new services as soon as they come up, change your price structure as needed, and create a new business model every month until you find one that works. Don’t be discouraged. Be smart when it comes to pricing, and your clients will pay you for it.
Collecting Payments
To your clients, receiving bills at the end of the month is like getting a credit card bill after a big vacation. Your client just took the vacation of a lifetime and a month later when they open their credit card bill, they forgot the nice hotel where they stayed, the tasty meals, the amazing excursions, and the memorable souvenirs. All they see is the large total at the bottom of the bill. They can’t even remember what the beach smells like anymore. This is how they feel when you send your bill at the end of the month.
On the reverse end of the spectrum, when your monthly fee is paid upfront, the client isn’t worried about racking up hours or getting surprises at the end of the month. This is like resort pricing. It’s all inclusive. Nothing to come back and haunt them later.
If you aren’t going to get paid upfront, you need to set up weekly payments. This is for the benefit of both you and your client. If you provide technical and project support, the minimum amount to charge upfront is half. After that you can charge in project increments.
Another downside to hourly pricing is that the client will naturally scrutinize an itemized bill. That’s what most of us do with an itemized bill. Do you ever look over the details of a bill with a flat rate? Probably not. As long as it’s the same amount, you just keep paying. Your clients will do the same.
Sell is Not a Four-Letter Word
Oh, the dreaded “sell” word! Why don’t we like sales? It probably has to do with the stereotypes that come along with the idea of selling. Think “used car salesman.” We don’t like when people offer us what we don’t need.
News flash! This is your business. You get to run it any way you’d like! You don’t have to be salesy or dishonest or anything else you don’t like in a salesperson. Plus, because you know who you’re selling to and the value you bring to them, you don’t have to worry about coming across as pushy or obnoxious. You should see yourself as a gift to your ideal client because you’re offering exactly what they are looking for.
If you’re anything like I was when I first started out, I would have done anything not to have to sell. I used to think, “Wouldn’t it just be easier if people simply knew to pay me?” I fought the idea of having to sell my services until one day it no longer felt as though I was selling. Instead I was now telling my potential clients how I could solve their problems.
Nothing is more powerful than your mindset when it comes to selling. With your ideal client avatar, you should know exactly who you are selling to and who you aren’t. You can seem like that obnoxious salesperson when you don’t know who your services are for and if your potential clients will find them valuable. It’s as if you’re asking a stranger if they want to buy your services. Like a person standing on the street and handing out flyers, no one wants to accept what you’re offering. And that’s when sell becomes a four-letter word. You are not this person!
You’ve probably heard that sales is about relationships. This is true. So you must begin by forming relationships with your potential clients. You do this to genuinely get to know the other person. Even when the person is your ideal client, you’ll have the advantage of knowing they are right for you. However, they don’t know you are right for them. Once you have established a relationship with them, you earn the right and permission to offer your services. Not before. Timing is everything. You can only know the right timing if you have the proper relationship.
The bottom line is if you think selling is bad, you need to shift your mindse
t. Find the place where you believe with everything in you that your ideal clients need what you have. You’re providing a valuable service. Your clients are fortunate to have you working for them. If you don’t believe this, why should they?
We also avoid selling, even under the right circumstances, to avoid being hurt by rejection. When we experience rejection—the no’s or, even worse, the crickets—it hurts. Much like failure, rejection stings.
Also much like failure, you can’t escape rejection. Both are a part of life and business. But there are some things you can do to make sure you handle rejection better. Dr. Gladys Ato, author of The Good Goodbye, says it’s all about how you shape the rejection during your self-talk. We typically have a tendency to place blame—blaming yourself for what you could have done better or blaming the other party. It’s a normal part of coping.
Dr. Ato reminds us how our minds will begin to imagine things if we don’t get answers to our questions. It is extremely important to remember the big picture. It’s not easy to find an opportunity for reasons not yet understood, but it’s crucial.
In Dr. Ato’s own experience while writing her book, missing deadlines was a form of rejection. Originally her book was scheduled to be released in January 2016. Instead it was released in October 2017, which turned out to be the perfect time. I myself couldn’t agree more.
Become A Successful Virtual Assistant Page 6
