How can we determine which clients want to pay a higher price and not leave money on the table?

Prepwise AnswersCategory: General CareerHow can we determine which clients want to pay a higher price and not leave money on the table?
Career Dev Staff Staff asked 7 months ago

How can we determine which clients want to pay a higher price for our professional services and not leave money on the table?

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1 Answers
Kate McKeon Staff answered 7 months ago

You may have knocked this out already, but just in case, have you considered basing your pricing off of your costs of business?
 

  1. Look at cost to maintain your company now – keep the lights on, make sure there are birthday cakes, the nice stuff.

 

  1. Do you want to grow? Growing requires capital. How much will you need? How long will it take to generate based on your current client volume and profitability.

 
You should have a certain overlap of pricing that fits both the what it takes to run the company with what your clients will actually spend.
 
Addressing the small versus large client pricing:
Have different products for them. Charge different amounts for different products. It can be a bit crass to see, but some companies have pricing models based on the client’s revenue. Others base it on the number of employees at the client. Over time, you may find that one size of client is your sweet spot. Rather than spreading out to everyone you might-could-possibly reach, perhaps focus on sweet spot clients – that is, if there are enough of them.
 
As someone who has owned small businesses and has served others with small businesses, sometimes we just aren’t worth it. We’ll take up even more resources than your large clients because we need more hand holding or we lack “common” knowledge about your space or we just don’t have the staff to execute so projects drag on far too long.
 
It can be worth setting an initial barrier price that frightens tire kickers but ensures the serious client candidates make it through.
 
Good luck!