If you provide a valuable service to a client but don’t charge enough, it leaves a bad taste in your mouth because you are leaving money on the table. You may beat yourself over the head because you were unwilling to charge what you believe your services are worth.
What causes you to undercharge for your products and services?
In a competitive landscape, it can be fear that the client would find the cost to be too prohibitive. It may have been because the client asked for a deal, and you gave in. Maybe you are under financial stress and need some money quickly.
NOTE: Have you ever considered that leaving money on the table may harm your clients?
When you undercharge for your services, especially with a new client, you set expectations. Clients want as much as possible for as little as possible. That’s how outsourcing became such a boom industry.
As the provider, that doesn’t always benefit you. It doesn’t always help your client either.
If you regularly undercharge a client, that client will go to other providers and expect the same low price. This introduces downward pressure on what you can—and should—charge. The client comes to undervalue what you provide.
At some point, the only people willing to accept such low prices are people who will do a poor job. Other companies or individuals will not accept to do the work because the price is too low.
By lowering prices, you work against yourself and your clients. Your clients will find themselves having to deal with lower quality to get the lower price to which you’ve accustomed them.
How can you turn this around and stop leaving money on the table when pricing your products and services?
- Revise your mindset. Instead of thinking that you’re selling to a client, consider that you are providing value. You are not just selling baubles; you are helping your clients.
- Price according to the value you provide. If you save $1,000,000 for a client and it takes you three months to do it, should you be paid less than a person who takes one year to provide that same $1,000,000 saving?
- Don’t offer discounts unless you gain a benefit that goes beyond the sale. For example, in a large sale, give the client a discount if they pay the full amount in a single payment instead of multiple installments.
Review your client list, identify which ones are forcing you to undervalue your services, and discuss it with them. In the end, you may decide that they are not the right clients for you. For their benefit, and yours, you should let them go so they can find someone who is better suited to their needs.
It will allow you to find clients better suited to your business.
Until you consider that you are helping clients instead of merely taking money out of their pocket, you won’t be able to charge what you are worth.
It doesn’t benefit you, and it doesn’t help your client either.
Stop leaving that money on the table.
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