Christopher V. Flett

Q: How do I go about raising my prices?  I understand the economy isn’t that strong, but I feel like my pricing for my consulting services is below market rates and I want to get them up.  Samantha Bains, Tacoma, WA

Hi Samantha,

Great question and one we get at the Ghost CEO on a weekly basis. There is a process of looking at your pricing and determining what will work for both you and your market. It is rarely the ‘price’ of something that is questioned, it is the ‘value’.  The real question here is, “how do I show value to my clients for the price that I’m charging them?”

Every service provider in the world either costs a client money or makes a client money. A dry cleaner  costs us money in the view that we have to take our dry-clean only clothes to them when we want cleaned. A good tax accountant can make you money by saving you money you might otherwise pay in taxes to the government, through strategy and information. If you are the type of service provider that can showcase how you make your clients money (through information and service) you can raise your rates to reflect this value. If however, you are in an industry that is a necessary evil (what I mean is that clients are forced to use professionals like you) and if there is a lot of competition, then it is a more challenging task.

Here’s what we know at the Ghost CEO:

1. There is a market at every price point
2. Each market will need to be communicated with differently depending on what ‘value’ you are offering them.
3. If you feel like you are undervaluing your services, that will eat at you and start showing up in other areas (like customer service).
4. You set the prices, not the client, but it is up to you to show the value.
5. Your services will be a ‘deal’ to some clients at any price point and will be ‘too expensive’ to others, not matter how low the price.

A $4 cup of coffee is offensive, yet we all buy 2 or 3 a day at Starbucks because they are delivering more than coffee. They are delivering a place to meet friends, a ‘little treat’ during the day, etc. Bentley Cars are around $200K to buy. Toyotas are $15K. Toyota makes millions of cars a year thorough industrial computers and manufacturing; Bentley makes most of their cars by hand and in limited supply.

Determine first what you want to charge and then justify it through value. Remember that you are in control of your business model, not your clients BUT, you need to figure out how the ‘value’ to them equates to them happily giving you your requested rate.

Business questions are always welcome at questions@ghostceo.com