Pricing your services

Pricing a product can often be far simpler than pricing a service. You have raw materials, manufacturing, packaging, and so on. All these elements are available at a certain price, and it’s a relatively straightforward model to work out your profit margin.

But business advice services are even trickier to price. You’re working with more intangible factors, such as your time and the value of your service to your clients. For them, the return on investment is crucial. Being able to structure a session effectively and demonstrate the benefits is not easy.

Challenges to pricing a Business Advice Service

Let’s pick up on two key factors here. Your time and the value your services bring to your client’s business. 

Once you agree on when and how often you meet with your client, it’s important these sessions continue. This means you need to manage your meetings to deliver the right advice, with actionable tasks to ensure they keep coming back for more. That is precisely how the Hubbix Strategy Builder works: giving you the tools to ask pertinent questions and draw out the right answers, a great way to advise your clients effectively.

The value you deliver is not just about charging for your time. You bring to each session your knowledge, skills, training and many years of experience. This allows you to assess what needs to happen and provide practical support. The ability to see your client’s business from their perspective is also key, so your advice can be framed in a way that resonates with them.

Areas to avoid in your pricing methodology

Perhaps the most important aspect to remember: be sure to value your time (there are only so many hours in a day). Flexibility can be important for your clients, but it can work against you if you’re not careful. Business owners are buying into you and your services because of how you operate, so you need to structure and lead your sessions effectively to get the most out of each working hour.

Here are some things to consider when initially pricing your services:

  • Avoid offering special rates to friends and family – this can easily spiral out of control.
  • Outside of an introductory session, giving your time for free devalues your services.
  • In a competitive market, it’s easy to get caught in the trap of pricing too low, as you might be seen as lacking credibility.
  • Equally, if you aim too high, you could price out several potential clients.

It’s a good idea to research your market to help you set your prices. You’re not working in a vacuum, and it could help build confidence in your pricing strategy.

How to price your Business Advice Service

In order to know what to charge your clients, you need to be able to structure your sessions effectively and demonstrate the value your advice brings to their business.

As previously mentioned, an important factor is to understand your market. It’s good advice for your clients and applies equally to your business. Explore what your competitors are offering and how much they’re charging. They shouldn’t dictate what your rates should be, but they could act as a benchmark to inform your price points.

There are several ways in which you can present your pricing to clients. But let’s just take a step back to ensure you have the right information to be able to talk to your clients about the options.

Being able to structure your first and subsequent sessions with your client is vital. You need to ask the right questions. If you don’t start with pertinent information, you’ll waste precious time not giving your clients what they need. Hubbix’s Strategy Builder is designed to guide you through this process effortlessly, providing structure for every session.

Another crucial element to your pricing strategy is understanding the ROI your clients will get as a result of working with you. You can also use this information to set your KPIs and measure the impact of your advice.

Starting with a new client in this way will help build long-term partnerships. By consistently offering organised and focussed meetings, your client will see the value. The tangible element of your service is the ability to track KPIs with a process to measure ROI. The KPI Tracker in Hubbix can easily do this for you.

Presenting your pricing model to clients

When you put all these elements together, it comes down to how you present your options to clients. There are two considerations to bear in mind at this point: they will want to avoid costs that spiral out of control and to understand what they’re getting for their money.

So let’s have a look at packages – a range of your services being presented together as a single product and offered at a certain price. You can provide varying levels of support depending on what your client needs. In this scenario, be as transparent as you can by detailing each element and what they can expect.

Retainer Vs Annual Fee

The ideal scenario for many businesses is to work on a retained basis. For some clients, this can be a red flag, and you might experience a degree of cynicism. Why is that? Because it can be misinterpreted as a way of tying them into a contract for months where you are guaranteed payment, whatever happens.

However, you can adopt this approach alongside your product packages. Provide clients with an annual fee amount that can be paid over 12 months. The figures will look a lot more manageable. This method ensures you remain transparent, and with a growing business, it will help manage their cash flow.

An alternative is to price your services individually. Clients simply pay for what they need, which can, of course, change over time. Alongside this option, you could provide an hourly rate. This would help to plug any gaps and ensure you’re never working for free. You might want to position this as a taster of your services to help clients experience how you work. Ultimately, your plan can be to migrate them onto a service package.

Your pricing strategy needs to be based on the value of your time and the value your services bring to your clients. With the right tools, you can provide a structure to these sessions based on your knowledge, skills and expertise.

For further information, support and guidance on providing your clients with the optimum ROI, please contact us.

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