We have become excited about the chance of dealing with you, but we’d require you to heavily discount your consulting rate. Is that something you’ll consider?”
That’s a contact I received last week after going back-and-forth with a reasonably large property developer who initially submitted an appointment request. They wished to bring me onboard to greatly help their in-house team market a pre-construction luxury unit. My reply was very short and sweet:
I wasn’t trying to be cold, but concurrently I didn’t feel just like I had a need to justify why I wouldn’t discount my rate, nor was I likely to feel bad about charging what I understand I’m worth. Many entrepreneurs feel bad about charging what they are worth — here’s why you shouldn’t.
You won’t ever get your time and effort back — most of us lose it daily. In the event that you feel your time will probably be worth a particular dollar amount, charge for this and adhere to your guns. When you even entertain discounting your rate, you lose credibility.
I’ll provide you with a perfect example — something I encountered the other day. I was considering bringing on another consultant to greatly help me with a big project and I had one individual in mind. After talking with three differing people that he was dealing with I came across that his rates were everywhere for the same scope of work. I’m talking huge discrepancies that made you wonder if he was just pulling numbers from the sky or charging predicated on what expenses he previously approaching. He instantly lost all credibility with me.
I charge predicated on what Personally i think my time will probably be worth, combined with the next point below — knowing the type of value I bring to the table.
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The e-mail reply I referenced above was from a genuine estate developer that was pre-selling an extravagance high-rise condo development. The project was worth a ridiculously massive amount money. I wanted to come onboard and help them for my minimum consultation engagement fee, for just one simple reason: I needed to knock it from the park and sign a much bigger contract to greatly help them move all their future developments. EASILY knew it would you need to be a single project I’d have come in higher initially.
I knew just how much revenue and sales I possibly could help them generate, therefore i knew that my rate was small potatoes in the grand scheme of things. They didn’t bite — and that’s fine, not everyone will — but that doesn’t mean I will even entertain the thought of discounting my time.
In the event that you don’t respect your worth how will you expect any one else to?
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I’ve run split-test campaigns on e-learning courses for a company I was doing some consulting for, and one test still sticks out if you ask me. We tested two price points for an electronic course. We tested a minimal price of $37 and an increased price of $397. Which do you consider performed better?
The bigger priced campaign sold 3 x as much courses as the low priced test. Why? That’s simple — people automatically associate higher prices with higher value.
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If one marketing consultant includes a rate of $40,000 annually and another charges just $500, who do you assume delivers the bigger value? Naturally, the bigger priced consultant will be perceived as the main one who will deliver the best results.