Ever heard the old adage professed by wizened sales people:

“As soon as you shake hands on a deal, you know you could have asked for more Money”

This always struck me as a bit of b*llocks because if that really was the case then you would never agree on any sale but certainly it holds the kernel of truth that pricing is never straightforward.

I was reminded of this in the last week when two separate proposals for prospective new clients fell apart because they balked at the proposed fees.

In the email exchange around one of them, I was labelled:

“You’re demented if you think anyone would pay those fees for your services”.

Although a little taken aback by this, I had to chuckle to myself as I thought about the clients who valued our services immensely and paid much more than the discounted fee I had offered to this client.

Pricing is a much an art as a science and I have written before about how I do pricing for Shiageto Consulting.

Now I don’t always get it right but certainly the confidence I have gained over the last 5 years since I started the business has meant that I have raised our fees consistently.

This is the confidence built upon:

• Growing the business every year since our creation
• Seeing the direct impact of our work and being told by clients how invaluable we have been [fancy 6% improvement on sales performance anyone or cost improvements in the 10s of millions of dollars?]
• Working with over 70 clients
• Being asked to deliver our services in 5 different continents
• Bringing in amazing new additions to the team
• Developing new techniques we use with clients

I think back to the first year of the company (one afflicted by the impact of Covid) and I think how grateful I was just to win any piece of work.

Let’s be clear though, this doesn’t happen straight away, if we hadn’t had those experiences we would never be where we are as a business, nor would I have real understanding of the value we are worth.

Every time I speak to a new entrepreneur running a services business, I implore them not to look at it simply as a time and materials business (i.e. selling daily rates).

If you are any good then you should be selling your value not your time — yes in the early days you may be keen to fill your diary as you try to build a reputation but once that clicks you need to start raising your fees.

Sure, this can mean that those that don’t think this way will be outraged when you tell them your fees but, trust me, those companies were never a good fit for your services.

In a similar way, I tend to turn down the companies that don’t make the work we are doing together one of their priorities or who lack the foresight to understand the importance of emotional intelligence in the workplace.

At the end of the day, if you are running a services business, you should view it as being fortunate enough to own a state-of-the-art, top-end performance vehicle (like a Ferrari) that you lend to clients; if you rent it out too cheaply or you’ll find it gets trashed by people who don’t value it.

In the case of the two prospective clients above, I may not have landed the projects but I may just well have protected my Ferrari for a better client instead.

Plus, I’ve got a feeling that at least one of those clients will be back in the long term once they realise they are not getting what they need elsewhere, so watch this space.

Keep following me to see what happens next 🙂

Faris

Faris

Faris is the CEO and Founder of Shiageto Consulting, an innovative consultancy that helps firms and individuals sharpen their effectiveness. Connect with him here

Success = IQ x EQ x FQ

Originally Published on https://farisaranki.medium.com/

Faris Aranki Strategy & Emotional Intelligence

Having spent over 20 years delivering strategic change for the corporate and non-corporate worlds, Faris has experienced first-hand the fine differences between strategic success and failure.
His work has spanned numerous companies (from global behemoths to small start-ups), in numerous countries, across a range of sectors, supporting them all to unlock strategic success.

He came to realize that often what hinders institutions from achieving their goals goes beyond the quality of their strategy; it is their ability to engage effectively with others at all levels and remove barriers in their way. This has led to his passion for improving strategic effectiveness within all businesses and individuals and the foundation of Shiageto Consulting.

Over time, Faris has worked to distill his knowledge of how to solve complex problems in a structured manner combined with his skill on engaging effectively with others and his ability to quickly determine the barriers to a strategy's success. This knowledge has formed the foundation of Shiageto’s workshops, courses and methodologies. Faris believes that any firm or team can adopt these improvements; all it requires is a little of the right support -something Shiageto provides!

On top of leading our business, Faris is now an accomplished speaker and contributor for a variety of outlets.