Archive for February, 2014

How To Raise Your Fees

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There is a delicate balance between the fee you need to charge for your products and services, and the fee that people are willing to pay for them. But with gasoline, heating, shipping, health care, and other costs rising, there comes a time when you must raise your rates in order to remain profitable.

Most people see their own costs going up and won’t be surprised that you’re raising your fees, too. With proper communication about it, you should be able to raise your fees effortlessly.

Here are 9 tips on how to go about it:

  1. Don’t let fear and limiting beliefs stop you from raising your fees. If you hear yourself making excuses that you know are not true, it’s probably your fears and limiting beliefs raising their ugly head. Some of these include, “All my customers will leave if I raise my rates,” or “I’m not worth the new rate.”
  2. Have a clear idea of where your break-even point is for profitability. It’s not just about what you “need” to make, it should be about what you “want” to make, too. Decide how much money you want to bring into your personal life from your business and how much cash flow you want in your business to float new ventures. Think big; don’t keep cutting your goals just because you feel uncomfortable with big numbers.
  3. Base your fees on what the benefits and results of using your product or service are worth to your customer. For example, as a small business consultant and coach, I help people increase revenue and profit in their business. This has a value to self employed small business owner, and my fees are based on that value. If you can solve their problems, and if the problem is important enough to solve, then they’ll pay you an appropriate fee for that solution.
  4. Base your fees for services on your level of expertise. If your expertise level is high, if you’ve put in many years of study and have lots of experience, you’ll be able to charge higher fees than someone just starting out. Because of this, you might consider raising your fees annually as your skill level and experience grows.
  5. Check your competitors. Are there people out there, with your same skill level, charging more than you do? Why do you think you’re still undercharging?
  6. See if your product or service is a “commodity.” A commodity is a product or service that is the same, regardless of who is offering it. If you’re selling a gallon of milk, it’s the same gallon of milk that your competitors are selling. In commodity pricing, there’s no room for differentiation in the customers’ minds, and customers will be looking for the lowest price. So if you have a class called, “Copywriting 101” and your competitor has a class called, “Introduction to Copywriting,” your customers will see these two classes as the same thing, a commodity, therefore price becomes the only differentiating factor. However, if your product or service is unique, or your skill set and experience are different and better than your competitors, then you can charge more. You’d pay more for Oprah to teach you how to create your own TV show empire than someone you’ve never heard of. Bargain basement prices often scare off potential customers because they think your product or service is a commodity they can find anywhere. Use good marketing, branding and copywriting to differentiate yourself from your competitors.
  7. Decide in advance whether you’ll raise fees across the board, or only for new customers. Even if you raise fees only for new customers, there may come a time when existing customers will need to have their rates increased, too. Make a strategic decision about when you’ll raise your fees and for whom.
  8. Do the 80/20 evaluation. Find the 20% of your customers (or customer types) who bring you the least profit and either raise their rates or get rid of them. This may sound harsh, but you’re in business to make a profit and you can’t carry an unprofitable customer just because you like them. Refer them out to someone who can serve them at the fee the customer is willing to pay.
  9. If you will be raising your fees with existing customers, it’s a good idea to call them or write a letter, explaining that the fees will be going up to the new rate, and giving them a date when this will happen. I recommend giving them at least a two month notice. Will you lose some customers who aren’t willing to pay the higher rate? Yes. But if you do, then you need to ask yourself, “Why hasn’t this customer found value in what I’m offering so that the new rate was still acceptable to them?”

This is the perfect time of year to look at your pricing model and make changes. Take a few hours and decide on your new fee structure, dates for change-over, and communication avenues.

16 comments for now



Category: Business Strategy & Planning, Marketing

Suggested Reading: War of Art

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The War of Art: Break Through the Blocks and Win Your Inner Creative Battles

Don’t let the title of the book fool you: it’s not just for artists, it’s for ALL creative people…

…including every entrepreneur and small business owner I know.

What keeps so many of us from doing what we long to do? Why is there a naysayer within? How can we avoid the roadblocks of any creative endeavor—be it starting up a dream business venture, writing a novel, or painting a masterpiece?

Bestselling novelist Steven Pressfield identifies the enemy that every one of us must face, outlines a battle plan to conquer this internal foe, then pinpoints just how to achieve the greatest success.

Check it out on Amazon — I highly recommend this book to all my self-employed friends:

The War of Art: Break Through the Blocks and Win Your Inner Creative Battles

Have you read this book? I’d love to hear your thoughts…

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Category: Running a Strong & Efficient Business
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Do You Market to Women? Here are Timely Tips…

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Women shop, and buy, differently than men. So if you market to women, it’s helpful to know what makes them tick when they’re making a buying decision.

Let’s Start with Some Background Information

Did you know that women control over 51% of the corporate buying decisions in America? And women make 80% of all consumer buying decisions, as well.

Women start businesses at 1.5 times the rate of men and women own 40% of the companies in America.

So whether you’re selling to the large corporate market, small biz market, or consumer market, women influence a huge amount of that buying process.

What Do Women Want and Need?

There have been lots of studies about the psychology of marketing to women, and books and books written on the subject. It’s really fascinating reading, if you have the time to wade through it.

But if you’re a woman reading this article, the fact is that you don’t have the time to read all those books. You see, the most important psychological point in marketing to women is that they’re busy and time-constrained. (Do you know any woman in your life who has a ton of leisure time? I don’t!) They’re trying to juggle multiple priorities and what they most wish for are ways to save time and have less stress in their lives.

Tips for Marketing to Women

Knowing that time is important to them, you can alter your marketing to be NOT time-intensive. What does that mean?

  1. Get to the point. When writing articles, creating videos, drafting sales copy, designing websites, get to the heart of the matter as quickly as possible. Don’t make her wade through a lot of fluff and extraneous detail: she’ll walk away otherwise.
  2. Use bullet  points/sub-headings. When writing, use any device that helps her to scan your material quickly. She can then choose which sections of the writing to delve into in more detail.
  3. Micro blog. Use social media tools such as Twitter and Facebook to force you to encapsulate your point in 2 or 3 sentences.
  4. Be time sensitive. Explain to her how much time and effort it will take to consume/use your product or service. She needs to know what she’s committing to before she’s willing to buy. It’s not just the investment of money that’s important to her, but the investment of time as well.
  5. Information, information, information. Women do a lot of research before they buy. Make sure you supply them with all the information they need and want.

If you honor women’s busy schedule and their need to research before buying, you’ll come a long way to earning their trust. And once you have a women’s trust, she’ll be a life-long customer.

I’d love to hear your insights: As a woman, what’s the most important thing a business can do to help you during the buying process? (And what do you HATE marketers doing?) Share your thoughts and comments below. If we pool our ideas together, maybe we can create marketing that really, truly helps other women!

 

15 comments for now



Category: Marketing

Dealing with Crazymaker Clients – Part 2

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In Part 1 of this article, I gave you some ideas on how to spot a crazymaker client (or student, or business partner, or mastermind group member – whomever you have a close business relationship with).

Now that you’ve got a list of how to spot them, you might be able to avoid getting into a business relationship with a potential crazymaker client. Sometimes you don’t know you’ve got a crazymaker client until you’re already working with them because they’re good at hiding their crazymaking traits until they’ve won your trust.

I think it’s time to bring in the pros, so I interviewed Wendy Pitts Reeves, a psychotherapist from Maryville, TN about how to deal with crazymakers. She’s been a mental health professional since 1981, and she’s a small business owner. If anyone knows how to deal with the difficult people in your business life, Wendy does.

Your own happiness and the health of your business must be your first priority.

When someone’s repeated behavior causes you concern, you have a right to protect yourself. Remember, you’re looking for patterns of behavior and how that client makes you feel.

Having someone act badly once may be a coincidence or a bad day; when they do it a second and third time, you’ve spotted a crazymaker and you need to handle it.

The Three Basic Steps

  • First, admit to yourself that this is an unhealthy business relationship. Trust your gut when something doesn’t feel normal.
    Check out Part 1 of this article where I talk about some ways to spot a crazymaker client. Speak with your colleagues, mentor or mastermind group to double-check your feelings about the situation and get an outside perspective.
  • Second, give yourself permission to require boundaries in your business and be willing to enforce those boundaries as necessary.
  • Third, ask your client to change their behavior, but don’t expect it to happen. They’ve gotten along for many years with this type of behavior and they’re unlikely to change just because you ask them to. If the relationship is worth saving, it’s worth asking for change.

18 Ways to Deal with Crazymaker Clients

There’s an old saying, “Rewarded behavior is repeated behavior.” Remember that the reward that crazymakers are seeking is a sense of control and power, typically by creating a negative atmosphere and/or making you doubt yourself. If you allow this to happen, you are rewarding this toxic behavior and it will continue.

  1. Put everything in writing. Get them to sign-off on any major decisions, project plans, designs, and task priorities in writing. Wendy Pitts Reeves says, “Set boundaries about what you expect, in writing, and then they can choose to comply or not. Be clear about your policies, procedures, fees, cancellation policies, schedule, and availability.”
  2. Constantly push back to the agreed-upon boundaries. Don’t let them keep bending the rules. Learn to say no. Don’t say yes, just to avoid conflict. Here are several ways to learn how to say no.
  3. Tell them when something is outside the scope of the original project or agreement, and that it will cost them extra (or that you can’t do it).
  4. Set and manage expectations. Tell them what’s going to happen next and how long it will take. If they want to accomplish something in 4 weeks that you know takes 6 months to accomplish, say so.
  5. Remind them what will happen if they break the contract.
  6. Talk to them about their behavior and ask them to change it.
  7. Get them to pay up-front, or in deposits before you do more work for them.
  8. Educate them on the process you use, on unfamiliar vocabulary, on anything that might hinder communication.
  9. Be clear about deadlines, especially when they owe you information or a decision, or they have to take a certain action by a specific date.
  10. Put your fees, price list, and any other financial information in writing, preferably in a contract. Have them sign the contract.
  11. Limit communication to scheduled appointments; don’t answer emails just because your Inbox indicator flashes. If you’ve told them you don’t work evenings and weekend, never answer emails or phone calls from them on evenings or weekends.
  12. If you don’t have it already, get Caller ID on your phone, so you can tell when it’s the crazymaker calling. Let voicemail pick it up.
  13. If you will be out of the office for a day or longer, email them in advance of when you’ll be away and when you will return.
  14. If they twist what was said verbally in a phone call, use email to communicate. At minimum, follow up all phone calls with an email “summary” of key points. Keep all emails, even after the project is over.
  15. Don’t let their crisis become your crisis. If you’ve stated that you are not available for immediate tasks, don’t do an “emergency” task just to please the client; they’ll come to expect this type of behavior from you again and again. If it’s a true emergency and you agree to help them, explain to them what your additional fee is.
  16. Keep asking them what THEY are going to do to resolve the problem. Don’t try to fix everything for them. Help them to create action plans and to implement them. (This is especially true in mastermind groups.)
  17. Ask them what outcomes they want. Make them come up with concrete goals.
  18. If the client doesn’t comply with the rules, if their attitude and behavior is causing problems and they’re not willing to change, let them go. Walk away from the business relationship. It is not worth hanging on to a client who is harming you and your business.

Don’t Get Defensive

Don’t get into an argument with a crazymaker or spend extraordinary amounts of time and energy defending yourself. They seek power, and when you become defensive, you have given them that power. Instead, listen to them, repeat back to them what you’re hearing, but don’t fall into their trap. Do not play their game.

Wendy says, “Stay neutral. Thank them for sharing their comments and thoughts, but don’t get into an argument with them about what’s right or wrong.” Say something like, “It’s interesting that you heard me say X when I really said Y, and I’m a little curious about that,” or ” I notice this certain behavior keeps happening and I’m curious about why you keep doing that.” Not judgmental or critical, just putting it out there. Then pay attention to their reaction. If they’re defensive, you’re not likely to get anywhere; if they’re open and interested, the relationship might be worth saving.

Happier You

A great final tip from Wendy Pitts Reeves: “Seek consultation. Talk to colleagues and friends, your coach or mastermind group, to think out loud about this problem. Someone who has a little distance, someone whose advice you trust and respect. State the facts, state how it makes you feel (you’re already emotionally involved and you can’t see clearly). They can help you be objective and get clarity about blind spots, and can brainstorm about what to do in each situation. Many small business owners work alone and having a group of people who you can connect with around things like this is essential.”

No one wants to think that this will happen to them, yet many, many people emailed me or posted blog comments after Part 1 of this article to say that this had, indeed, happened to them. Keeping your eyes open to people’s behavior and being willing to deal with problems when they arise will make your business a much happier place.

Did you find this blog post helpful? Let me know your thoughts in the comments section below. And if YOU have any suggested ways to deal with crazymakers, I’m all ears!

16 comments for now



Category: Running a Strong & Efficient Business
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Creatively Reinvent Your Business Offerings

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I was speaking with a client, helping her get a new vision for the products and services she offers as she reinvents her business.

We had a long discussion about being so closely involved with your own industry that you can’t come up with a new business model because you can’t see past what’s currently being done within your industry.

So we played a little game. It’s called Insight Is In Sight.

We are surrounded by inspiration but don’t pay attention to it because we haven’t framed clearly the question we want answered.

Say that you want more success in your business and you want to be creative in what you offer your customers.

If you frame your question to this: “What are the different ways that business, people, animals and things are successful?” you will open your eyes to a whole new world.

Keeping the above question in mind, imagine your typical day. Pay attention to all the businesses, people and situations you come in contact with throughout one day.

For Instance:

  • What does our lawn have to offer to the local population of deer that they can’t get elsewhere? (And how can my business products and services be this uniquely irresistible, too?)
  • How can my business mirror the way the local grocery store offers its products and services?
  • What is McDonald’s business model and how do they offer their products and services differently than our local fine dining restaurant?
  • How are children (and cats) so efficient at saying what they want — and getting it?
  • What are the real benefits of school buses in our community? How do the parents, children and the school administration view school buses? What business and marketing model does the school bus company use, given that it has three different audiences it’s trying to please?
  • What is the business and marketing model of the city of Las Vegas, and how has it changed over the years?
  • How is it that one species of tree can dominate acres of forest? (How can my product and service offerings dominate my industry?)
  • How (and why) did Southwest Airlines create the next generation of airline travel? (How can I be as innovative in my business offerings?)
  • Are all movie stars’ marketing models and branding the same? Which ones stand out from the crowd, and why?
  • Once I’ve purchased an iPod, why do I feel compelled to fill it with my favorite music and podcasts, over and over again, through iTunes? What business and marketing model (and psychology) is in play here?

See? By paying attention for one day to everything that comes across your path, you can ask questions about how all these things can be related to a new way of offering your products and services.

Warning: Once you see the world in this way, you may never be able to have a normal life again. 🙂

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Category: Rethinking Your Business
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