June 08, 2000
How to raise your professional fees and keep clients
Dr. Lynda Falkenstein
A: Of course, I have ideas. First off, relax. Your clients don't expect you to work for nothing. At least the right clients don't and you don't want to work with the others. Here's a simple and gentle way to get your clients on board the new fee structure. As soon as possible, send a note to your existing clients thanking them for their business. Tell them that you have enjoyed the opportunity to assist them and look forward to working with them in the future. Then let them know exactly what your new fee structure will be, effective effective whatever date you choose. In the next breath, however, tell them that for those who contract for services prior to a given date, you will honor existing fees for the rest of the year or whatever period you designate.
As you are alerting your clients to this increase in fees, it's critical to avoid committing the cardinal and all-too common sin of apologizing for the increase. Your fees are what they are and that's that. Move on to other topics. And if you wonder if I'm daffy, think about the last time you went into Nordstrom. My hunch is, you didn't argue about the costs. If you did, you were in the wrong store. Same with your clients.
Q: I hope you can help with a problem I've experienced for years. I call it getting bled every time I go to a social function. I'm in the kind of business where people come up and love to talk about what I'm doing and then start squeezing me for free advice. Frankly, I'm really tired of this but don't know how to tell them this is what I do for a living and that they should make an appointment to come and see me. Any suggestions will be much appreciated.
A: Frankly, you've answered your own question. While annoying and costly, the free-advice syndrome is easily addressed. Assume you are at that social engagement and some nice person comes up starting to talk about your business, your response is straightforward and gracious. Simply say, "Your questions are really interesting but they are so important, I don't feel comfortable responding to them here. In fact, I think I would be doing you a disservice. What I suggest is that you call my office Monday morning and schedule some professional time."
Another variation on the theme is to say (with a broad smile on your face), "You know, that's exactly what I do for a living! If you're really serious about these issues, I suggest you make an appointment." Most likely the person doing the asking will be delighted to know you are able to help them.
With these responses, you alert your free-advice seeker that you are available to help them professionally. Use of the term "professional" is very important, since it also lets the person know you value your information and time.
It's pretty clear that the only person to blame for an information-bleeding session is the person who is losing the blood. The next time you find yourself in this situation, remember rule one: Smile, & rule two: Shut your mouth.
Q: When you talk about niching something, I'm wondering if the same rules apply to all the "widgets" to which you refer. That is, are the rules the same for niching a professional service as they are if I am selling washing machines?
A: An important question. Thank you. While the basic niching steps apply to professional services and tangible widgets, there are some key differences which you must keep in mind if you are serious about your niche success in a professional service. Some of them include:
1. For starters, in the professional services the primary thing you are selling is YOU. I don't care what the field is--law, insurance, real estate, architecture, etc. It doesn't matter. You must be perceived as a person to be reckoned with. Someone who makes an impact wherever you go. You are helping clients address very big issues in their personal and/or business lives. The bigger the issue, the less important money is in determining who a person chooses to perform a professional service. In issues of huge consequence, people choose other people who they perceive can make the difference. And that's why your primary concern should be developing a reputation as a person of consequence in your field and all the way around!
2. Once you understand how important YOU are in niching a professional service you understand better why our marketing strategies are so important in conveying just the right tone and message. Strategies such as cold calling give off messages of desperation and begging instead of developing a sense of respect for your capabilities and presence.
3. And not the least important difference between developing a professional-service niche and one related to tangible products, is that your professional service doesn't go on sale. If you are a surgeon, you don't give volume discounts for appendectomies and cut-rate prices if business is slow. At least not if you want to grow a serious business.
People buy other people they perceive to be already successful. Begging through cold calls and slashing prices rarely convey a tone of self-confidence and success. Regardless what service you are selling, think of yourself as the "surgeon" of your industry. No fire-sales needed. Your reputation speaks for itself. That's called being niched.