A recent post about a client raising her rate prompted contra-advice. Many gurus tell you to make it easy (on you) and blame factors beyond your control like inflation or the pandemic. Bad advice. There's a better way to raise your fees.
Your fees should absolutely 100% be based on your value to your clients. For many professionals, this means you SHOULD be charging more. Clients don't mind paying to improve their business. You might be surprised by how much they are willing to pay -- willingly.
Factors that affect YOU have no impact on the value your clients sees. The fact you're paying more for coffee in the breakroom doesn't concern your client.
Focus on Your Value
I advise my clients to ALWAYS focus on the value TO THE CLIENT. Avoid tying your price to external factors (pandemic, inflation, other firms). Blaming external factors seems easier, but it is a crutch that starts you on the profit-crippling path to commoditization (when "the market" sets your price rather than the value you create for the client).
Most professionals get shopped because their value is not clear enough TO THE CLIENT. They get seen as a Cost rather than an Investment. Costs are things businesspeople--your clients--strive to minimize. Investments create returns businesspeople work to maximize.
The more competitive your marketplace, the less pricing power you have. You want to avoid that game. Traditional marketing differentiators don't do the trick. Speaking directly -- and clearly -- to the value you generate *for your client's business* is a different story.
If you have a differentiator that delivers superior results, be direct and talk about the results. That's what clients care about. Show clients that you care about what they care about: improving THEIR business.
Now, quantify the value you ENABLE. What can your client do because of what you do? This is your value to their business. This is the bar your fees should be compared against.
Competitors
But Bruce, Firm Z only charges $X. If Firm Z's value is equal to yours, then you are stuck. You are a commodity (main differentiator is price). If you're not a commodity, then how does your VALUE (not process) differ? Perhaps you and Firm Z can both do the work, but the client is more confident in the results from working with you. That is significant value.
No, this is not how professionals are taught or how most professional firms price. Probably why my clients out earn other firms.
Pick your clients carefully and price in alignment with the value you deliver, and you earn more without working harder
