A common question I get asked is how to determine rates for services. After assessing the number of hours it will take to perform the services some of my clients offer, they worry that their hourly rate is too high.
My question to them is, “Why do you believe your hourly rate is too high?”
The most common response I receive: “Well, I personally wouldn’t feel comfortable paying that price.”
That’s why we eliminated hourly rates at Prosper for Purpose. Sure, when you set a service fee and the time to deliver, you can always calculate an hourly rate. But it’s misleading and here are two reasons why.
- You’re not counting the investments you’ve made in your education, the time you’ve dedicated toward gaining professional experience, and everything else that has gone into making you the expert that you are today. You are not the one paying for your services — it’s people who don’t want to invest the exorbitant amount of time and money it requires to gain your level of expertise. The total they’ll end up paying you to do the work is significantly less than the cost of learning how to do the same quality of work for themselves.
- You have to consider the transformation you make possible for your clients and ask yourself what that is worth. If you know in your gut that your prices are too low but can’t think of a good premise for raising them, the question you need to ask yourself is, “What are my services worth to my clients?” This is the perspective you should adopt when it’s time to evaluate your pricing.
Finally, promote your services by highlighting the benefits your clients receive from working with you. Then, you justify your prices based on the value of the transformation you facilitate.
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