Are you paid by the hour or by the results you promise?
I’m very happy. A couple of weeks ago one of my clients, Marijke, decided she wanted to move from being paid by the hour for her services, to selling programs (or products if you wish). This is a decision that was difficult for her, because she is a freelance HR interim manager and freelance interim managers are always paid by the hour (or day). She was afraid her clients would not accept this. Nor would the interim management agencies.
Well guess what, she’s ready to launch her program today and I am convinced she’ll find clients, because her program is super-duper. She’s found a niche. And everything is in place to launch the program with a bang.
Marijke is one of the clients who attends our 6 month PROFICIENCY program YOUBRAND©: BUILD YOUR BRAND – ACHIEVE BUSINESS SUCCESS – Let’s become a YOUBRAND©!
And this is exactly the program where I teach my clients:
- to brand themselves in a way they get noticed by their potential clients and in a way that they stand out from the competition
- to look at their services in a different way – how can you make more money by delivering a remarkable ‘product’ that is different from the competition and something your ideal client wants and needs
- to be successful in everything you launch – from your website to your blog, from your new product to your pimped LinkedIn profile… everything is a launch and your marketing needs to be ready – I teach you how
- to move away from being paid by the hour and have multiple (passive) income streams
- and much much much more. Take a look at our program here. We’ll start June 25, 2015! And feel free to contact me with whatever question you might have. I’m looking forward to hearing your thoughts and helping you wherever I can.
Now getting back to being paid by the hour – why and how can you move away from that?
- When you are paid by the hour (or day) you have a task-fee focus. You focus on the tasks you do and how many total hours you work. There is (almost) no focus on the overall value you deliver. So you may feel you are delivering value, in reality you are an expense – separated from the end objective’s value. And you don’t want to be an expense do you?
- Being paid by the hour cheapens your value ! CLICK TO TWEET You are paid for the hours you work, not the value you deliver.
- It turns you into a subcontractor, not an authority. You become a commodity when you charge by the hour! CLICK TO TWEET
- When you find out there is more work to do once you have started your assignment, you have to ask your client to approve more hours and money. In other words you have to sell again.
- You are punishing yourself if you work quickly and efficiently.
- Someone will always be ready to charge a little less per hour. I see this happening all the time.
Now I hear you asking: “how the h*** will I be able to move away from hourly based fees? And what is it that I need to charge then?”
Here are some ideas you could consider :
- Retainer: this is actually a combination of task-based fees and value-based fees. You offer advice and availability. You charge a flat fee for providing a number of hours of work + a number of hours of availability. For example, my VIP Lead with LinkedIn program includes a 1 month 24/7 availability bonus (people can ask any concrete question regarding their LinkedIn profile and online Personal Brand during 1 month). Note: this still is not a value-based fee structure.
- Project-based: You charge a single overall fee for the entire deliverable. It is clear you have to have an idea of how much work (hours) you’ll put into the project and you have to be able to identify the deliverables exactly. So some experience is required. But if calculated correctly it is a win-win for you and the client. You become an investment instead of an expense.
- Contingency-based: You get paid on what results you deliver. For example: you charge x% of the sales increase. This is riskier, so you need measurable results in order for this system to work.
- Turn your service into a program or product: just like Marijke did. And it is also what I do. I charge my coaching or mentoring sessions per hour. I offer programs and charge per program. For example: my 6 month PROFICIENCY program YOUBRAND© is a blended group program and combines online and live training, it combines individual and group coaching (like-minded entrepreneurs), and you get a lot of checklists, templates, etc… all to enable you to start immediately build your Personal Brand and attract clients.
Something to consider, right? However, be aware. There is no universal best billing alternative. Client preferences differ, and each project or case may accommodate different billing options.
I’m curious to know what other pricing ideas you have. Tell us!
And in the meanwhile, please do not hesitate to have a look at our 6 month PROFICIENCY program YOUBRAND©. We’ll start June 25th. Early birds will get a big thank-you in the form of bonuses, discounts and lots of other great surprises. Contact us now to know more! No strings attached.