From the course: Consulting Professional Weekly Tips
Pricing matters
From the course: Consulting Professional Weekly Tips
Pricing matters
- Pricing is one of the most powerful profitability levers that you can pull. A one percent pricing increase on the top line has a huge profit impact on the bottom line. Let's look at an example of a business that has a 20% profit margin. A one percent increase on the top line results in a five percent increase on the bottom line. Every penny of that one percent increase on the top will drop straight to the bottom. And that business will go from a 20% profit margin to a 21% profit margin. That's a five percent increase in total profitability. You need to understand your rates relative to the market and be willing to take pricing when you have an opportunity to do so. If you don't, you're going to find your business falling behind in terms of your rates. When you do take pricing, be clear and confident. Have a solid rationale for taking pricing. That rationale can be as simple as, "Hey, it's been four years since our prices have increased. "We're moving to a level that's going to be more in line "with the broader market as well as in line with the value "that we know we're delivering to your organization." You can increase pricing by changing your pricing structure. If you had a daily rate, maybe you can move to an hourly rate. If you have an hourly rate, maybe you can move to a daily rate. And as you make that switch, look for an opportunity to increase your total rate. If you charge by project, maybe you can charge by unit. If you charge by unit, maybe you can charge by project. For example, my firm does some executive coaching. In the past, we've offered these coaching services at an hourly rate. Recently we've looked at it and said, "Well, you know what, we're not getting what we want "with the hourly rate, so maybe we need to move "to a project base rate." We're now selling those engagements as long term engagements for three, six, nine, or even 12 months. And in the process of doing so, we've been able to raise our rates versus that hourly rate we were charging. Understand your rate structure. Understand when you have opportunities to raise pricing and think about creative ways you can do it in a manner that is still consistent with the value you deliver to your clients.
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Differentiating your consulting business2m 9s
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Staying connected with clients1m 52s
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Scaling up from individual to team1m 55s
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Pricing matters2m 9s
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Sell the services, not the person2m 22s
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Document discipline2m 32s
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Staying on top of current trends1m 27s
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See every interaction as an opportunity2m
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Pick partners carefully2m 3s
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Take time off2m 15s
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Use partnership agreements2m 36s
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Join loyalty programs2m 21s
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The power of blogging1m 45s
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Picking a salesperson1m 44s
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Writing a book or white paper1m 34s
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Selling to big companies when you're new1m 43s
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Overcoming new vendor requirements1m 43s
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Getting to the decision maker1m 21s
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Set up a tax reserve account1m 33s
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Sales tip: Hey, I'm in the neighborhood1m 48s
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How to set pricing for hourly work1m 51s
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Serving a past employer as an SME1m 28s
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Create a standard proposal1m 38s
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Respecting copyrights2m 36s
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Compensating salespeople1m 58s
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Work product vs. intellectual property2m 19s
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Be a Connector1m 53s
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Build referral relationships2m 30s
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Roll back to different relationships1m 32s
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Make time for sales2m 16s
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Maintaining your brand2m 33s
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Protect client confidentiality1m 29s
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Find mentors and advisors2m 21s
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Poaching client employees or customers2m 5s
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How to set pricing for a project2m 7s
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Attending networking events1m 53s
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Stay away from buzzwords1m 49s
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Use a standard services agreement1m 50s
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Beware of RFPs2m
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Keeping control of a meeting3m 12s
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Know when a project is about to end1m 22s
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The challenge of working from home1m 52s
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Expanding opportunities versus zero-sum1m 55s
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Manage your calendar rigorously2m 13s
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Let clients have good ideas1m 33s
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Challenge your team2m 25s
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Don't be a coworking jerk1m 40s
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Get paid for scope changes1m 46s
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To join or not join professional groups1m 56s
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Saving for your future in the USA1m 20s
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Will you do implementation?1m 38s
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A lifestyle vs. a legacy1m 39s
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