Time to call time on hourly rates!

6 reasons professional firms should dump hourly billing right now!

I was personally reminded today of the perils of time-costing so beloved of solicitors, accountants and many consultants. I received an unfathomably large bill from a lawyer who did some property work about 3 months ago. I was aghast, but immediately grasped the problem.

He had billed me for what the job was worth to him – the supplier, not what it was worth to me – the customer!

I have approached his firm with a proposal to help him move from hourly billing to value pricing. The proposition that “time is money” is over 250 years old, and attributed to Benjamin Franklin. However, clocks don’t write cheques, and you don’t attract and retain clients by selling hours.

You sell solutions, service and value.

For the benefit of any designers, SEO dudes, consultants, advisers, laywers or accountants currently charging clients by the hour, here’s why switching to value pricing could transform your business:

1: Pricing a job at outset gets any objections from clients on the table before you start; far better than arguing over the bill at the end!

2: Clients feel special, as you are calculating a bespoke value for their work. Hourly rates, by contrast, are applied at the same level for everyone, irrespective of the value you are adding to their business.

3: Sharing risk by quoting fixed prices projects experience and confidence in your delivery and performance. Clients will feel that you must know you can do the job, otherwise you wouldn’t have committed to it.

4: Clients will appreciate that you are not about to rip them off. Can you imagine how you would feel if an airline charged by the mile for your ticket? Maybe the pilot would deliberately take the long route to rack up the costs!

 5: Value pricing forces internal efficiency. Fixing revenue ensures you will delegate and review work flows so you can offer service whilst ensuring you meet your own profitability aspirations.

6: Annual price increases are easier to factor in, as each job is costed individually. No firm likes sending out notices of hourly rate hikes, and no client likes receiving them.

In summary: value pricing encourages trust and nurtures long-term relationships with satisfied clients, leading to mutual profitability and success.

It’s time to ditch the clock and focus on value!

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HOURLY RATE: ZERO!

And now, here’s something of incredible value to you,  OFFERED AS A GIFT! Especially from me to you, as a loyal reader, I’m going to give you a HALF-HOUR OF POWER directly with me by Skype or phone. That’s right dudes and dudesses, wherever you are in the world, you can talk to me for 30 minutes about your business, and where you want to take it. Who knows, I might even be able to help!

Simply comment on this blog telling me in 140 characters or less (now there’s an idea…) what we’d talk about and why.  We’ll exchange contact details and get busy!

Here’s to your success,

Jonny

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How to give stuff away for profit!

I was just talking to a group of enlightened entrepreneurs who are refusing to lie down and suffer the consequences of the economic downturn. One of their crunch-busting techniques is as old as the hills, but they’ve recently refined it to an art form.

It’s called giving stuff away!

You know the lovely warm feeling when you pull on a pair of jeans you haven’t worn for ages and find a ten pound note (ten dollar bill for you Yanks…) in the pocket? And don’t those free deli samples in Sainsbury’s/Walmart taste so much better than the same thing you actually buy?

Well, that’s how your customers feel when they get more than they are expecting from you.

So, imagine how your prospects will respond to your marketing when they receive a free gift – without even making a purchase!

Giving “more” is a simple, inexpensive way to instantly improve your relationship with both customers and prospects.

Ideas for gifts… that cost you nothing!

1: Free reports, info packs, fact sheets and market analysis: these can all be made available online or by email to really slash the costs of delivery.

2: Newsletters: regular info and offer-packed communiqués to your database of prospects and customers.

3: Industry specific freebies: appeal to who you’re trying to sell to: recipes, sports tips, discount coupons, travel guides.

4: Trial offers: get them using your products for free and they’ll often need or want to continue and pay.

5: Buy one, get one free: this really does cost you nothing, providing your gross margin is more than 50%!

Ideas for gifts… that cost you a small amount

1: Company-branded items: hats, water bottles, mouse pads, pens etc

2: Non-related materials: stuffed animals, chocolates, alcohol, sports tickets

3: One of your products or services at no cost to them

4: Rewards for referrals or recommendations

5: Calendars and diaries: clichéd, corny, but nothing lasts a whole year like something with 12 months of dates on it!

The return on your “gift” investment could be worth thousands of pounds/dollars in sales. Make that extra effort and give your customers more than they are expecting.

Now I’m going to give you something free, with no strings attached!

Simply add a comment to this post telling me why you need a 30-minute mentoring session with Jonny Cooper! We can talk about your business plans, goals and issues. Yes folks, a complimentary half-hour of power with me via Skype or phone! I look forward to talking to you. Jonny.