The other day I was having breakfast with a friend whose firm had just hired one of my competitors to deliver a business development training program. I asked him what his firm had paid for the program. It was five times more than I charge. I was simultaneously outraged and envious. How could my competitor get away with charging such fees in this economy? Our programs were similar in the way they were structured and in the outcomes they delivered. But after a few more questions of my friend, I realized that my competitor had two advantages over me:
- His fees were based on value, not hourly rates.
- He had five times my gumption.
According to my friend, the competitor had not concerned himself with the conventional thinking on standard rates. He was not inhibited by some modest notion of getting a "fair price" for his work. He was intent on getting the best price. So he provided a comparison between his fees and the revenues he could help the firm generate. From that perspective, his program was a bargain. And when the firm tried to negotiate a lower number, he held his ground and his strategy paid off.
And so my competitor schooled me on three points that day:
- As much as businesses are hurting these days, there are still plenty who are willing to invest in results.
- When you tie your services to their gain, you can leverage your value for higher rates.
- When a client asks for a discount, it doesn't necessarily mean you'll lose their business when you say "no."
So ask yourself, are you a bargain because you've accommodated the economy or because you've tied your services to the value you provide? Thanks to my competitor, I have a much richer appreciation for the latter.
Authored by David Ackert