Earlier this week I saw a note come in from an Agency Course student named Sid. He’s deep into Agency Course right now and putting his new skills into action.
Here’s what he told me about his experience.
I used the ideas from your business development module to identify my niche, hustle for meetings with key decision makers and eventually price a value driven proposal for a prospect who responded. I really hustled to get in front of him. After 3 face to face meetings and a long call, yesterday, we signed a contract with a retainer which is 5x of what I used to charge and a nice setup fee.
I was so excited to hear Sid’s good news that I thought this would be a good topic for today’s Sage post: what does it take to 5x your rates?
Services are not fixed-price
For many of you reading this, you may be under-charging your clients. Compared to both market rates, and to what you could charge for a given service.
In your case, 5x’ing your rates could be as simple as conducting a competitive price analysis with others to see where you stand. And then using this information to adjust your rates to match the market.
For others, 5x’ing your rates could be a function of supply and demand for your business. When you have more leads than you could possibly service, you can raise your rates comfortably.
There’s another set of you who should be plugging your current rates into a spreadsheet to see how each hour you bill affects your annual income targets. In Agency Course, we provide these calculators, and business owners are already seeing that they need to charge 5x their current rates to hit their income targets.
Many of you may find that you can’t adjust your rates, because you don’t own the relationship with your clients. Either you are a sub-contractor or getting clients from a fixed talent marketplace. The way you would 5x your rates is by building and owning your own relationships with clients.
Finally, there are some providers who are just so much more experienced that they already can confidently ask for 5x more than their nearest competitor, and have prospective clients eating out of their hands.
There are many ways to perform this exercise at different phases of your business. The results can be immediate like Sid, or spread out over a few years.
A real-world example
Right now I have proposals in front of me from 3 service providers. These proposals are for similar services, with only slight differences between each. So it’s not a true “apples to apples” comparison, but close.
Here’s the kicker: The lowest provider is proposing fees that are 1/10 as much as the highest priced provider.
And I’m really thinking that the more expensive provider is the best investment, even though they cost 10x more.
How is that remotely possible? Let’s break down why I usually don’t trust low-cost providers.
- The least expensive provider probably will require more work on my end to maintain the relationship. They will probably demand my time, not be able to think quickly on their feet, and their results will be average. That’s not really much of an investment, is it? It’s like paying money to someone else for the privilege of doing the work myself.
- Less expensive providers often don’t understand the strategy of what is being executed, so they can only be successful with a clear strategy in place. If they aren’t providing the strategy, then it’s my responsibility. More work once again.
- Less expensive providers will not be able to show case studies with previous results or a general vision for what I can expect in return from working with them.
- Less expensive providers will probably take all of the credit for the results and ask for a case study, even if it was my team that did all the work.
Any and all cash I save on this relationship could be eaten up by additional resources needed to accomplish the goal.
On the other end, a high-end provider can provide the following confidence boosters.
- High-end providers take work off my plate.
- High-end providers have encountered my exact situation several times before, and know the exact solution to apply and when.
- High-end providers think quickly on their feet and can make adjustments to strategy on a dime, which will usually double the results of the program vs. a fixed strategy.
- High-end providers aren’t driven by case studies or receiving credit. They are just obsessed with delivering results.
There have been many times when I have chosen low-cost providers thinking to myself “well, I have nothing to lose” – with the thought being that I could fail with the low-cost provider 5 or 10 times before the expenses catch up.
But in reality, there is a lot to lose. It’s not about money. It’s about time.
Time is our most precious resource, and it’s worth every penny you pay to get some back.
How can you 5x your rates?
The long term answer is by becoming a high-end provider. Anticipating the needs of clients, sharing your experiences, gaining confidence at each step of the sales process.
And if you don’t have experience? Go out and earn it. Prove me wrong that low-cost providers can’t be strategic. Prove me wrong that low cost providers can’t roll with the punches. Go above and beyond and blow away expectations on every project you deliver.
Do that, and it won’t take very long to become a high-end provider.
And if you’re already providing this level of service? Consider raising your rates!
No matter where you are right now, Agency Course gives you the tools you need to become a high-end provider.