If you have a service business and you bill by the hour, and you’re not making what you want, keep reading.
You need to break the chain between your hours worked and revenue earned. To do this, you must shift from selling time to selling value. Put less emphasis on the time that a job takes and place more on the value that your customer will receive. Here’s an example:
Selling time: “This job will take 32 hours at $95 per hour.”
Selling value: “This should save you at least $100,000 during the first year,
and its cost to you will be just $8,000.”
How do you do this? Suppose you are a graphic designer creating a new logo, brochure, and letterhead for a growing company. Ask your client questions like these:
“What do you want these new materials to do for your company?
“How much will this be worth to your company if it upgrades your image?
“Will it double your sales? Boost your little company to a big company?
“That could be worth a couple of million dollars — and my design fee is a paltry $8,000.”
Now, you may not say it exactly this way, but that is the attitude you need.
Ask any company that has had a lousy logo design. They know the cost of poor design. They know how their company has been held back by not having quality marketing materials — whether print or digital.
And if they don’t know this, then they are probably not a good client for you!
The instant impact of selling value, not just time
When you sell value as I described above, you focus your clients on what they want most — results: more sales, higher profit, increased exposure and recognition, reduced costs, greater ease.
On the other hand, when you sell your time, you focus your client on what they dislike: spending money, monitoring your performance, worrying about getting cheated.
When you sell value, you must first identify the value you bring to your client. You also focus on how you can provide even greater value to them and how you can communicate this to them. This is the route to their hiring you to do follow-on work.
You feel the impact immediately. Business becomes more fun. You get to raise prices. You work with clients that don’t need convincing. You don’t need to justify what you are selling, because they clearly want what you sell.
What value do you provide?
If you aren’t clear about the value you provide, the benefits that you bring your customers, and what sets you apart from your competitors, you cannot emphasize selling value. You are stuck selling your time.
If you are unclear about the value or benefits that you provide, you need to find this out. But how? The answer is quite simple. Call your clients and ask them this: “Why do you do business with me rather than with someone else?” This is a most enlightening exercise, one with multiple payoffs.