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Pricing Strategies – How to Charge More

Pricing Strategies – How to Charge More

Offering the lowest price is not a good marketing strategy and there are several reasons why. First of all, it cuts into your profits. If you have to continually offer lower prices than your competitors, the increased number of clients you’ll get could be worthless because you’re still earning less revenue.

Second, what if someone undercuts you? Offshore VAs have a huge advantage when it comes to undercutting and charging less to their clients. Let’s face it, it’s a global economy and they can afford to make a lot less per hour. You can’t.

Instead, you should charge well for your services. There are several ways you can set your rates higher and still get clients.

But first, let’s start with…

Perceived Value

Setting your rates isn’t based on actual cost, geographic location, how long you’ve been in business, etc., but on perceived value. Perceived value is the worth that a service has in the mind of the client. If you can grasp that perceived value is totally different from cost, this makes pricing higher much MUCH easier.

An easy example of perceived value is a tangible product. In the 1990’s, a CD sold for $14 new. Never mind that it’s a plastic disc with data imprinted on it whose actual material and production costs were a couple of dollars. People expected to pay $14, so record companies could charge it. But it’s a little harder to explore this concept when it comes to the services that virtual assistants provide because business owners are told in books, at marketing events, by their colleagues, and in Facebook groups that they need to “outsource to a VA” but totally discounting the part about value. When told to get a VA, the response is usually, “where can I find a cheap VA?”

I want to be the one to tell you, those types of clients are NOT your ideal client so stop attracting them. We know that we can’t charge more for our services than the market can bear, but I hardly EVER see that happening. Instead, I see many VAs performing a service that adds significant value to their clients’ businesses, but the VA doesn’t realize this and continually undervalues what she does. This leads to undercharging and frustration and eventually burn out.

Here are some ways to increase your perceived value when first contacting a client.

  1. Respond within a reasonable period of time. I hear all the time, “I reached out to a VA weeks ago but haven’t heard back.” I get contacted via email, LinkedIn, Facebook, etc. so make sure to set it up so that you actually receive these notifications so that you don’t miss out on a chance to get a client.
  2. Act like a professional when you’re on the phone and in email. Don’t apologize, explain yourself, give excuses, or be ambiguous. And above all else, GIVE A SHIT about the client’s business. Don’t think this is important? Think again. This complaint from clients who have used VAs is right up there with “she goes MIA all the time and it takes forever to get a response” and “she’s always too busy for me.”  (Just a note, I rarely hear, “I had to let her go because she costs too much money.”)

‘Perceived’ is the key word here.

So, how do you use perceived value to your advantage? You do it by understanding what your market perceives as valuable. In other words, what qualities of your service would lead your clients to pay higher rates? If you don’t know, simply ask them.

Emphasize Uniqueness

Figure out what’s unique about you or the service you provide. Does this help my client’s business or provide value to your clients in a way other virtual assistants do not? You don’t always have to the BEST darn VA out there who tests out really great on a Mavis Beacon typing test, but rather the only VA that uniquely meets their clients’ needs. Here are some examples:

  • You have a specific background that greatly helps your client do business in a particular industry.
  • Your tone calms the client down in such a way that they find it hard to work with anyone BUT you.
  • You not only design beautiful websites, but you understand marketing to a point that you design websites that convert visitors to clients <– invaluable!
  • You speak multiple languages which opens up your clients to new markets.

I’ve had clients tell me that I have a knack for making technical terms way easier to understand or I uplevel the technical jargon for those who are at an advanced level – this is because that’s what I did at my corporate career for more than 20 years. What special or unique things about you can you emphasize?

Don’t know why you’re unique? Talk to your existing clients and ask:

  • Why did you choose me over other virtual assistants?
  • How can I make my services invaluable to you?
  • What service/deliverable can I offer you to make my value increase twofold?

Customize and Personalize

One area where it’s hard for many virtual assistants to compete is personal attention and customization. Clients are generally willing to pay more for a service that’s designed especially for them to meet their individual needs, so if you can find a way to customize your services or emphasize this customization as a key benefit, you can set your rates higher.

When I teach VAs how to structure their packages, I tell them to create a level within their packages to allow for customization and personalization, such as giving out your cell number to the VIP clients or providing quicker turnaround. You maybe don’t want to do that for every client, but you can do that for the ones who want this level of access to you and you can charge more for it.

Aim Higher

Sweetie, you know I love you. And I say this with love… Maybe you’re targeting the wrong market.

There is always a segment of the population that’s willing to pay more for higher quality service. If you can convey your value to this segment, you’ll have no problem setting your rates higher. However, in order to do this, you have to convince this market that your service is high-quality. Identify this higher-paying market segment and do some research to see why they would pay more.

For those in my training programs, I tell this story often…

While at an event, we had to do a speed networking exercise in which you turn to the person to your left and talk about what you do then do the same to the person on your right. The person on my left was just starting out and when she heard about my services, she said, “I need you!” But because she was just starting out, she said it would too far outside her budget. When I spoke to the person to my right, she was already in business and was a much better fit for what I offered. My rates seemed like a drop in the bucket to her.  Plus, the business owner on the right didn’t have to be convinced of my value, she already had VAs working for her. How else do you think she got to be so successful 🙂

Setting rates low isn’t the only pricing tactic available for virtual assistants and, in fact, it is probably the worst. Instead, look at your business and your services and find ways you can set rates higher to make it more profitable for you and your market.

Want more guidance to raising your rates? Check out my free on-demand training presentation,  “HOW TO GRACEFULLY ANNOUNCE AND HANDLE A RATE INCREASE WITH CLIENTS” at http://virtualassistanttrainer.com/how-to-raise-rates-free-training/.

 

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