BRX Pro Tip: Set Fees Based on Value
Stone Payton: And we are back with Business RadioX Pro Tip. Stone Payton Lee Kantor here with you. Lee, let’s talk a little bit about establishing fee structure. How do you go about setting pricing, fee structure?
Lee Kantor: Yeah, it’s funny, especially in professional services. To me, the only way to do it is to determine the value you’re providing, not the activities you’re doing. The tasks or the time you’re spending on something shouldn’t really be part of the equation when it comes to setting fees. I think the clearer you can make your case regarding your service in terms of the value you’re producing rather than the time it takes you to do something or what your service is the way to go here.
Lee Kantor: Remember that fees are determined by value, and if your prospect believes you can deliver that value, then the price really isn’t relevant. If it makes sense, if they know that you’re going to deliver $5 of value for every dollar, then it doesn’t matter what you charge because they believe that you’re going to outperform your fees. They’re going to be making money on your effort. So, you know, Seth Godin says “Price is a story,” and I’m a big believer in that, that as long as you have a good story, and you have evidence that you can deliver, then you set your price to what you want to sell your price to, and then just kind of explain the value, and then your prospect believes you are not.
