I spent this week discussing with my mentor and coach the intricacies of fine-tuning my pricing strategy.

What I did not expect, was to end up talking about my self-esteem.

It is the sign of a great coach when you start on one topic and dig deep into your values and belief system and end up surprising yourself with answers to a slew of seemingly unrelated questions.

But I digress…

My pricing discussion came about because I had just finished helping a customer finalize her audit.

At the initial signing of the contract we had made a very clear point to the auditors of negotiating a fixed fee with no overruns to avoid what is known as “death by a thousand cuts”.

Unfortunately, this is exactly what has happened. The auditor has circled back after the audit and sent their hourly timesheet, which shows that in fact, the work has taken nearly twice as long as expected.

All the reasons are laid out in excruciating detail along with a list of each person who has been involved and the hours worked broken into 10-minute segments…this includes the person making photocopies.

Now my customer is in a bind.

She has already invested a lot of time building the relationship with the auditor and they have a very solid working knowledge of her business. A hope exists in my customer’s mind that the overrun in hours worked might only be a 1-year phenomenon given unique circumstances that the company went through that year.

However, in my experience, overruns are a yearly occurrence and renegotiations are also an annual event with auditors.

Here’s the underlying problem: auditors, as well as other specialist accountants and lawyers use hourly rates. 

We had negotiated a fee based on value, not on hours worked. If they had worked fewer hours on the audit the fee would not have decreased. It’s ultimately not our responsibility to pay for additional work performed above and beyond an agreed upon amount, especially when the auditor made no indication at the point when the fee was at risk of being increased that changes might have to be made.

So back to my pricing question: How do I price my services based on value and avoid a minefield of losing money and having to go back to the client and re-negotiate my fees after the completion of the project?

Ultimately,

1. I have to be comfortable charging my value, my self-worth.
2. If I believe I produce work of the highest quality, which I do, then I should charge a premium price to appropriately compensate me for my time and effort
3. It’s being able to say, “I want to let you know going forward that this is the value of what I do…”
4. If it takes longer to complete the project than I had expected then I continue my work until it is completed and learn from the experience.

But never, ever go back and ask for more money!

If this is a new area of assertiveness for you, and it is for me, then once again it’s time to grow…