Monthly Archives: August 2016

Pricing in the professional services industry is nothing else than a value we give to an experience.

When we spend, there are pain points such as getting the car repaired and there are pleasure points such as a manicure. Sometimes we love to spend money on an experience that gives us a good feeling about ourselves or improves our general well-being. You probably feel great when you can buy a bottle of champagne on a weekend trip or book a wellness spa instead of an ordinary hotel.

We are normally way beyond the basic needs of the Maslow pyramid. Most of the people I know don’t really know how much a liter of milk costs. We happily spend money on holidays and luxury items. Being in a managerial function, this is what you do. You slave away and on weekends and holidays, you indulge. You want luxury in your lives. I used to consider myself a “high maintenance chick” with a feel for quality clothing, weekend trips to NYC and a no-budget policy for daily expenses. I used to say that I apply Reaganomics to my personal life (I spent more than I earned).

Today, I am more sensitive to this topic. As a solopreneur, I learned what it meant not to have money at all. This was a healthy experience (which has now found an end). What about you? You just started your business a year ago. You still can’t pay the bills. You still depend financially on your spouse, your parents or in-laws or the state? Or maybe you are an expat spouse, who has not found a job yet?

I hope these four methods will help you put a price tag to your service offering.

#1 Create your Client

So, before you even think about service packages and pricing create your clients. Imagine you can decide how your client functions. Understand what bothers them. Understand how they would love to spend their time. Understand what their pain and pleasure points are. Keep an inventory and write down the story of your ideal client.

#2 Target the Threshold

For some reason it is always easier to pay an amount that is slightly lower than the next bigger amount even though the price might be ridiculously high in the first place. For example I accept to pay CHF 95 for a manicure but if it was CHF 100 I would not buy this service anymore. Target the next big number but then stay slightly below. You should do market research and find out what competitors are charging for similar services but your clients normally don’t just come to you because of your price. Often it is a mixture of trustworthiness, competence that you are eluding, recommendations and good reputation. If your service was interchangeable they would get it online for free.

#3 Package the Pain

The pain is in the beginning. I prefer to pay for packaged deals for example for a holiday and I prefer to make the payment a few weeks before the holiday. I have introduced this idea to my clients as well. For you as an entrepreneur, it means less minute-counting, fewer invoices, less hassle and better cash flow (if you can agree advance payments). BUT for your client: It means that they have the pain once and then for a long time they feel good and enjoy your service.

#4 Reduce the Rebate

In the beginning of our business we tend to work with a small group of people we already know. We give them better prices than our usual clients. While it is natural that you want to give a favourable rates to your family members and their friends consider the impact this will have on your annual turnover. Over time you need to reduce those rebates and freebies. I prefer to work pro-bono once in a while and clearly call it charity. I don’t like to work with clients who cannot afford me or don’t know how to pay for the coaching.

If you feel insecure about your performance or if you test a new service you can run a “pilot”. Ask potential clients and friends to spend their time and to give you feedback and suggestions in exchange for a “free ride”. Make sure that you communicate the real price value of a free service. In Switzerland, you have to have a price list. Even if you won’t share your prices on your website, you can send a price list to clients on request.

If you feel under pressure from larger clients, let them know on the invoice which services you provided in addition to what you got paid for. This happened to me in the early days when I was too accommodating in order to win a corporate client. I avoid these deals now. If you gave reductions or rebates in the early days of your business, reduce them over time or return to the price you have on your price list.

Let me know how you will you create a good pricing model for your services and contact me if you struggle.

 

Angie

 


Guest Blog by Reinild van der Vecht

My relocation story starts like many similar ones.  It’s been three years since I moved to Switzerland following my husband, who got a great job here. For him going to work every day was business as usual. My challenge to make a happy life here has been quite a struggle. I was going to three changes:

  1. The career I had back in Holland needed some reviewing; it felt right to leave and start orientating on new possibilities.
  2. I was pregnant with our first child.
  3. The relocation itself: starting over in a new country.

I started on the third part: integrating into Zurich by taking intensive language courses and following the women’s integration course organized by Stadt Zürich. I enjoyed it! In the meantime I had my medical files translated and changed into the Swiss system of pregnancy controls. Via my husband’s company, I became part of the International Dual Career Network (IDCN), where I started orientating on the Swiss job market. Also, I was quite busy organizing our move and the administrative tasks. These first months I had lots to do and to discover.

Then after almost 6 months, our son was born. Finding a new rhythm with the baby kept me quite busy, not to mention all our family and friends visiting us. I made new friends, new moms like myself I met at the “Mütterberatung”, at the integration course and at the “Rückbildung”.

Three months after the birth I was making plans again: I was visiting network events, getting my B2 German diploma, I planned to send out applications and I put my son on the daycare waiting list. By the time he was six months, I remember I felt like he was strong enough to be in daycare and I really needed time for myself. I wanted to be seen as Reinild again, not as ‘just’ someone’s wife or mother.

That’s when the real challenge started.

I applied for several jobs, tried to have a daily and weekly routine with my son and friends, but somehow I felt lost. Looking back, I didn’t really accept the situation I was in. I enjoyed the time with my son but was missing my professional life. The applications I sent were too different, not very well targeted.

And to be honest, I didn’t send that many…

I decided I needed help. With a coach, I researched my situation, my strengths, skill set, ideas, and dreams. We brainstormed what jobs and companies would fit and I checked on additional education possibilities. Following an additional educational program at a Swiss university made the difference. My son went to daycare (he was 18 months by then) and I had time to go to school and to study. It was hard because the program was new to me (I was changing industry), everything was in (Swiss)German and making a real connection with the other students was not that easy. But I managed and eight months later I received the certificate and was eager to find a job.

This time, I really took it seriously. I started telling friends what I was looking for. I asked some of my colleague-students for lunch to discuss their careers and companies. It helped me to figure out what I wanted and which job titles and companies fit that. In the meantime, I followed a very hands-on workshop* on how to apply and get hired in Switzerland. With a big portion of luck, I found a job and I love it!

My lessons learned, which I hope will help you:

  • Take your time to relocate physically and emotionally.
  • Acknowledge your situation and accept it.
  • Make a plan, set achievable goals, be confident that your competencies are valuable wherever you are.
  • Broaden the way you look upon your life and career. I once read an interview with a Swiss director saying: “Es sei nicht tragisch, wenn man seinen Traum nicht leben könne; es gebe immer eine gute Alternative.”

 

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Reinild van der Vecht works as Process Manager at a Swiss cable company. In 2016 she successfully completed the CAS Logistics Strategy and Supply Chain Management at ZHAW School of Engineering. She lives with her family in Zurich, volunteers as treasurer in her local Turnverein Fluntern and is an active member of the Powerhouse Network.

 

 

 

 

 

 

 

*Reinild had joined one of our first HireMe! Groups. Join the next one.

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This German booklet on intercultural competence gives a good overview of the topic and uses layman language to explain basics of intercultural dimensions, culture standards and differences based on research by Hofstede, Trompenaars, and Hall. The booklet also gives ideas on how to develop intercultural competence and has pragmatic examples, that are relevant in today’s business world. An example is feedback culture and how German managers are often perceived as harsh and unfriendly when giving feedback. German managers are willing to listen to such tips as often they do not intend to be unfriendly, but it is the way they are brought up. It would be helpful to have a similar booklet in English, especially if you would like to give it out in training. If you are a German-speaking internationally mobile manager the booklet is ideal for you especially when you are confronted with intercultural communication for the first time. Due to the readable pocket book size, it can be easily read on a plane or train ride to your next international business negotiation.

I recommend this booklet with 4/5 stars.

Angela Weinberger