One of the biggest challenges of hiring and offering services in the online space is the rates for services. Today I’m sharing some of my pet peeves around the rates that support staff service providers are charging and offering a few ideas about what we can do about it.
Support staff are a critical part of moving a business forward. After all, the whole point of scaling is to outsource and leverage human capital to help business owners do their jobs better. But when it comes to pricing, it can feel like the wild west.
Likewise, if you’re a service provider such as a VA, OBM, or PM, it can be tough to figure out how to raise your rates in a way that works for you and your clients.
Pricing Pet Peeves
1. No Standard Rates
I hear from business owners all of the time that are amazed at the variation of rates that service providers are charging. They want to hire amazing support staff, such as virtual assistants, online business managers, and project managers… but what these service providers are charging is all over the board. The range can be anywhere from $3/hr (for a non-US based provider) to $60/hr.
“The reality is that these people are charging whatever they want.”
There is no industry standard, nor is it regulated. Business owners are left wondering: “Can we trust the people who charge $3/hr?”, OR “Are we going to get our money’s worth for $40/hour?”
2. Arbitrary Pricing
If you are a service provider, chances are that when you started out, you probably undervalued yourself. You are critical for these business owners to scale. They need you so they can grow their business.
That being said, one of my biggest pet peeves is when someone comes into the field without a ton of experience, claims a title, and attaches an arbitrary price for their services.
Instead of charging a random price, you need to look at what you are charging vs. what you are delivering.
3. Raising Rates Without Changing the Offer
Often, when service providers enter the market they tend to undervalue their work. They get comfortable at a price, but realize that they have undervalued themselves – so they raise their rates without changing their offer.
The solution to this is to enrich your offer and make it commiserate with the work you are delivering. Always make sure you are up-leveling what it is that you are delivering.
One way to do this is to outline exactly what your clients are getting for a certain price. If clients know exactly what they are getting, they can judge for themself if the package is worth the investment.
Continue to enrich your offer, then go ahead and increase your pricing.
“With a greater offer, you’ll attract higher level clients.”
4. Raising Rates Because You’re Maxed Out on Time
Let’s say you have 25 hours available each week you can work with clients. Once you fill those up, most people will tell you to “raise your rates.”
I disagree; you can’t raise your rates unless you sweeten the deal. You may be meeting your income goals, but your client doesn’t care. Clients care about what you are delivering to them.
Don’t just raise your rates because you are maxed out on time; that’s not your clients fault. Again, you need to enrich your offer. Try to anticipate their needs, and overdeliver.
“It all comes back to enriching your offer to make it easy for your client to pay you more.”
How to Set Pricing as a Service Provider
If you’re a service provider, at some point you have to transition from charging hourly to charging for an outcome. Look at your deliverable, and figure out how you can turn your hourly rate into package pricing or a retainer package.
Look inside your business and quantify what it is that you need, how many hours you have and what problems you can specifically solve. What are your unique skill sets that solve your ideal clients’ problems?
Don’t just charge an arbitrary price. Think about what you deliver, and what the value is for your client. How much time and effort are you saving them by providing the deliverable?
Don’t undervalue yourself, but make it easy for someone to hand over money because what you are going to deliver to them is far more than what they can do for themselves.
Don’t forget to check out the Director of Operations certification program, which teaches you the systems and processes that I used to be successful and well known in this space.
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