Business is ultimately about making money and every business owner would like to make more money than they currently do and preferably for less work.
But how can an IT services business charge more for the work they do and services they offer? Read on for 10 ways to charge more…
1. Increase Prices – this is an obvious one, easy to say but perhaps less easy to do, or at least it may seem like something you can’t easily do without risk as some customers may walk if you raise prices for your IT services. However in many cases higher prices can lead to a higher perceived value which can in turn contribute to sales. Even a modest increase can have a significant impact and most or perhaps even all customers would be willing to pay, as long as the service is good.
2. Remove non-profitable low cost services from your offerings – concentrate on those which generate more profit for your time. That is unless the low cost item is a deliberate loss leader which brings in new customers that you can later convert to your high priced items. Weigh up the benefits of such low cost items carefully and ditch any that don’t make the grade.
3. Log more time – this doesn’t mean go out and do more hours of work, it means make sure you actually log every minute that you actually do work… no more free lunches! Your time is valuable and those 5 minute phone calls or any other small task soon add up. Using tools which help you log your time more efficiently will obviously increase your logged time overall so log it or lose it!
4. Add value to your service offerings – clients will be more prepared to pay more if they see more value added. Everybody likes to get more for their money. That value can even just be in the form of better guarantees for service provided. You can use an SLA to ensure you meet the service levels you are promising and measure it against past SLA data to show how it is improving and to clarify to customers exactly what service they are guaranteed to get.
5. Collect and publish good references and testimonials – when a potential client is not sure if you are worth the price you are asking, a good word from existing customers can help with convincing and closing the deal. Your customers often have a better idea of what matters to them than you do and their opinion is typically considered more valid by their peers.
6. Increase the perceived value you offer – promote new benefits to existing services, add tiers for higher levels of service, re-position your business in a way that seems like it offers higher value. For example compare books to self-study courses – the same info may be included in both but a course seems like it has higher value, even if it is still self-study like a book, and so it often costs more.
7. Educate your customers – make sure they know the true value of the service you are offering. You’re an expert in the field, an IT professional who will resolve their problems so their business can grow, make sure they know exactly how much they benefit from your service. Quantify precisely what you provide them with.
8. Check out what the competition charges for similar services – if everyone else charges more than you, then you can charge more also. If their customers are willing to pay them that much for IT services then they should be just as willing to pay you that much. Compete on quality, not price.
9. Build up your brand – a recognized brand is typically seen as offering more value and worth paying more for, even if unknown competitors offer something better. Spruce up your website, get a fancy new logo, make your brand highly visible on everything you produce, dominate the relevant social network channels, be seen everywhere your customers gather, online and offline. Become the recognized leader in your area and your customers will be more willing to pay a premium for that.
10. Don’t be afraid to lose customers – specifically those who are not profitable enough for you or you may even lose money on. Better to have higher paying customers which you can take better care of, than bazillions of unprofitable customers who use up all your time and end up getting a worse service from you, which ultimately hurts your reputation.
A few small tweaks to your offerings, careful re-positioning and appropriate price increases can all add up to a healthy boost in your income without annoying any of the customers you actually want to keep and enabling you to offer a better service overall – everyone wins!
Until next time,