The value resold

A few months ago I advised a client on some potential tax issues he was concerned about. It took a while to research; well mainly to check as I had good knowledge of the issues. It is always important to check one’s memory against the latest legislation and case law as things can change.

What my client was looking for was not a tax scheme – I don’t do those – but the answers to a series of questions. It was a “what if?” sort of project.

When I was asked to quote in the first place, as always I thought about the value to the client. How valuable could it be to him in terms of money-saving in choosing the right path? How valuable was it in terms of peace-of-mind knowing what course of action he should take, and what to avoid doing?

I quoted a fee which he accepted. It was worth doing from my point of view because I could make a decent profit taking into account my overheads and time, but the determination of price was nevertheless the value to the client.

More recently I have been asked by another new client virtually the same set of questions and “what-ifs?”. Really, subject to a few minor tweaks, I can give pretty much the same advice. However, it will take much less time and other costs will be minimal.

Should I charge less? Of course not! I believe the value to the new client is much the same as to the previous client. I can bill him the same, and he will be happy paying for the money-saving and peace-of-mind. I know that because he has accepted my quotation.

Those of us who provide advice, knowledge, or if you like, our intellectual property, have studied hard for a long time, and have constantly to keep up-to-date with the latest happenings in order to give the correct current advice.

We have earned our value and deserve our reward. Why should we sell ourselves short and think in terms of labour costs? Never undervalue your own expertise when selling to clients.

The value of clients and the value of you

In many businesses including mine, owners feel obliged to chase down what they see as the competition, and match their low prices. It is a race to the bottom in terms of fees and makes the profit margin on many clients very low or almost nothing. Yet we are in a business to make a profit, or how else will we live?

This race to the bottom often involves small businesses trying to compete with large ones, who “pile them high and sell them cheap”. There is of course room for such big businesses otherwise they would not exist, but it is impossible for them to offer a good personal service individual to the client. That would be too expensive for them.

Personal service is the major advantage a small business can offer. Of course that still comes with a price, but the client who pays more and receives a great service will feel more valued, and value you and your business. A client like that will recommend you.

Conversely, if you try to chase down the market to a low fee level such as that offered by the big boys (and girls) the sort of client you get will value you no more than the big providers, which is probably hardly at all. You will be just another commodity to them, and not appreciated and valued or recommended. Of course because of the low fee they will be of little value to you.

Do not sell your services or your business cheap, and don’t sell yourself cheap either.

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