There are many ways to prove your value to business owners. I am still seeing people charge $500 or $800 for a month worth of work! But when you know how to quantify the value you can put on the table, your clients will not hesitate to pay for the amount you set.
Here’s how you can do it:
Digital marketing agencies tend to offer a vast range of services. However, they do not get to the point and not understand why they are offering those services in the first place. It is essential to make sure that the value you will be bringing should be quantifiable or measurable.
Though website design or social media content are good services to offer, both are difficult to quantify. This means that the value they bring can hardly be measured. With this, I would like to focus on paid ads - because for every dollar I put in, the investment return can be easily measured.
The most important thing to remember before you do anything is to take a step back. From that point, see if your primary service brings quantifiable value.
Next, know the customer lifetime value of your prospective clients. When going through this step, determine how much a customer spends with a business throughout their lifetime with that business.
It would be best if you focused on businesses that have high customer lifetime values. Companies with high values manifest how willing and capable they are of paying the charges that your services are worth.
For example, hair salons often charge $10 per haircut, while spinal decompression clinics get paid $3,000 per patient. Looking at the income they receive, it is ideal to offer your services to the latter because they need to have just one patient to recover the cost they will be paying you.
I previously mentioned how essential discovery calls are to know more about the businesses you are dealing with. During the call, it is vital to ask them the number of leads they can handle every month and their close rate.
Some business owners may exaggerate the number of leads they can handle. You will know if they really have the capacity to handle this number by asking if they have systems and processes in place to support those numbers.
It is through identifying their close rates that you can quantify how much value you can add.
The next step after knowing their capacity is doing the math for your charges. For example, if you are generating a client 50 leads every month and their close rate is 20%, you can confidently bring them ten long-term customers, every month.
Bringing in 10 customers with a lifetime value of $2,500 will give them a total of $25,000 per month. After knowing how much you bring in to them, decide on the fraction you will charge. A good fraction would be 10%. So for just $2,500, you are bringing them a total value of a whopping $25,000.
This is what most business owners don’t spend much time thinking about. They do not understand how much value you are bringing to the table. Without doing this, it is so difficult to justify how much value you are bringing to the table.
It is only when the value exceeds the price that a sale is made. Secure a deal by genuinely proving that you are bringing more value than what they spend.
Let us say that you are bringing a total value of $30k to a business, with a customer lifetime value of $3,000 while bringing in 10 customers. Why would you charge a fee of as low as $800?
Do not lowball yourself. This is a cutthroat industry.
You have to stand firm, know how much value you can provide, and charge the amount you are worth.
Understand how much value you are bringing to the table. Charge what you are worth and prove to them that the value exceeds their cost.