Putting a price on your value is more than just complying with “Fee for Advice / Service’ or satisfying the Governments legislation. It’s about being paid what you are worth.
The way that advisers charge for their advice and service remains a contentious issue across all advice related industries and professions. And our industry is no exception. Now more than ever, it has become increasingly important that advisers have a pricing model that is clear, consistent and that appropriately compensates them for the value that they provide to their clients.
This is more than just complying with ‘Fee for Service’ or satisfying the Government‟s legislation, it‟s about implementing a pricing framework into your business that is both commercial and sustainable, now and in the future. Here are some tips to help you make this happen.
What to consider when deciding on a sustainable and profitable pricing
- What does it cost my business to deliver initial advice and ongoing service?
- What level of profitability do I need to build in?
- What premium (if any) do I include to cater for the “intangible value”?
- Does my price represent value for money?
- Is my price competitive?
- Can my clients afford to pay?
- Is it sustainable and am I in control?
- Do my clients know the value they receive for the price they pay?
- Is my business being fairly compensated?
“Defining and articulating value is the foundation of setting a profitable and sustainable pricing model”Click to tweet
Regardless of whether you are self employed, salaried, risk only or provide full advice, seeking the necessary information and guidance to help you answer these questions and implement a pricing model that is right for your business will be critical in helping you drive sustainable business growth.
Some other things to think about . . .
PRICE should not be considered in isolation.
In order to confidently price your value, there are a number of other considerations that need to be addressed:
- Identify and be clear on your ideal clients or target markets.
- Understand the specific needs of these clients.
- Be clear on what they really value.
- Have a compelling advice and ongoing service offer that addresses their needs.
- Have a pricing methodology that at a minimum covers your costs and builds in a margin for profit.
- Make sure your end to end engagement process is built around and delivers the desired client experience on a consistent basis.
Improve your “pricing confidence”
When do you confirm the actual price? – Consider the best stage in your engagement process to communicate the actual price with your clients?
What if you ‘hit rock’? – Make sufficient allowance for discovering additional complexity in your clients’ situation and ensure the cost is worn by them, not you.
Pricing committees – Discuss the price you wish to charge your client with someone other than yourself, before you tell the client.
If you would like any additional information, or would like to discuss how Experience Wealth Consulting could support your business, please get in touch.