I recently broke my arm in a cycling accident.
I was in a sling for a few months and I was using the NHS’s physiotherapist to try and get some movement back. Eventually, I decided to speed the process up by using a private sports physiotherapist.
I was recommended to a guy named Mark, so I booked a session for an hour.
At no point did Mark inform me of what the price was. I had a vague idea because my friend had recommended his services to me, but Mark hadn’t actually told me anything.
It wasn’t until I sat down in Mark’s office that I noticed a sign on the wall that said:
“Please note my charge is £30 per session.”
At the bottom of the page was a date. The date was 5 and a half years ago.
I thought this was absolutely crazy. This physiotherapist had not changed his hourly rate for 5 and a half years!
Seeing this sign was the first time I had any idea of the price. I could have had one of two thoughts. Either…
“Wow! That’s expensive! I’m going to have a fee dispute at the end because he never told me the price. Had I known it was that price I probably wouldn’t have gone ahead.”
“This guy is supposed to be a top professional, he works with some of the local professional sports teams. I was expecting a much higher price and I would have paid it.”
I actually thought the latter. But either way he would have lost out because the customer would be unhappy, or he would lose out on some money.
The problem is the customer doesn’t see any value in an hourly rate.
I didn’t go to that session to spend an hour of my time with him. I went because I wanted my shoulder to feel better, I wanted more movement in my arm. That’s where I saw the value.
So how could Mark have done things different…
You can watch the video here for my thoughts.
Offer a Diagnostic Session
For a brand new customer, the first thing Mark might have done is offer an hour long diagnostic session.
In this session he might ask some questions, take some tests, assess the damage and learn more about the situation. He could then provide a report, recommend a few stretches and some possible next steps.
He might charge £40 for this session.
It’s still an hour session, but now I can see the value because he is describing what is happening and the diagnostic process is revealing information that is of value to me.
It still takes an hour, but he is charging a 33% higher price.
Offer a Choice
Once Mark has diagnosed my arm and is recommending next steps, he might offer to book me in for 10 sessions over a 10 week period, and charge £300.
This would give me certainty over price, and would also lock me in for 10 more sessions.
Or, he could provide a second option.
There were lots of machines that he used on me to get the movement flowing a lot more. There could be a ‘fast-track’ option that gets the same results in half the time. He could charge the same £300 for this service.
Now which would you choose?
If you could get the same result in 5 sessions that you could in 10, for the same price, would you not choose the quicker option?
The value for me as a customer is not the hours spent doing the work, but the results, and how quickly I can get those results.
From Mark’s point of view, he has doubled his profits.
At this point Mark has already doubled his rate, but what would happen if he decided to charge the fast-track service at £400.
Most people would expect to pay a higher price for the premium service, which is what the fast track option provides. So he’s making even more money.
Clients aren’t interested in buying an hour of your time, what they are interested in is the results and how quickly they can get those results.
When you focus on results instead of hourly rates, you can charge a much higher price. Think about how you can help get your client a better result faster, then price accordingly.
If you would like more help on this topic or would like to learn more about value pricing, I run a free live online training session every month. You can attend and ask me any questions you have. Click here to register and I will send you an invitation to the next session.
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Wishing you every success on your pricing journey.
Chartered Accountant, Public Speaker and Amazon No.1 Best Selling Author of “Effective Pricing for Accountants”
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