Don’t look away because you don’t run a business, this resonates with people who:
- Are underpaid (Australian woman earning on average 16% less than their male counterpart)
- Work extra hours for no reward, nothing, WHY?
- consultants who undercharge, or don’t charge, for their valuable services
I’ll get to reasons why we undercharge, but first, what happened to Wealthy Chick this time, and I’ll admit this lesson was painful as it was an (obvious) opportunity to charge a premium.
Lunch time I am contacted by a potential client to provide an Expert Opinion Report by the next day. I was free later that afternoon and a client had rescheduled, I’m in.
Then comes the dreaded question
How long will it take and what’s your hourly rate……
I ignore the warning and didn’t act like a Wealthy Chick. I jumped in with a short time frame and a low rate, completely disregarding the value I was providing:
- an expert opinion
- provided at very short notice
- in a professional report
Instead I focused on:
- Phew, I can replace income lost when my client rescheduled
- How nice the universe sent me this opportunity, lucky me
- Not charging too much as I want future work with this client
- Not charging too much as this was a simple job, for me
Why Do We Undercharge?
Your brain is probably already firing with so many answers, so lets breakdown my experience:
- Devaluing our services/ worth – because the work was relatively “uncomplicated”, for me, I decided to undercharge. The reality is that it took me 12 years to become an expert in a complex field, and undercharging devalued my efforts
- It’s better than nothing – I felt relieved that I would be earning something, instead of nothing, when I should have focused on the right price
- It’s about experience and building relationships – which it can be, however this was not the time to discount. The client called me to help them solve an issue, urgently, because I had the expertise and they needed me
- Embarrassed to ask for what we’re worth? – I’ll admit I worry people will laugh, loudly, when I quote my full rate, and we’ll just end up negotiating a lower price. This wouldn’t have happened here, and in the unlikely event it did, the negotiated price would have been higher than my discounted rate.
- Not Charging a Premium for Urgent work – I was providing this client with valuable, game changing expertise at very short notice, and instead of adding a perfectly acceptable premium to my rate, I gave a discount.
- Not believing/ communicating the value of my services – this is probably the crux of the matter, I question my value, who am I to be charging so much, surely there is someone better than me, blah blah blah!!!!! I am exceptionally good in this area, and I need to own that, communicate that and charge a premium.
How to Own and Understand your value and charge appropriately
When I was discussing the final report with the end client, lawyers by the way, one commented:
“It must feel great to be the smartest person in the room”
It did, ego inflated, but it clearly demonstrated how much I had undercharged and why it won’t happen again:
- I am unique, my services and experiences are valuable and credible (own this!!)
- What is easy for me is actually difficult/impossible for others, charge a premium.
- Repeat back to the client the value you provide then state a rate using language that demonstrates the deal is done (see underlined words). In this instance I should have said “To clarify, we agree in less than 24 hours to provide a report that is critical to our clients success. I will produce this report on short notice however I will need to adjust my schedule and charge a premium to ensure we meet our clients urgent deadline, my rate is $x (x = normal rate plus a premium)”
- Clients expect to be charged, and while everyone loves a bargain, when it comes to urgent critical services, clients will pay a premium for your expertise.
- Your value proposition is likely to be your story, it is unique and special, so tell it confidently, in your voice, your language and the right clients will connect with you
I hope you enjoyed another peak in to the life of this Wealthy Chick, and I’d love to hear your stories. I’ll touch on salary negotiation and how to get rewarded for unpaid overtime, even when you are on a salary, in a future blog.