Gerry Westwood is a fellow marketeer and good friend of Gencia. He currently uses LiveWire Campaign (our bespoke DIY email marketing tool) to send a newsletter to his client base bi-weekly. He says it's a great way to stay on their 'radar' and when a suitable project comes up they immediately think of him.

His '1 minute reads' are always witty, intelligent and insightful but his latest effort really resonated with me. In fact you could say he was 'strumming my pain with his fingers' when he put pen to paper.

Here it is, in all its glory:

Do you feel you sometimes undercharge for your services and clients get a lot more out of you than the value of invoice you present?

I don’t mean projects where your input is easily measured and costed (like web building) but those where it’s your knowledge, creativity and experience that are being bought.

Many SMEs do feel they undervalue their services on the invoices because it helps get the business and cement relationships with the client. But undervaluing is only good business for your client and it won’t cement the relationship because you can come across as weak. It’s also difficult to move from this position when repeat business comes along.

You may say “I charge what the market will bear” but in reality, what you charge for services is pretty well already set in your head and a lot of the extra services you provide are given away as freebies.

With relatively small projects, gauging how much you should charge (your worth) is relatively accurate based on hours taken, but once a project creeps up and over say £10K then costing your value is less straightforward.

Your earnings history also determines the comfort with which you quote for a job. When times are lean, your charges might be lower than you’re truly comfortable with. You may also assess the cost of a job as a bit high and feel a fraud charging at this high rate. Will the client still buy it?

This is doubly difficult with online projects because the client may not have a real vision of the outcome and how your services will lead to success. The charges you arrive at may have more to do with fitting their model than justifying the full value of your offer.

As your charge rate is already fixed in your head, changing this mindset isn’t going to be easy even though you’ve had positive feedback from previous clients as to the quality of what you deliver – which would’ve amply justified a higher figure.

One way to get round this is to get a piece of paper and write down everything you offer clients as part of your standard service.

Now select your top 3 or 4 clients. Write down everything (and I mean everything) you actually did for them. Extra time spent, follow up phone calls, research, amends on amends, anything you did and didn’t charge for.

Estimate the value of these “extras” whether by time or whatever, but list them down. Add these to the original invoice total, to find the minimum your value was worth.

Now double this new figure to give the maximum true value of what you offer.

So if you invoiced a job for £1500 and your extras came to say £500, then your minimum real value is £2000 and your maximum is £4000.

Fix this concept in your head as this is your perceived value of what you’re really worth. Your next invoice should more truly reflect your worth.
 
Where you once might have quoted £2000 for a service, you might now quote somewhere between £2600 and £4000 and feel a whole lot more confident, as there will always be extras. The bigger the project, the more those “extras” will accrue. (Tip: with bigger projects, make sure you have a written
contract with everything you’re going to supply written down plus stating that work outside this will be charged for).

When you move onto bigger, more valuable projects, realistically quoting for your services to a new client is easier because of your confidence in the value of what you offer. This will more than likely transmit to the client so they too feel that they’re getting good value.

If you'd like more of Gerry's insights contact us at: info@gencia.co.uk and we'll put you in touch.