If you are closing the majority of the estimates you submit, perhaps you are not charging enough and are leaving money on the table.
A good gauge to determine if you are charging enough is if 20-40% of the estimates you submit don’t get accepted because your price is too high. This likely means that the 80-60% of those estimates that do get accepted will more than cover the loss of the those that didn’t.
Let’s say as an example you are successful in closing 100% of 100 estimates at $500 each, that’s $50,000. That’s not too bad.
But, if you raise your rates to $1,000 and only close 60% of those negotiations you’d be earning $60,000.
Yes, you’ve lost some clients but you didn’t lose any income. In fact, you increased your income a little bit at the same time as you reduced your workload.
Even if you have a 50% drop in your work as a result of doubling your rates you’d still be making the same amount of money but working less.
With this extra time you’d be able to really work the 80/20 rule of thumb for business. You’d be able to focus on and cultivate the top 20% of your client base that results in 80% of your productivity and revenue.
Increasing your productivity by just a few percentage points or bringing in more customers to raise that top client base from 20 to 30% can have a huge impact.
Or, with that extra time gained by culling the less productive clients from your customer base you may be able to increase both the production from your top clients and the number of quality clients for even bigger results.
Feeling like you need to accept every job at whatever low-ball price you are being asked to accept is a recipe for burn out that can impact the quality of work you do. Compromising your work in this way will only chase off that top 20% of your client base who are really the ones responsible for helping you to keep the lights on.
Take some time to review your pricing and your close rate to determine if adjusting your pricing will help you to work smarter, not harder.
Another alternative to working harder is to increase your sales by becoming a better negotiator. Sharpening your negotiating skills takes less time than cultivating more clients and the results are immediate.
Learn More. Other Blogs on the Art of Negotiation:
- Negotiating in Tough Times
- 10 Ways to Fight for your Digital Rights
- Defending your Price
- 5 Reasons Photographers Should Sell Value, Not Price
- Buyouts VS Rights Packages
- Negotiation – Asking the Right Questions
- Negotiation – Image Uniqueness
- Negotiation – Believing in What You Ask For
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