Are You a Corvette or a Corolla? A Lesson in Setting Your Rate

A common dilemma that many who are starting out on their entrepreneurial journey as a virtual assistant face is: What should I charge for my rate? They look at their competitors and set their price on the lower end of the price range that they observed .. or worse, compare to those rates on bid-to-hire sites, which are notoriously low. The reasoning behind this seems to make sense, they want to compete and they don’t want the price tag to be the reason they didn’t get that customer.

So let me be clear: This is NOT a good strategy. Period.

Before you start telling me that I’m crazy, let me explain why I’m advising against this.

Anybody Can Be Cheap

No matter how low you set your price, understand that there will always be someone cheaper. Always. If you set your price low, your competitor who is well established and can afford it, can set their price lower than what you can afford. They often don’t mind losing a little bit of money in the short run when they know they can knock out a competitor and bring in more money in the long run.

Don’t try to win with low prices, offer something better than what they have. That’s how you are going to be successful.

Quality Is What People Want To Pay For

People are willing to pay a bit more for better quality goods and services. Being completely up front and honest with your customers about this is key. It’s okay to tell them that you offer a better quality service, experience or product than the competitors and that’s the reason behind your pricing. Assure them that they won’t find better quality anywhere else .. and prove it!

How many times have do you think people haggle over price with their attorney? Their accountant? The electrician? That’s right, they don’t. Why? Because they are professionals in their trade .. just like you and your virtual assistant practice. Their rate is their rate, just like your rate is your rate.

Clients and potential clients will see the confidence in your service price and pay it because you are offering a professional service at a professional rate. Then word will spread, referrals come your way and so on. Business will boom and you won’t have to be struggling under the burden of low rates and not enough time to handle the workload of 20 clients, instead of 4-5, to make a good income.

You Can Make More Money With One Sale Than With Ten

Many people choose to avoid the “price wars” altogether and focus on lower volume and higher profit margins. An example of this is a high end, luxury ski lodge that is owned by Rob Alday. He says, “Our rentals are not for everyone, and I’m alright with that. This just means that we’re better able to focus on our core audience and this makes our marketing efforts easier and keeps our customer service requirements at a minimum.”

This approach can work for many entrepreneurs. Do you offer services that go above and beyond? Do you provide a value added service? Is your expertise something that wouldn’t be appreciated by most but rather by a specific group of professionals? Then don’t be afraid to charge the price you deserve. If you’re going to give them your all and especially if your specialty is a rare one, set the price that will benefit your practice the most. If someone wants the best, they won’t mind the price.

If you ever find yourself wondering how much to charge for your goods or services, keep these things in mind. You’ll be surprised at how much less stress there is when you aren’t worried about competing with a price tag.

You’re Worth It!

Just like L’Oreal’s advertising campaign, you are worth it! Stick to your rate, don’t haggle. If a potential client is trying to talk you lower, then they aren’t going to pass the “is awesome to work with test” and they are more concerned about your rate, than the experience and professionalism you bring to the table. You don’t need a client like that.

About Out of the Office Virtual Assistance:

logo1bSince 2006, Out of the Office has offered ideas and ways to increase your productivity, decrease your workload, and work more efficiently. We nurture a successful business relationship, while continuing to grow as your business partner. We are focused on streamlining your administration, social media planning and execution, content writing and offering creative solutions for your business success.

Image credit: Hey .. that’s my car!

One thought on “Are You a Corvette or a Corolla? A Lesson in Setting Your Rate

  1. Pingback: 5 Things About Working with a Virtual Assistant | Out of the Office