Part 4
If you don’t package your services, you probably leave money on the table.
One of the biggest challenges in selling services is that what you offer is intangible. Thus, the most common way people charge for services is to charge by the hour. The client pays for your time, and they keep paying until the project is complete or your work with them is done. But there are 2 inherent problems with this:
First, clients are often resistant to pay for hours. You will hear them say, “I don’t want to leave it open-ended” or “That seems very high for an hourly rate“. We hear these excuses on a daily basis.
Second, there are only 24 hours in a day. Eventually your income will reach a ceiling because you won’t be able to increase your number of hours and/or increase your hourly rate indefinitely.
A strategy to overcome this time for money trap is to package your services.
This simply means that you group a number of tasks or services that you regularly perform into a service package and sell it at a fixed price. This help to make your service looks more like a product and make it more tangible because you can now better explain the benefits and results a client will get from it.
Even though you perform exactly the same services as when you do it on an hourly basis, by grouping some complementary services together into a service package and offering it at a fixed rate, you can focus the client’s attention on the outcomes and results of working with you and not on the time it takes to perform the tasks.
For example: Let’s say you are a social media specialist, and you work with clients on an hourly basis to set-up and maintain their social media profiles. When you package your services, you can for example create 3 different packages at different levels and price points.
The lowest priced packages can include some basic level tasks such as setting up a specific social media profile, but the client still have to do the bulk of his social media activities himself.
The mid-tier program can include all the tasks to set up different profiles, integrate them with his website and create a unified brand for your client across all his profiles.
The top tier packages can be a ‘done-for-you’ and include all the tasks from the other packages plus you take care of his total social media strategy and updates.
Each of these packages thus caters to a different segment of your market. It gives prospects a choice that suites their budget and individual needs better.
Packaging your services therefore:
- Makes it easier for clients to say yes and work with you.
- Removes the element of uncertainty (which is inevitably present when you charge by the hour)
- Gives you the potential to raise your rates and increase your income as you can charge more for packages than for hourly services and clients will still be happy to pay because they focus on the outcome and results they will get from it.
Service packages put the money back into your pocket. A well-structured package can elevate your income and is a great strategy to take your business from merely surviving to thriving. It is also a fun step in business because you can start discovering the untapped potential and profits in your business.
To Your Success
P.S. Your assignment for this week: Think about the services can you group together in your business. Then create a services package around it.
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