Rates and Billing

Discuss setting rates and find billing resources and information.

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Old 06-23-2012
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Default Value Based Pricing
Hello, all!

It's official: after days of joining the site, I've made about 50+ posts.... so it can now be officially assumed that I'm a VA forum junkie.

Now that we've gotten THAT out of the way, I stumbled across something that caught my attention a bit: value-based pricing. This is basically when you charge your clients based on the services that you offer, instead of clocking in/clocking out your hours. I was reading Danielle Keister's blogs and I ran across this concept. (here's the link where she shares the concept of value-based pricing briefly)>>> http://administrativeconsultantsassoc.com/pricing (there's also a free pricing calculator available as well). Danielle actually did a survey on VAs (or as she like to call it, administrative consultant), and she said that most of whom she surveyed only makes about a $10,000 yearly profit. That's not cool in my book, nope, not cool at all.

Has anyone (or does anyone) follow this concept on value-based pricing? I must admit, this concept really grabbed my attention, because (1) clocking in/out and tracking my time makes me feel like I'm am employee when I'm actually an independent contractor, (2) it's a little time consuming, and (3) see number 1. I mean I understand the concept, I really do. You track your hours to let your clients know that you're doing what you're supposed to do. But ask yourself, how many people go to a hairdresser and they clock in and clock out when they shampoo your hair, when they use the bathroom, when they answer the phone, etc? Doesn't make sense, huh?

This is definitely be something I'll be researching as I'm doing my business plan/client agreements.
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Old 06-23-2012
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Default Re: Value Based Pricing
Hi Nadia,

I addressed the concept of packaging services (or value-based as you mention) in this thread. Should I be advertising my rates?

Bundled rates are certainly feasible and favored by clients and VAs however, not all services in my opinion can be packaged. In some cases a VA can offer packaged rates and then charge hourly for any services not covered under the package.

If you review the Rates and Billing category here at VAF, there are a number of threads discussing how to bundle services.

Janine
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Old 06-23-2012
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Default Re: Value Based Pricing
Originally Posted by Your Virtual Wizard View Post
Hi Nadia,

I addressed the concept of packaging services (or value-based as you mention) in this thread. Should I be advertising my rates?

Bundled rates are certainly feasible and favored by clients and VAs however, not all services in my opinion can be packaged. In some cases a VA can offer packaged rates and then charge hourly for any services not covered under the package.

If you review the Rates and Billing category here at VAF, there are a number of threads discussing how to bundle services.

Janine
Hey Janine!

Thanks for the heads up. I searched in the forum right after posting this question; but I searched for the word "value." Thanks. Now I know what I'm looking for.
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Old 07-02-2012
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Default Re: Value Based Pricing
I just took Danielle's webinar on how to do this. It was in two parts, and I couldn't attend the second part, so now I'm waiting for the replay. I can't wait to hear what was said, because during the first session she said most of the info was in the second session.
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Old 07-02-2012
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Default Re: Value Based Pricing
Hello,
Yes I am a fan of Value Based Pricing. Danielle actually just held a 2 day seminar last week on the full concept and was very informative. We have got to stop selling hours because you are short changing yourselves. Even if you can't bundle all your services she explains how you can charge those services seperately. I encourage everyone to take a look at her concept.
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Old 07-04-2012
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Default Re: Value Based Pricing
To make it simple for my clients I generally only package services for business set-up (corporations, etc) and initial website design. All other services I charge hourly.

This makes it easy to understand for the client and I don't accidentally under budget my time.

This is just my preferred business model. It is ultimately the decision of each individual VA. You need to do what works best for your business.

Julie
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Old 07-06-2012
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Default Re: Value Based Pricing
This makes total sense. I'm struggling with it right now. I work through Elance and have clients that I bill by the hour. The problem is, sometimes things come up that I don't bill them for. I get an email and think of a solution for 30 minutes. They love it, it changes the way the do business, I feel like a superstar...but it was free. I actually had to fire a client because i took him on as an hourly marketing assistant client but he really needed strategy. Because I'd already accepted an hourly rate to "produce results" he didn't see the value in paying for my expertise. ;( Next question is how to move to a bundled model. I'm gonna check out the resources you've all listed for more info!

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Old 10-31-2012
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Default Re: Value Based Pricing
I am basing mine on Danielle's value-based concept (although never saw her videos). I am currently revamping my rate strategy that I refer to as service-based. I am setting up a schedule to use as my personal rule of thumb whereby I attach a value to a service (this is where I am kinda spending LOT of time/energy - listing various services and assigning a number) and then multiplier will be dependent on how many times/how often client wants that service performed -- determining the price that I quote.

Then I will take into consideration the payment -- i.e. monthly/quarterly/semi-annual/annual... biggest break being annual payment up front.

This rate structure really makes sense to me -- the client and I should focus on what he wants done, and getting it done within the agreed upon parameters. PERIOD. Not how long it took me to get it done -- it boils down to the final product.

btw -- My exceptions still are not an hourly rate:

Transcription is still charged by the audio minute.
Straight typing would be per page (based on double-spaced page with 1-inch margins.
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Old 11-01-2012
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Default Re: Value Based Pricing
I have an assortment with my pricing structure, I have an hourly rate that varies depending on what I'm doing, I also do specific tasks for example a Facebook cover or a website and they have prices per task.

I use Freshbooks to track my time, as it logs it ready to invoice, making my life just a little easier.
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Old 11-02-2012
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Default Re: Value Based Pricing
This is the pricing model I generally work under anyway simply because that is mainly how things are done where I am from and because it is more effective. Typically, I use two models for all my clients, (1) monthly retainer (2) value based. I only use an hourly fee for verbal translation work, ie when I translate at the police station or at court (including travel time) and that is only because I never know how long it is going to take.

It can take some trial and error as you may undercharge a couple of times on tasks you may not be all that familiar with but you can soon turn that around and I find it a lot easier to deal with clients and it avoids wasting a lot of precious time using time management software etc. I don't like that method at all as I didn't set up my business to have to justify myself to clients all the time about what I am doing every minute of the day. They get the results they want in a timely manner and that's what is important.
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