Hello. After speaking with a PC I am thinking of readjusting my rate. She said that my rate was high compared to the 2 other people she was working with. I asked her how my rate compared to the other people and she told me what they charge which is a reasonable fee. My rate was almost twice what the other people are charging. One local VA is charging less than I am and she has 30 years experience. I do not have web design skills or specialized graphic art design etc. I am starting out as a generalist. What do you think? I could live with charging less for now and get more training and then charge more. Please advise. Thanks.

Are you marketing only to locals or elsewhere too?

Currently only to locals. My website is not complete yet.

Hi Linda,

I'm new to all this but I would try and verify the rates of the others the PC mentioned, and maybe find out how they came up with their prices.

If your prices are based on the formula I've heard lots of others talk about, then it should represent the figure it would take to run and profit from your business. If so, I would stick to it especially if you feel that your work quality is high....

Just my 0.5 cents

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Lisa Duffy
www.24HourVP.com

Hi Linda -

I have a few thoughts on this.

First thing I don't want you to do is to sell yourself short in any way, shape, or form. Unfortunately PC's will sometimes lie as part of a negotiation tactic, or they could be planning to work with people who don't have the level of skills that you do or they may not be clear on what you do bring to the table.

Here is the thing. Rather than change your prices for now - Justify your prices. Learn to handle some objections - all the while addressing their "why" and what is in it for them.

First and foremost - and I keep saying this lately all over the forum - you have to understand their pain points and then address those. People buy on emotion - so ask the right questions. Please stick with me - I will get back to your question.

Questions might be - "Ms. Green - Tell me - if you could have the business of your dreams a year from now, what would that look like?" And be quiet and let them talk and really listen for what they say is keeping them up at night or driving them crazy. However, if all they tell you are all the positive things, then you'll have to ask a second question to get to the pain points, so that might be..."Ok, Ms. Green - so to have that dream business you just described what bad things would need to go away. What things just drive you crazy?"...or something like that.

Now let's say that one of the things you uncovered was that it is driving them crazy trying to keep up with all that client follow-up. Gotta do this and gotta do that. So then you say - "Ok Ms. Green - I can solve that for you by doing ...this, that, and whatever else you show them... and in that process it will save you "x" time and increase your bottom line by _____%. My fee is ____ - so you gain _______. Now can the others do all that for you and partner with you and show you more ways to save and make money in your business - or will they just be someone you have delegate to all the time and watch over?

Let me know your thoughts on all that. The last thing I always leave people with - and every other seasoned person out here will tell you the same thing. If ALL they are looking at is price - then they are not someone you should want to look at working with. They will be nothing but trouble in the end. They should care about value first.

I do hope this helps somewhat. I tend to always get long winded, but I get excited about this stuff. All my best in whatever you decide!

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Pam Blackman - On My Wings International
Integrated Virtual Business Management Solutions | Mentoring | Coaching

I would not adjust my rates if you have justified them in accordance with your service. You are always going to find others who are both lower and higher. Take Pam's advice and sell your expertise and give them all the solutions that they need. If the bottom line is pricing then I would walk away. Trust me and other seasoned VA's on this one, we have been there.

What makes me wonder about this situation is working with 2 others (at lower costs) then why is she shopping around for more help. This is what you need to find out and address those concerns based on how you can help.

Now with that said, when I started there were a handful of VA's emerging and the industry was just starting to take off. Now there are many, many more and some are cut rate while others are not. You need to learn how to differentiate yourself and justify your rates based on your business and not others.

I had a client that I parted with because she wanted to add more services but was not willing to pay the rates for it. I explained to her that I could no longer help her and would help her find someone else if need be. After 6 months she called me back and asked if I had any room for her as her current situation was not panning out. Some clients just need to see the value first hand to appreciate it.

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Lee Drozak
My Office Assistant

Response to lee drozak.
Thanks for the message. I wanted to know how I can compete with someone who has 30 years experience and is charging Xx less per hour. I am starting as a general administrator. I don't have a speciality in web design social media as of yet. I probably could charge less per hour. What I am saying is for example if there are 10 pizza stores in an area and they charge about the same as each other and then another guy opens a store and he charges almost twice as much how many customers do you think will order from him?

It depends on what the pizza shop has to offer. I would pay extra (or drive farther) for a great pizza. However we are not talking pizza here and without knowing the rates and details that you are competing against it is hard to give you more solid advice.

I guess the bigger question at this point is since you are working the local market, what can that support. Meaning east coast areas certainly have a lower cost of living then west coast so those of us on the east coast can be a little more flexible. You need to consider tax payments first and foremost, and then the cost of doing business. After that, can you afford what your lower rate would be.

I guess what I am saying is you need to reexamine your current rate structure based on (1) what you can afford to charge, (2) current competition and (3) expertise that you bring to the table. I have 30+ years of business experience with specialties in accounting and training from being in the workforce however it has been forever that I have done full blown accounting. So even though I have the experience it does not make me the expert. Tax laws change all the time and goodness knows there are a lot of them. I keep up because I like to stay informed but other than basic bookkeeping I am out of the loop. I can honestly say though that I have 30+ years of accounting experience, but that does not make me comparable to someone who has 10 years of recent experience.

Bottom line is if you rates are justified then stick to your guns. If your rates are out of line with your area and competition then you need to reexamine them.

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Lee Drozak
My Office Assistant

Dear Linda, I just started my VBM/VA business a few months ago and pricing my services has not been easy, either. I was told by fellow VAs different things: some said I needed to insist on my rates while some said I needed to cut them in order to build clientele. And I have PCs tell me the same - for some, my rates are entirely acceptable and reasonable, and there were those who say they were way too high...
One of my clients said to me that at first she though my rate was a bit steep but the work I have done (and piece of mind she was given) was priceless. And to show my appreciation, I'll do some small things for this client free of charge, or go out of my way to answer a question every once in a while...
But take Pam's and Lee's advices and master the "art of justification" with clear examples.

Also, like Lee said: it doesn't matter how long have you been in the industry as long as you keep up-to-date with all the changes relevant to your services, your services are high-quality, you have what clients need and you learn how to position (and sell) yourself. At the end of the day, you are the business owner and you need how much you need to bring in... If you have some wiggling room, then yes, try with lower rates and see what happens... When you get busier, you'll be able to be more selective of the work you want to take on and you'll be able to up the prices, too. Or, you reconsider who your target market is, increase your market area and find clients who will see your worth and respect it...

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Sara
Your Reliable Help Just a Click Away

I would not lower my rates based on one person's feedback. You need to set your rates and then be able to tell a client why you are the best! If you are trying to compete solely as the cheapest VA, remember you will be competing with VAs around the world.

Because I live on the East Coast, cost of living in my area is higher than other parts. I have to set my rates and be comfortable with them. My ideal client is not a "price shopper".

Learning to overcome a prospect's objections (price, location, etc.. ) are an important part of selling your services. Chances are, if you lower your rates, there will still be someone who thinks they are too high. Ironically, once you find your ideal client, they will tell you that you are too cheap and irreplaceable! That is an ideal client!

just my two cents!

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Cathryn Jones
Assistants For Agents, LLC