value based pricing

Is It Fair To Charge Different Clients Different Rates?

Leaving aside the whole issue of whether or nor the billable hour is the best way to charge clients, do you think it is fair to charge different client different rates for the same work?

This article by Jordan Rothman on abovethelaw.com would suggest the answer to that question is – ‘yes’.

And I actually don’t disagree with Jordan’s outcome, but do disagree with his thinking of why.

After all, at least here in Australia, we very rarely have the same panel rate for all legal panels we are appointed to so; despite, or rather, the fact that we will be doing similar work under the various panel appointments.

QED – IMO – it’s fair to charge different clients different rates for the same work we do (and, HINT, it all comes out in the wash when you look at the Average Realised Rate – but I will leave that for another post).

But, and here is the critical difference I have with Jordan’s post, different clients will equate a different value to the work being done by you – and so it is more than fair to charge one client more or less than another client perceived on the value of the service they are getting.

For example, and I accept this is somewhat crude, somebody who has never been divorced before and whom your firm ‘looks after’ in a very emotional period of their life is way more likely to value the service your firm provides than someone going through their fifth divorce – so charge them more!

If you want to have a chat about how you can maximise your value opportunities, feel free to reach out.

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Microsoft: An example of how not to communicate price increases due to ‘changing market conditions’

“As of April 03, 2023, the subscription fee for Microsoft 365 Family will change from AUD 129 to AUD 139 to address changing market conditions.” 

Microsoft email notification 19 March 2023

Okay, not a huge increase. But:

  • absolutely no explanation or detail as to what those “changing market conditions” are.
  • no explanation about the additional value being provided.
  • no detail about any additional costs being incurred.
  • no information provided around whether the scope of services provided will change.

Other than to say: “if you don’t like this increase, here is a link to unsubscribe”, absolutely nothing.

My take:

  • a really badly drafted email to loyal subscribers (I think my family have subscribed to Microsoft 365 Family for around 10 years).
  • a missed opportunity to set out all the great features that Microsoft 365 Family provides – and there really are a lot -and why paying AUD 10 per year more will be worth it at the end of the day (after all, this is less than AUD 1 per month).

TIP

If, like me, you got this email can I suggest you file this away as an example of how NOT to communicate a price increase to your clients/customers.

And if you need help talking through how you might be able to do a much better job than Microsoft have in communicating price increases to your loyal clients, feel free to reach out:

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Photo credit: Ross Findon on Unsplash