If you do not know the change rate of overhead and supply costs, you cannot set fees in a reasonable manner. – Dr Tom Cat
How To Raise Your Fees
There is a delicate balance between the fee you need to charge for your products and services, and the fee that people are willing to pay for them. But with gasoline, heating, shipping, health care, and other costs rising, there comes a time when you must raise your rates in order to remain profitable.
Most people see their own costs going up, and won’t be surprised that you’re raising your fees, too. With proper communication about it, you should be able to raise your fees effortlessly. Here are some tips on how to go about it:
- Don’t let fear and limiting beliefs stop you from raising your If you hear yourself making excuses that you don’t know are true, it’s probably your fears and limiting beliefs raising their ugly head. Some of these include, “All my clients will leave if I raise my rates,” or “I’m not worth the new rate.”
- Have a clear idea of where your break-even point is, profit No matter how tempting, you cannot make a loss on a sale. In fact, it’s not just about what you “need” to make, it should be about what you “want” to make, too.
- Base your fees on what the benefits and results of using your product or service are worth to your For example, as a practice consultant and coach, I help practices make more revenue and profit in their business. This has a value to a veterinary practice owner, and my fees are based on that value. If you can solve their problems, and if the problem is important enough to solve, then they’ll pay you an appropriate fee for that solution.
- Base your fees for services on your level of If your expertise level is high, you’ll be able to charge higher fees than someone just starting out.
- Check your Are there people out there, with your same skill level, charging more than you do?
- See if a specific product or service is a “commodity.” A commodity is a product or service that is the same, regardless of who is offering it (often called quotable, since new clients price shop). If you’re selling relief from heart worms, it’s the same one that your competitors are In commodity pricing, there’s not much room for differentiation, and clients will be looking for the lowest price. However, if your product or service is unique, or your skill set and experience are different and better than your competitors, then you can charge more. You’d pay more for Oprah to teach you how to create your own TV show empire than someone you’ve never heard of. Bargain basement prices often scare off potential A or B clients, especially if they’re buying a unique product or service. Use commodity (quotable) pricing wisely and sparingly.
- Decide in advance whether you’ll raise fees across the board, or only 25% each quarter. Even if you only raise non-quotable fees, there may come a time when existing clients will note the changes; when yours increase, the staff must be well informed of the WHAT and
- Do the 80/20 evaluation. Find the 20% of your clients that bring you the least profit and either raise their rates or get rid of This may sound harsh, but you’re in business to make a profit and you can’t “carry” an unprofitable client because you like them. I have a practice California that actually provides a map to the local vaccine clinic for D and C clients; she has a waiting list for clients who want to A or B clients (coming in quarterly).
- If you will be raising your quotable fees with existing clients, it’s a good idea to call them, write an email, or explore the changes in your monthly blog, explaining that the fees will be going up to the new rate, and giving them a date when this will I recommend giving them at least a two month notice. Will you lose some clients who aren’t willing to pay the higher rate? Yes. But if you do, then you need to ask yourself, “Why hasn’t this client found value in what I’m offering so that the new rate was still acceptable to them?”
80/20 Getting Plenty?
If you’re a budding internet entrepreneur, it’s time you really understood the 80/20 rule.
The 80/20 rule has been around for decades. I use a 70/30 rule when I normally think of it in relation to veterinary practice. For example:
� 30% of a practice’s products produce 70% of the sales,
� 30% of the sales team over-perform, 70% don’t,
� 30% of the client base place 70% of the orders
� 30% of the clients will do everything I ask of them, 70% will self-compromise and so it goes on.
* Agree to Disagree
In the world of the internet entrepreneur, I maintain that the 70/30 rule must be cherished.
“Nonsense!”, you say, “Doing business on the internet is a numbers game. Volume is everything. It doesn’t matter how clever you are with targeting, it all begins and ends with getting traffic to your practice. And lots of it. The more the merrier. It’s unreasonable to expect 30 clients out of each 100 visitors to my website, therefore the 70/30 rule can’t possibly apply!”
Hmm, let’s just take a step back and think about it for a moment.
* Promoting and Marketing Parade
You’ve set up your web site. Fine. You’ve got a really comprehensive marketing and promotion plan you’d like to implement. This might involve any of the following online components:
- Search Engine submission
- Directory listings
- Classified advertising
- Use of Newsgroups
- Press Releases
- Ezine articles
- Site Newsletter
- E-mail/blog campaigns
- Viral marketing
- Own Affiliate program
- Join Affiliate programs
- Web ring
- Site Award submissions
- Gateway pages
- FFA links
- Reciprocal links
- Free services
- E-mail signature file
- Bulletin Boards
- Special offer promotion
- Joint Venture
- Auction feature
A – B – C – D – F Clients
In my initial texts, Building the Successful Veterinary Practice: (three Volume Series published by Blackwell/Wiley & Sons), I explored the types of clients most practices have . . . I used 5 categories:
A – about 30% of the practice’s clients – they come multiple times a year and do everything the provider(s) say is needed.
B – about 20% of the practice’s clients – they come multiple times a year and do most everything the provider(s) say is needed.
C – about 30% of the practice’s clients – they come once a year (old style practice paradigm) and do vaccines and most parasite prevention.
D – about 20% of the practice’s clients – they come in for rabies vaccination due to city regulations.
F – non-pet owners (about 30-40% of the catchment area population), but they may enter at any of the above levels when life styles allow a family companion.
NOTE: Recent surveys show us that B clients really want to be A clients, and C clients really want a good reason to see the veterinarian more often (becoming A or B clients, depending on what/why the practice shares the expectations and benefits for family and pet).
After reading that list, I hope you’re saying WOW! So much to do and so little time to do it in. There is no way you can hope to implement that dynamic, unless you’re looking for your site to go live in about 9 months time!
But, there is an answer.
* The 70/30 Rule to the Rescue
Here’s the 70/30 rule expressed especially for you, the internet entrepreneur.
** Spend 70% of your time on 30% of your possibilities **.
Let me show you what I mean, and see if we can agree to agree on this one.
This is how you apply the rule to your site’s marketing and promotion plan:
- Of the 25 options listed, estimate which 5 will bring the highest volume of RELEVANT traffic to your website
- Of the 5 selected, decide which one will bring the most traffic
- Implement that item NOW, if not sooner!
- Of the 4 remaining, calculate which one will bring the next highest traffic volume
- Implement that item NOW, if not sooner!
And so on – you get the theme. Carry on until you have completed the 5 you selected.
Hey, that was easy, wasn’t it?
Did you notice the subtle use of the 80/20 rule all the way through? I’m sure you did the math.
We took 20% of the marketing and promotion list – that’s 5 items. Then we took 20% off the 5-item list. What we are doing here is getting the list, any list, down to one priority item. Once we get that, we go to work on it.
And that’s the essence of the 80/20 or 70/30 rule. Yes, you can use it the normal way to describe past performance. But as you’ve seen, you can also apply the 70/30 rule to any jobs, tasks or functions you wish to perform.
* Test of time
You know how much of a time-stealer the internet can be. It doesn’t matter whether you are browsing, designing or marketing your site, the internet has no respect for your valuable time. Which is why YOU must have a plan! Most staff members are better versed at social media than the baby boomer or Gen-X practice owner. Recruit two staff members to be your social media team, and allocate adequate time for them to develop the plan and maintain the sites for the practice.
Don’t be too proud to use the 80/20 rule when sharing expectations for your social media team. You will focus more of your precious time on your priority activities, and work much more quickly to the internet success you are seeking.
The 80/20 rule has stood the test of time in every industry, for every profession covering every job function. Use the 70/30 rule wisely in your practice’s internet entrepreneurial activity, and you will be well rewarded.