How to raise your fee and get buy-in from your customers

Karl Palachuk

Okay. You're ready. You have your awesome three-tiered plan. You have a newly minted Managed Service Agreement (MSA). You have client financial data. You know about requirements to signing, customer service issues and technical status. 

Your head is filled with practice speeches. Stop it. 

You know these people. You've worked with them. You have a good relationship. 

This ain't nothin' but a thing. 

And what's going on in the client's head? Think about it. Their assumption is that you're about to drop an important announcement on them. You're quitting business. You're raising your rates. You're dropping them as a client. 

Whatever the case, they are curious. Especially since you insisted on a face-to-face meeting and set a time, etc. It's a bit more formal than your regular relationship. 

So the good news is: Clients know you're meeting to raise rates. They are prepared for that. Don't be afraid of that. It's an unspoken agreement before you show up. 

Walk in. Show up early. Get comfortable. Say hello. Exchange some pleasantries. So what can I do for you today? And here's your pitch. 

"We're moving to a new system. Our company is investing in products that allow us to provide a much higher level of support at a great price. 

"We're moving to a system with three different options, depending on what your needs are. 

"I'll start with the Silver Plan because it covers the fewest things. Everything else builds from that." 

Discuss Silver. Move up to Gold. And for just a bit more, move up to Platinum. 

"We think Platinum is your best bet because it gives you total coverage. We'll be managing everything. 

"Over the past year, you spent about … That's right in line with (plan) …" 

Now stop. 

Insert silence. 

Don't talk. Don't fear the silence. 

Answer all their questions. (Take notes for your next meeting. You might even compile an FAQ.) 

Ask for the Sale 

Whatever you do, don't leave it hanging. 

"I'd like to sign you up for (Platinum). We can get started today." 

Setup fees 

There are setup fees. Here's the lowdown: You should charge a setup fee. There's value to what you're doing. And you are paying for the RMM tool. Plus you pay for your PSA tool. And maybe a spam filter. And an antivirus system. You have overheads. It costs money to do what you're going to do. 

Even if you haven't bought the tools yet, you'll have the expense of setting up server and desktop monitoring by other means. 

At the same time, the setup fee can be flexible. Some people won't make a deal until you give back something. Anything. They pride themselves on always getting a deal. 

For argument's sake, I'll assume your setup fee is 50% of the monthly fee – could be 100%. 

You can waive this for any reason that pops into your head. Or you can round it down. Or use it to provide complete services until the end of the current month. 

If it's early in the month, or mid-month, and it's an average client, by all means collect that setup fee. 

If a client has been a pain in the neck, refused to sign, then changed their mind: charge them the full setup fee – no questions asked. 

If they sign on the third day of the month, charge the Managed Service Agreement (MSA) for a full month but waive the setup fee. 

You get the picture. 

One more thing 

There's just one more thing to tell the client: In the new system, all of these plans are pre-paid. So we can put this on a credit card each month, or you can prepay for three months in advance by check or ACH. The choice is yours. 

Don't argue with me on this. Cashflow is the biggest killer for businesses, read this blog if you’re in any doubt about what to do. Also see the cable bill, phone bill, copy machine bill, rent, electrical, insurance, alarm company, etc. We live in a world where that's how it's done. You're just catching up with the 21st Century. Welcome aboard. 

Finish the meeting 

Okay. So at the end of the meeting you should have a signed agreement. Sign two copies, one for each of you. Calculate the setup fees and monthly fees. Don't forget the credit card authorization if they're paying by credit card – ACH form if they’re paying by ACH. If they're paying by check then collect a check for three months. 

Thank them profusely. Assure them that they will be very happy and that you're going to take care of them better than they ever imagined. Because that's true. 

If, for whatever reason, you leave without a signed agreement, set a date certain when you will find out what they plan to do. Make it soon – no more than two weeks. 

They have to make a decision. If you find yourself calling and writing and not getting a response, then you'll have to write a goodbye letter. Be professional and respectful. Invite them back when they decide they need professional technical assistance. "No Decision" is not an option. 

(Used with permission of Karl W. Palachuk, SmallBizThoughts.com)