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How To Handle Potential Client Conflicts Regarding Pricing In Your Virtual Assistant Business

Michelle Dale - Wednesday, March 30, 2011

I had an email this week from a VA who was feeling really low about a client who had come on her live chat facility to take the time out of his day to tell her that her rates were too high. After I read the context, and the full conversation between the VA and the chat person, the first thing I said was, “He is an idiot, brush it off.” (and I don’t use the word idiot very often, especially when I don’t know the person personally) and the second thing I said was that I would do a post on the blog this week about how to handle that issue, along with a couple of others, and here it is.

I have "officially" been a Virtual Assistant now since November 2007, and during this time I went through a steep learning curve with clients regarding rates and charges. Now, in 2011, I have a thriving, profitable VA practice, I charge the rate which is ideal for my business, and I have a consistent flow of enquiries, potential business and new clients. I would like to share with you how I dealt with certain conflicts over the years to get to this point. Everything which is in this post is based on my personal experience.

First off, I am always transparent with my rates. I went through an experimental phase where I took my rates down off my site, and I discovered in comparison, it was much better for my own business to display my rates. This doesn’t work for all business models, but to be honest, I got a bit fed up of dealing with people who could not afford to work with me from the offset, my time could have been better spent elsewhere.

I currently charge:

  • Admin Rate – $40 p.h. All Traditional VA Services, Customer Support & Social Media
  • Technical Rate – $57 p.h. All Creative Design & Web Development, Content & SEO Services
  • Consulting Rate – $160 p.h. All advisory services such as setting up systems and processes for clients, managing workloads, planning, project management and implementation of all administrative operations. In general, this is considered as online business consulting.

A majority of my services are now in “packages” so I don’t have to track hours for those in the same way, but if clients would like to budget with retainer hours, and if I would particularly like to work with them, I will generally accommodate them. Thanks to the magic of online applications and software I have some excellent systems in place in my business for billing and tracking hours which allows me to input hours quickly and easily for invoicing purposes.

Whenever I have a conflict or common problem amongst potential clients or clients, something where I perhaps have made a mistake with a decision I have made (nobody’s perfect) or I have come across a situation which I don’t want to repeat itself, I write it down, so if it happens again, I can quickly reference back, and remind myself what happened, and how to deal with it. Try this in your own business – it will help to avoid history repeating itself. Here are some things I have come up against before, which you may too, and how you can effectively deal with these situations.

“You are way too expensive, I can get this cheaper elsewhere.”

If you clearly display your rates and package prices, you likely won’t get anyone saying this to you because they will already see what you charge and it won’t come as a shock – I can’t remember the last time anyone told me I was too expensive, maybe I’m not. Technically this may on some occasions be a statement of fact, they may be able to get it cheaper elsewhere, virtual assistants charge different rates, so don’t get too upset with the potential client because they have said this, it’s nothing personal against you. You need to simply say you are sorry you could not be of service on this occasion. There is no need for you to waste any time convincing someone with that mindset to pay your rates, they are not a good fit for your business, but they could be a good fit for someone else’s.

IMPORTANT NOTE: You may feel like explaining this to the next client who is surprised at your rates.

As professionals in our field we charge for the quality of service we provide, generally it works that the higher the level of skill, support, expertise and standard of service that is provided, the higher the rate you will charge, this is perfectly acceptable, because the more you have invested into yourself personally, and into your service, and your company, the more the client will need to invest in YOU in order to acquire your expertise for their own business. It may be worth explaining this to a potential client, or it may not, trust your instincts on this one, it’s for you to decide.

“Can I get a discount or a free trial?”

If someone asks you for a discount, my initial advice would be assess the situation and the context of the request, they could be wanting to do several thousands of dollars of business with you a month, if so, hear them out and “don’t burn your bridges.” But, having said this, generally on the whole you need to avoid a majority of people who ask outright for discounts or money off, there is a warning bell there, that someone doesn’t value your services, however this doesn’t mean to say that you cannot offer a discount to other clients, on your own terms.

I recently had a consultation with a client, we really hit it off and he committed to a monthly package of services which cost several thousands of dollars per month, he never questioned my rates, and he was a very pleasant man, I knew that I was going to enjoy working with him, and it was great business for me. Once he had signed the agreement, I issued an invoice with a 10% discount. I mentioned to him that I very much enjoyed talking with him, and that I am looking forward to a great business relationship with his company and mine. I explained the discount was a token gesture off his first invoice to thank him for his business. Well, the client was delighted and very appreciative of this unexpected gesture, and has this month doubled his work with me, he is very happy, as am I.

I have no issues offering a discount in context, certainly for volume work, and on this occasion, and on other occasions, the gesture was a very good business decision for me. Just make sure these gestures are on your terms. Running promotions or limited offers can be a natural part of any global industry, but generally the promotions or offers are not open ended, they have terms and conditions, you also need to make sure you charge enough under “normal” non-promotional circumstances to warrant providing a discount, but still make a profit on your promotion, and they should be presented to the client as a privilege, when you are feeling generous, or part of a company celebration, monthly newsletter or launch, rather than a standard, ongoing, set-in-stone part of your daily business.

I Love Apple…

Take Apple for instance, I LOVE their products, I have no issues paying full price – But, when I see them offering a discount or sale day, then I am delighted that I can get the same quality product with a little bit of a discount, it’s just a perk, and encourages me to go ahead and make my purchase there and then, without thinking about it too much, it’s an opportunity, an additional incentive, but it certainly doesn’t mean to say I value their product or customer service any less.

Clients Will Love You…

If you are concerned about offering discounts, ask a few of your trusted clients that you have worked with for a while if they would undervalue your service in any way if you offered them an incentive occasionally to purchase more from you – I think you will find the gesture is well received, with gratitude.

“I want to pay after you have done the work.”

My advice is to NEVER begin working with a client without some sort of financial commitment up front – ever. By taking payment up front, it will also help the client to understand that you are an “independent contractor” and generally they get paid up front (or at least half up front depending on the type of work). Some folks, especially entrepreneurs who are just starting out in their business, coming from traditional employment themselves, may not understand the difference yet between independent contractors and employees, but there is of course a “very clear boundary.”

This is not to say that you can’t take payment in arrears, for example, I have clients who I have been working with for several years, at this point we have built up a certain element of trust, and if they ask me to do an additional project for them that week, or add an extra few hours on for something they need doing, then I am generally happy to do it, and charge it on their next invoice, but this is only after I have good reason to trust the client 100%.

In the cases of newer clients, there are several problems with charging in arrears, the first is that you could work for them for a period of time and they don’t pay you. I had a client work with me once for around 6 months, averaging up to $1000 per month, always paid his invoices immediately and he was a very pleasant client to work with, then one month, he literally dropped off the map, that was a couple of years ago, it turned out that a real estate deal he was pinning his hopes on didn’t go through, and he was no longer able to continue working with me, he fell on tough times. You never know what’s happening with clients, or how their personal circumstances could change, almost overnight. The second is that you may use sub-contractors or have team members and that requires a financial commitment from you,  you are obligated to those who work alongside you regardless of your client’s situation, so you should first obtain a financial commitment from the client, it’s vitally important to maintain cash-flow in your business, for both you and your sub-contractors, and finally, it just makes good business sense to never expose yourself to being out of pocket in any way, whatsoever.

Overall, if you are impartial in these situations, you state very clearly what’s acceptable to you and what’s not, and you are the one setting the terms for the relationship, which the client agrees to when they sign your service agreement, then you will find that everything just falls into place. VA’s and clients should have a mutual respect for each other — I firmly stand by treating others how you would like to be treated yourself, and when I do this, it’s more often than not reciprocated. If it’s not, then it’s just a case of letting the potential client know they need to find assistance for their business elsewhere.

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Hi I'm Michelle, an entrepreneur specialising in virtual assistance, a digital and real world nomad, and a down-to-earth mother of three.

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