VA Helper Podcast Episode 003 – Setting and Displaying Your Rates

In our second episode we talked a little bit about setting up your website and some pages you might want to have on there. That brought up some questions about whether or not you should have your service rates displayed on the site for potential clients to find on their own or if you should ask them to submit requests for project quotes.

In this episode we talk about that a little bit with reasons that you might want to display the rates or not display the rates depending on your client market. We also talk about setting your rates in general and what factors might influence that.

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[transcript follows]

Loretta: Hello. Welcome to the VAhelper.com podcast. I’m your host Loretta Oliver and I would like to thank you for listening today.

In our last episode we talked about setting up your website, and pages that you might want to consider having on your services website. That brought up some questions about posting your rates, and the prices that you charge for certain services. So we’re going to talk about that a little bit today, and get a few different opinions on reasons to consider posting your rates on your website for everyone to see, and reasons you might not want to post your rates on your website for everyone to see.

There’s been a bit of a debate in the virtual assistant world, and just for services in general even, about whether or not you should post your rates on your website for everyone to see when they come, that way they don’t have to ask for a quote or contact you to find out how much their project is going to cost them.

Now that all sounds good in theory because nobody wants to answer quote requests all day every day, right? It’s just so much easier to have everything right there; the customer can, sort of, self-serve and figure out from their budget if they’re going to be able to afford your services or not.

That’s also where the problem comes in because they’re not seeing the project the way you would see the project while providing the service, and oftentimes they underestimate the amount of time that it’s going to take to do the project and the amount of work that it really does take to get everything that they need done finished. So they’re thinking that the project is going to be, say, four hours, when in reality that project takes about 10 hours of work to finish.

Those two things are very different price points and the client thinks it’s a very low price, and meanwhile, if its 10 hours of work it’s going to be a lot more than what they expected on their four-hour estimate for the project. So, in this regard, not posting rates and costs on the website is a way for some service providers to avoid that miscommunication and that disconnect with customers, this way each customer submits a request for proposal for their individual project and gets a customized price quote from the virtual assistant.

But I don’t want you to have just my opinion, so I have Alicia and Erica both here today to go over a couple reasons why you might want to post your rates or not post your rates, and some ideas on how you can best do that for your website. Erica what are your thoughts on posting the rates on the website for everyone to see?

Erica: As far as posting your rates on your websites goes, I am a big believer that you should post your rates. If you are hesitant to post them, or you have a lot of different packages that may be offered because each one may be catering to a different kind of person or a different project, I think it’s best that you should put something—“Rates starting at,” like say if you’re working on graphic design or a website, you say, “Okay, rates starting at $2,500 for a whole website,” because I think in this day and age people are very cynical about what they purchase, and they also are very hesitant, especially in this economy, to call people and say, “What are your rates; where do they start?”

Money is a hard thing to talk about and there’s still a great deal of mindset in this country that if you have to ask how much something costs, then you can’t afford it. And you don’t want that to play on you. You may be worth the money, but they don’t want to go into it blind and then find out that their budget is $200 and that you charged a thousand an hour.

Loretta: I really like the idea of doing a setting rates “starting at” on your website instead of specific rates; that kind of gives you that little bit of cushion to adjust so that if somebody comes back to you and has a really complicated project that you just know is going to take forever you can adjust when you tell them how much the project’s going to cost. That’s a great idea. And I agree that the economy and budgets are definitely a huge issue there, too.

Erica: Several years ago I got into an issue with that with a client of mine; I was working with them and my client hired someone to write sales copy for their website. Well, the client had asked him to write five or six pages of copy—it was extensive copy—and the copywriter was going to charge him $250 a page, which is actually very cheap for copy to the extent that he was needing, and they never discussed money because the client was like “Yeah, go ahead, whatever the budget.” He never really said, “This is my budget.”

So, then the copywriter sends me the invoice and I said why am I getting an invoice, this is for my client, and so he says well the client told me to send it to you, and so I sent it on to my client and said “I don’t know how I got in the middle of this, since you hired him, he works for you.”

And, so I sent him the invoice and he opens it up and he goes, “No, no, no. Did you change this?” And I said, “No, of course not. Why would I change it? I just forwarded you the email.” And, so he calls me and said, “No, our budget for copy was like $400,” and he had overspent that by like $1,500. So, I go back to the copywriter and I was like, “I wasn’t there when you were hired; I don’t know what happened.”

I said, “My client was freaking out,” because he has basically spent $2,000 on copy that he wasn’t expecting to spend. The copywriter did not have his rates on his website and I’m not sure exactly what my client thought he was going to be charged, and the copywriter came back and said, “You know, I should’ve double checked. I should’ve verified what the budget was, because I would not have done this much work.” He put in hours and hours and hours writing this copy. He’s like “I could have done much less research,” or something. He’s like, “I could’ve made it work for four hundred bucks, he just wouldn’t have gotten as many words and he probably wouldn’t have gotten as many pages.

And so, in the end, I ended up being able to work something out between the two of them, where the customer paid, like, half of what the original invoice was, which I actually did not think was fair because I think it was the client’s fault for not saying, “This is my budget,” because he—from my understanding—he basically said, “No, just go ahead and do it, whatever it costs.” Well, “whatever it costs” does not mean I can always spend $400.

The copywriter also got a little bit agitated in the end, I think, because it took the client several months to actually pay him, and so the copywriter keeps calling me wanting to know where the money is and I kept telling the copywriter “You don’t work for me. I had nothing to do with this. You have his phone number. I am not the go-between on this.”

And so I tried to mediate as much as I could. It was a difficult situation and so I think if you post on your website and say that your hourly rate starts at $75 an hour that kind of gives you a cushion that you say to the person, you contacted me from such and such page on my website and it clearly states that my lowest hourly rate is here.

Loretta: Wow. That is a really good example of how not having the rates on the website sort of worked against them in a way, because they didn’t have great communication with the client, also. So let’s change focus just a little bit and talk about your rates in general, setting them, putting them on your website, what to tell clients . . . sort of a broad spectrum.

I know this can be one of the harder parts of working as a virtual assistant; you have to know your market and make sure that you set your prices at a price point that will meet the needs of your clients and customers. But, before we dig in too deep here, I need a refill on my coffee, so I’m going to pass the audio over to Alicia for a little while and I’ll be right back.

Alicia: I do see the benefits of having your rates listed on your website and for not having your rates listed on your website. I know you were probably looking for a black and white answer so you know what you should do. But just like many other things about having your own business, you need to do what works best for you, and what you’re most comfortable with.

I can tell you that when I first started my business I did have my rates listed on my website. That’s what I learned, so that’s what I did. I felt that it helped with transparency; clients knew exactly what they were getting, and how they would be charged when visiting my website. However, I have changed this and I no longer list my rates on my site.

Over time, some of the projects that I’ve done for clients have changed. I’m now at the point where different clients have different rates and new clients are charged something else entirely. I have found that it helps me to price per project so that I’m really pricing correctly.

The different rates were due to the type of project, the length of time it would take to do the project, and the time frame the client had for the project. Those were just a couple of things that affect the outcome of the pricing that I charge and why it helps to not have it on my site. I’ve certainly not seen a decrease in business after removing the rates on my website.

So, if you don’t list your rates, what should you put on your website pertaining to your rates? Well, you can add things like frequently asked questions about payment and turnaround time, you can note your business hours and how you accept payment, and you can also note the things that you might charge extra for. This will still give them a place to go to get the answers they might be looking for without you putting out there exactly what you charge for everything right down to the penny.

Loretta: I like that you brought up the point about having different rates for different clients. I have a lot of similar situations, where certain clients get, I don’t want to say “preferential pricing” because it’s not really preferential, it’s just different in that their projects were very different than the other projects that I do. So I changed the rate based on what they needed for the project. Sometimes that means it’s a little higher, sometimes that means it’s a little bit lower.

I’ve also done it both ways on my own websites where I’ve had my rates posted and not posted, and I didn’t see so much that it affected the amount of work I was getting, but it did sometimes affect the quality of work that I was getting, by that I mean clients that were reasonable to work with, and enjoyable to work with even.

But I think a lot of that might have had to do with the actual rate itself when I changed my rates to a higher rate because when I started out, I was charging a really low rate, like $10 an hour, or something like that, for virtual assistant services in general, and then my transcription rates were also really low. And over the past few years I’ve change those a few times to be higher and a little bit more reflective of the market that I want to work with. Erica, what are your thoughts here?

Erica: If you are a VA and you’re charging less than $10 or $12 an hour, I really think you should increase your rates and you need to publish them. If you have someone who works with you consistently, even on a subscription basis, offer them a discount but have that as something that you do for your special clients.

Don’t be taking rock bottom prices on your website and then try to increase it once you get the person contacting you. You can always offer a discount after you get them on the phone, but I’m also a big believer that you should not be relying on discounts, I think that it’s better for you to charge your hourly rate across the board.

Some of you may know that I owned a transcription company for four years and now Loretta, the curator of VA Helper, took over my company for me, because she has a lot more transcription experience than I do even. And, at one point, our rates—we started out very low—I didn’t do my market research correctly, so we were less than, charging less than half what the rest of the market was for transcription. And so, over the course of about 18 months I slowly increased my rates.

Instead of doing two or three big jumps in price, I slowly increased them. And so I had customers, some of them had negotiated a lower rate. I had customers that had come in from the forum or that kind of thing, where I’d done networking stuff where they automatically got like a 20% discount. And then I have my real hourly rate, and I will tell you it was almost maddening, trying to figure out which person got which rate.

So I think the caveats and the cons outweigh the pros, definitely, on having your rates published; at least a base rate. You may have put in an addendum there that says “features” or “extras” may cost more. And I also am very wary of publishing flat rates for packages. If you know that you get a tendency to have projects that get out of control and you are not making as much money as you should be because you’re charging a flat rate rather than an hourly rate, definitely be wary of that as well.

Loretta: That’s a really good point about trying to keep track of the different rates that you’re charging different clients. It can be really difficult and confusing and sometimes it just gets frustrating, depending on how many clients you’re working with.

It’s not so bad when you’re only working with two or three clients but then, later on, you’re working with 12 or 15 clients and it gets a little, a little sloppy, a little messy. I do like the idea there of having a base rate like you said, and maybe even the addendum that says different projects may take on additional rates and maybe even give a few examples of what that might look like for an overall project.

Then, in regard to the actual rates themselves, I do like that you said that if you’ve been doing your virtual assistant work for a while, it might be time to increase your rates. A lot of us do start out at a really low price point and that’s totally okay when you’re just getting started, but after you have a little bit of experience under your belt and you have some testimonials on your website and you’re a little more confident in the work that you’re doing then it’s time to start thinking about raising that rate a little bit for when new clients come in and potential leads visit your website. You don’t want to be undercharging in a market that is typically used to paying higher rates.

Like you said with the transcription example that you gave, Erica, there were clients coming to your website and you were charging half of what they were used to paying, so that can give two impressions; that can be “Okay, well I’m going to get a really good deal, here,” or they might think “Well, this isn’t really the right pricing, so either this is going to be junk or I’m not getting what I think I’m going to get,” and that can be a problem when you’re setting your rates, too.

And I do remember when you had the lower rates over at The Small Business Transcriptionist and I remember looking at your rate sheet and asking you why you were charging such a low rate when I knew you were putting out good transcripts. You were giving away the farm there on that one, and then you raised your rates and I think you also saw the same thing that I mentioned earlier, with a better quality of client you get—when you raise your rates and you have that higher perceived value, it just all comes together and works out really well and things just kind of grow from there.

I think that’s going to wrap things up for us today on the VA helper podcast. I do want to invite you to visit vahelper.com, check out the blog posts we have there this week, and click on the big purple tab on the right hand side if you’d like to leave us a voicemail message or ask us a question that you would like us to answer on the show. We’ll talk to you again next week. Have a great weekend.

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