Do you want fries with that shake?

Raising your rates is the number one way to enhance your revenue and impact your bottom line. Up-selling is the second. Neither requires overhauling your Marketing Plan, acquiring new customers or revamping your website.

I can hear the number one objection to raising rates right now. “But, but,” you sputter, “ I will lose my customers.”

Not if you do it the right way. Here’s how:

Be proactive: 

Contact your customers the quarter before you plan to do it or 60 days before a major holiday, such as Labor Day, New Years, Memorial Day and let them know that if they have anything on their desk, you should send it over now so that they can save money. That never fails to give me an uptick in assignments. They are your regular customers and you want to help them.  Explain that you haven’t raised your rates for a long time and need to keep pace with inflation. You will be respected for that. I had one client many years ago say that my rates didn’t reflect my value to their business and they wondered why I was so cheap. That was a quick lesson learned. I started to apply higher rates to first-time buyer pitches. The more I charged the better quality of clients I attracted. This bears repeating, the more you charge, the better the quality of clients you attract.

 A simple 10% increase and rounding up is not going to drive your clients into the poor house, but billing 1,000 billable hours at $140 per instead of $125 per a year is going to put $15,000 minus taxes in your pocket for the same amount of work. Overcome your own objections. 

Rounding

When you do your next increase, $95 an hour doesn’t become $100 an hour. It becomes $110 an hour. By rounding up and not down you give yourself a bonus to offset all those non-billable hours you put into your business. Don’t sell yourself short.

Tip- Rush Assignments and Holiday cases are a premium, not normal rates and never, never done at a discount. “Because this is a rush assignment, I have to set aside my other planned work and have to reschedule it. That takes time. Because of that, I need to charge 1.5x. You understand, of course.” Guess what? They do. They expect you to charge a premium. 

 Be prepared to walk away if they can’t respect your time. Same goes for Holidays.

 I had a first-time client-lawyer on a criminal defense case call me up late Friday afternoon of the Easter weekend with the expectation that I could try one more time over the weekend to interview known witnesses that were ducking me. (Case wasn’t going to trial for months, but the lawyer wanted something to argue with the prosecutor about at the Monday morning status hearing). I offered to do the weekend cold calls the following weekend, as I explained my weekend was already scheduled with family visiting from out of town. The lawyer got mad. I stood firm. I could hear Happy Hour going on in the background over the phone. The lawyer got madder. No amount of premium pay would have changed my mind now and I couldn’t outsource the case. So there we were. We agreed to part company at that point.  That customer became an instant “one-off”. Later, I saw that the lawyer had taken down their shingle from in front of their brownstone office and space was now for rent. Maybe the lawyer was having too many ‘unhappy hours’. 

There are times when you have to jump and run, sometimes it can be on your “Low Bono” cases. Your customers will respect when you can, but shouldn’t always expect that you will. It should be said upfront that holidays and rush assignments are times when a premium is paid. You are setting expectations.  

If you offer services to consumers, the question of rates will come up at some point (sooner than later for tire-kickers). Make sure you know exactly what they want, their sense of urgency and what has already been done to alleviate their pain, then take a deep breath and tell them how you can solve their problem and that leads me to the next tip. 

Flat Rates and Budgets:

You offer Joe or Joanie Consumer a budget. “And I can do all that (spell it out) and deliver a report by (date certain) for X amount of money.”

 X equals the approximate number of hours at your new rate, plus mileage and expenses, plus a little cushion. How many times have I heard a PI discount their services to get the sale, before any pricing objections? You heard the prospect’s tale of woe. You have the solution to their problem. You have done this countless times before. You are licensed, bonded and insured. You have overhead. Give them the budget. If they want to haggle on price, offer fewer steps to take and repackage the deal, but don’t sell yourself short. This is self-respect, plain and simple.

Tip-You are better walking away from a grinder and spending that time marketing high-pay/fast-pay clients then moaning and bitching while working a case at a steep discount. We’ve all done that. Why do we continue to do that? Is it because we would rather bitch and moan than pick up the phone and make a marketing call? In future issues, I plan to help you take the sting out of marketing calls.  Steep discounting cases to stay busy will go the way of dinosaurs in your business.   

For your B2B, B2C and P2P (Professional to Professional) prospects, you just happen to have that handy-dandy Flat Rate. You hear their needs and immediately you know that you have a flat rate for that. “We do this sort of thing all the time. We have a flat rate for that. It’s $999.00.” It does two things. It shows you are the expert and it cuts off the haggling. This is what I charge for your type of issue, a flat rate says. 

“Unless something goes sideways, that is all you have to pay,” I say.

Most business people appreciate capping an expense to their business. Lawyers particularly like flat rates. It saves them from having to go back to their clients for additional authorizations.  

In most repetitive types of assignments, you can bundle and sell several unique services as an attractive flat rate. 

For example, I bundle five distinct steps in my online locates. If it takes me a half-hour to do the steps, analyze the data and another quarter-hour to package the report and type up the results. I have expended three-quarters of an hour and incurred the expense of each database search. Some take longer, some take less time, but in the end, week after week, month after month, I average about that much time and expense. I flat-rate it at 1.36 times my hourly rate. That is a premium for me and I give excellent value to my clients. Even found people in the witness protection program. Twice!

I also flat-rate signed statements. I carry an iPad and a portable battery-powered printer to make the process faster and my clients appreciate the neatly word-processed statements as opposed to what my second-grade teacher, Mrs. Wright described as my ‘chicken scratch’. The trick is not typing faster, it’s about scheduling the statement, then sandwiching it with other time and mileage cases in the proximate area. There are times when I have to go back to see the interviewee, but those times are offset by when I can schedule statements back to back to back. My premium on that is 1.5 times my hourly rate. I like taking statements, I am good at it and I get paid nicely to take them. With flat rates, you can sometimes offer 4 for 3 or 3 for 2 discounts, if you can do them in quick succession.

Surveillance? Surveillance plus what add-on gives more value to your client and makes up a premium package?  Why do you think there are Silver, Gold and Platinum packages of benefits and features with many software applications?

Tip- A flat rate of $199 sounds better than $200, just as a final bill of $2,997.36 goes down easier than $3,140.70. (this slight rounding down discount is to help the client avoid sticker shock)

What services can you bundle for your clients to make a flat rate? 

Up-Selling

An up-sell is a variation on the flat rate. The key difference is that the flat rate is service-related, i.e., services that you supply, whereas an up-sell is case-specific. The up-sell can happen at the onset of the case. “We ought to background the witnesses before we interview them, don’t you agree?”

If you discover something during the case like, “You know, this (event) happened here five years ago. I bet I can find the people who used to live there, they might have seen what happened. Whaddya think?” There is a flip side to this called a down-sell*

Up-selling is making more work for yourself and more money on the case. There is no law against revising a budget as more leads are discovered or converting a flat rate to an hourly to run down specific leads. Some investigators might balk at this, “Why would I do that?  I have more work than I can shake a stick at.” 

The business-minded investigator says, “I want to do a good job, I know these SUGGESTIONS can help meet the client’s needs.” 

To answer both diametrically polar responses, you are up-selling to do right by your client. It is not about putting more money in your pocket; the money is a natural by-product of doing the right thing by the client and doing good work that results in uncovering more leads that can make their case. That is the best type of up-sell.

 You are not the car dealer in the third hour of mind-numbing negotiations when you try to slip the $495 additional charge for under-carriage rust protection on the sales contract. Does anybody remember Rusty Jones?

Here is another take on up-selling. So much money is left on the table by giving the client what they think they want and not really finding the facts that they need. Why do we do this? It is safe. Do what they tell you to do. Stick to the four corners of the assignment. Next case! 

Stop! Mind Reset!

Find out what they need at the onset. do the work to the best of your ability and if you think of other things that would help the case, don’t be bashful, communicate and offer a revised budget or a new cap. 

Tip-  Add another column to your assignment log spreadsheet with a column for up-sell and figure how much up-sell you made on that case. Tally that number with all your up-sells every quarter. You will thank me.  

You will see that up-selling is much easier than the time and cost of acquiring new customers. 

Raising your rates and up-selling takes practice, but with time they will become second-nature. 

Like the GEICO commercial says, “Even a caveman can do it.” 

*The flip side of the up-sell is the down-sell. Infidelity surveillance cases come to mind, right away. Sometimes you just need to tell the suspicious spouse that if it quacks like a duck and if it walks like a duck, it’s a duck. It is better for them to save the money they would spend on you and use it to pay for a better divorce lawyer. Your experience tells you that is what the client really needs. 

Just last Thursday, a teary wife told me that her husband had packed Viagara for the business trip that he was away on at the time of her call, She then detailed a long list of damning evidence accumulated over the years. When she was done, I declined the case and advised her to find a good divorce attorney. I could not take her money in good conscience. (I am licensed in a no-fault state.)

Nobody likes taking candy from a baby.