"Over-priced services" usually a symptom of another problem

friday, 15 april of 2016

By Trey Ryder

Lawyers who don't attract enough new clients often conclude they have set their fees too high. And while it's possible this is true, in most cases the problem is not their fee.

If your market area is made up 100% of people who make only minimum wage (an extreme example), then yes, they might not be able to afford your fees. (You should think about relocating your office.)

But in most cases, when lawyers think their fees are too high, this is a symptom of an inadequate marketing program. It comes down to the value/price equation.

The value/price equation says clients will pay your fees as long as they believe the value they receive from you is greater than the price they pay. If the value they believe they get from your services is lower than the price you ask, then you have a problem and they likely will find another lawyer.

One basic element of a competent marketing program is to make sure your prospects believe that your services are worth much more than you charge. In short, that your value is greater than your price.

This may boil down to a simple communication problem. How well do you communicate to your prospects the value of what you do for them?

ADVICE: I encourage my clients to charge on the high end. It's much better to be the most expensive lawyer in town and have people appreciate your knowledge and experience -- than to be the cheapest lawyer in town and have prospects question your skill.

Certainly, not every person in your city can afford you. But you don't want everyone as a client. If only 30% of the population can afford you, then ask yourself if you can earn a good living from that 30%.

Not long ago I received a call from a tax and estate planning lawyer who was seeking high-income clients. He wanted as clients only people who had incomes in the top 5% of the local population. But he wasn't sure enough of those people existed for him to launch a marketing effort. His market area has a population of 2,000,000. 5% of that number is 100,000. I explained that if he got only 1% of the top 5% as clients, he would still have 1,000 new clients.

And while 1,000 new clients seems overwhelming, it points out that the number of prospective clients in almost any target audience is greater than most lawyers care to handle.

No matter how narrow the audience you're trying to reach, you can probably find hundreds of prospects in that target audience. The key is having a competent marketing program that can effectively identify, reach and harvest those prospects so they become your clients.

Don't fall victim to the trap of lowering your fees. When you cut your fees, you undermine your credibility and you attract clients who want only low fees. These clients are usually the worst clients you can attract. When you accept clients who nitpick about fees, they will needle you to death and then jump to another lawyer when he offers a fee $1 less than yours.

The only way -- THE ONLY WAY -- to get past the fee problem is to elevate yourself above it. In a marketing sense, define your practice or firm as so unusual in your skills and abilities that your prospects wouldn't dream of hiring any other firm. (That takes a really good marketing program.)

If you sink into the problem and start lowering fees, you open an enormous can worms that, without exaggeration, could destroy everything you've worked so hard to build.

If you're getting fee complaints from clients and prospects, my first thought is that these clients and prospects are not in your prime target audience. (You MUST target your marketing specifically toward the audiences you want to reach, realizing that many people are not in your target audience.)

In summary, if you think you may be over-pricing your services, develop better ways to convey your value to your prospects. A competent marketing program should soundly defeat this problem.

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© Trey Ryder
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