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Pricing Your Mediation Services…
17 August 2006Some interesting questions to think about:
To what extent does your fee structure reflect the value you provide?
- How are your fees viewed by the marketplace?
In our current society, we are bombarded with advertising and marketing. Conventional marketing wisdom urges one to attract customers with “sales” or a reduction in pricing.
I was reading a book today where marketing experts were positing that offering sales and other price cuts is a bad strategy for long term growth of a business. They reasoned that in the long run, you train people to only buy when there’s a sale and you send the message that your product is over priced to begin with.
What do you think?
Does conventional marketing wisdom have it all wrong?
Is it a bad idea to attract customers with sales and special promotions? What about stable good prices? Obviously, there is a world of difference between marketing a product and marketing a professional service.
I don’t recommend offering special pricing with your mediation practice. I tried it when I was first starting out and I can honestly say that it’s not a good strategy for a service professional. I did get calls from people who wanted divorce mediation; however, I do not do any divorce mediation.
Consumers who directly purchase mediation, like divorcing couples, are attracted to low prices since this maximizes their cost savings. [Thus, it may not be a bad strategy if you are a divorce mediator]. One client who was hiring me said (about my promotion) “that is a ridiculously low price for a mediation.”
So, the lesson I learned, don’t price yourself too low to bring in business in mediation (unless as per above you want to help lower end divorcing couples or some other lower end niche). With professional service — perception is everything. With mediation (and perhaps other professional services), particularly at the higher end, if you price yourself cheaply people will tend to think that you aren’t any good.
Eric Galton (www.lakesidemediation.com), one of the world class mediators I interviewed in connection with the Mediation Biz & Marketing Success System tells an interesting story. He was asked to do a mediation out of state and the attorney who was hiring him questioned why his fee was so low? Eric has an excellent reputation and is an excellent mediator (from what I can tell from anecdotal evidence and his success) and this attorney was wondering why someone so “great” didn’t charge more. Eric said he told them if it would make him feel better about hiring him he would charge him a higher fee since it would make Eric feel better 
.
If you are expensive, people may wonder why and may assume that if you charge a high fee there is a good reason for that. Obviously, regardless of where you fall in the range of fees you need to back up your fee with providing amazing value and satisfaction to your clients or you won’t be around in the long run.
Another aspect to consider in your pricing is what segment of the market you are targeting. If you want to work on the smaller cases, then price lower. If you have worked in the upper tier of litigation firms or the upper tier in counseling, engineering or some other professional field, and you want to attract higher end clients, price your fee higher. The lower end clients may be turned off by your fee. For many businesses, the price of mediation is so small in comparison to the cost of litigation that there is great elasticity in the price. Price is definitely not the primary consideration in hiring a mediator — perceived expertise or quality is. Ironically, the higher the fee, the higher the perceived expertise.
You will have to find the right fee for your target market. There are no hard and fast rules and there is a relatively large range from around $200/hr to over $800/hr. Many highly successful mediators charge a flat day rate. What the right price range for you will depend upon 1) your experience; 2) your target market (what end of economic spectrum); and 3) your geographic area. Obviously you can charge more in New York than you can charge in Kansas.
Value yourself highly and others will too.
And, of course, always works to exceed expectations and provide amazing value.
NEVER GIVE UP!
Your partner in peace,
Kristina Haymes
p.s. I have been thinking about this “sale” discussion. Originally, during the pre-release phase of the Mediation Biz & Marketing Success System, I was offering an intro special of $100 off. [The current special offer expires on 8/31]. However, after reading the provocative book on marketing today, I am wondering if this is the last special I offer. I don’t want people to think my “real” price is too high (it is high but that’s because you get amazing value and wisdom and tools to build your dream mediation practice). Nor do I want to condition people to only buy my mediation practice building products when they are on “sale.” Hmmm… I have to honor this current sale, but I can honestly say that it may be the last special offer I provide… what do you think?
Check it out at www.mediationmarketingsecrets.com.
Posted in Marketing Strategies, Practice Building Advice, Answers to your marketing & practice building quest
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November 6th, 2006 at 8:54 am
[…] This month Dina has a host of teleseminars. You may recall that I have written about the topic of setting fees for your practice in a prior post. For those of you who would like more guidance on this topic, Dina gave me a postcard for an upcoming teleseminar on November 30 about “Setting Fees That Feel Right and Still Make Money.” For more information, check out Dina’s practice builder site and be sure to tell her Kristina sent you. […]
October 12th, 2007 at 1:04 pm
[…] Pricing Your Mediation Services […]