The Art of Pricing: How Fractional Executives Can Determine Their Rate

The Art of Pricing: How Fractional Executives Can Determine Their Rate

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Marketing at Baton
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The Art of Pricing: How Fractional Executives Can Determine Their Rate

As a fractional executive, your time is literally worth money. Making sure that you have a rate that is appealing to prospective clients as well as being worthwhile for you is a sweet spot that many fractionals struggle with. Yet there is a formula and a process that can help you find that sweet spot and get paid what you're worth.

Let’s dive in.

Understand Your Value

As Seth Godin, the marketing mastermind, often says,

"You are not a commodity."

You are a unique blend of skills, experiences, and insights. As a fractional executive, you're not selling hours; you're selling the value you bring to a business. So, the first step in setting your rate is understanding your unique value proposition. What do you bring to the table that no one else does? Once you've nailed that down, you're on your way to setting a rate that reflects your worth.

Research the Market

Now, this might sound a bit dry, but bear with me. Market research isn't just for big corporations - it's essential for fractional executives too. Spend time understanding what other fractional executives in your industry and region are charging. This will give you a ballpark figure and help ensure you're not underselling or overselling yourself.

Consider Your Expenses

When setting your rate, it's crucial to take into account your overhead expenses. This could be anything from your home office setup, software subscriptions, or your health insurance. Your rate should cover these costs and leave you with a reasonable profit margin. After all, we're not in the business of breaking even, are we?

Factor in Your Time

As a fractional executive, your time is your most valuable asset. It's important to factor in not just the time you spend with your clients, but also the time spent on administrative tasks, professional development, and networking. Remember, the time you spend on these tasks is time that could otherwise be spent with clients, so it should be included in your rate.

Communicate Your Value

Once you've set your rate, the next step is to effectively communicate your value to potential clients. You're not just quoting a price; you're telling a story of the value you provide. Highlight your unique skills, your proven track record, and the tangible results you've delivered for previous clients. Make it clear that hiring you isn't an expense; it's an investment.

Be Flexible, Yet Firm

Flexibility is key when setting your rates. You might need to adjust your rates depending on the client's budget, the project's complexity, or the current economic climate. But remember, while flexibility is important, it's also crucial to be firm. Your rate reflects your value, and you don't want to undervalue yourself.

Setting your rate as a fractional executive isn't a one-time thing. It's a continuous process of assessing your value, understanding the market, and communicating your worth. It's about standing your ground and not being afraid to ask for what you're worth.

As you navigate this journey, keep Seth Godin's words in mind:

"Price is a story."

Your rate is more than just a number; it's a story of your value, your expertise, and the unique magic you bring to the table.

Here's to setting your rate, standing your ground, and creating magic as a fractional executive. Let's make it count!

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