top of page

Webinar by Next Level Financial "Master Service-Based Company Pricing: Keys to Achieve 60%+ Gross Margin"

Updated: Jun 26


If your service-based business has consistent revenue but is not turning a profit month over month, this is a webinar you want to attend!


Join us for a power-packed 45-minute, free online webinar where you'll discover the essential steps for service-based companies to excel in pricing, ensuring gross margins of at least 60%.


Learn how to:

⚬Analyze profitability by client

⚬ Create an adjustable pricing model

⚬ Account for direct and indirect costs



Register in advance for this webinar:


After registering, you will receive a confirmation email containing information about joining the webinar.


Meet Your Speaker:

James Williams Jr., Co-founder and CFO at Next Level Financial, holds a Chartered Financial Analyst (CFA) designation. With a passion for supporting mission-driven organizations, James brings extensive expertise in accounting, investments, financial strategy, and asset management. Outside work, he enjoys staying active, playing drums, and spending time with his family.


Q/A from Pricing Webinar

 

1) If you increase pricing ..do you increase services rendered, or how do you balance? 


When increasing pricing, it is important to know your numbers. Understand how profitable or not profitable you are on that particular service. From there you will have better context to determine your communication strategy. The next step is to ensure that the customer is happy with the value your business provides. If the customer is happy with the service as is then they probably will be more willing to accept a price increase.  If you want to add more services, you can, but just make sure you are still achieving your target gross profit.

 

2) How do you communicate the price change to repeat customers in a way that does not hinder contract renewals? OR do you keep existing customers in the same price model?

 

I suggest that you plan well in advance of the contract renewal. Ask for feedback to ensure that the customer is happy with your service. Once you are comfortable that the customer sees the value in your service, communicate at least two to three months before the price increase takes effect.

 

3) How often should you revisit the numbers?

 

Review your pricing on a regular basis. At least quarterly.

 

4) What category on this slide does Sales Tax fit into? 


Sales tax is not included because it is a pass-through. The customer pays the sales tax, which you then send to the government. 


5) We would love a calculator or spreadsheet so we can calculate our own numbers afterward. This way, we can know our numbers like James knows his numbers!

 

Consider it done! Here is a profitability tool so you can analyze profitability by each client or service. 

 

6) Why is the overhead per client so expensive? Why would the economies of scale not apply here and not decrease?

 

Great observation. For demonstration purposes, I used a simplified model to estimate overhead. You are correct. The higher the increase in revenue, the better economies of scale achieved.  


7) For the “Demand-Driven Pricing,” what is the ideal Conversion Rate?


The ideal conversion rate for a service-based business using demand-driven pricing varies but typically falls between 2% to 5%. However, the optimal rate depends on industry standards, the target market, and the specific services offered. 


It depends on the industry and the volume of leads being generated.  Generally speaking, a solid conversion rate is 30% of qualified prospects that you actually have a consultation call with.  If you are converting over 50%, that is a signal that a price increase may be warranted.



17 views0 comments

Comments


Connecting Dots

Subscribe to Next Level Insights

Subscribe to our bi-weekly newsletter & receive a free recording of our webinar, "Service Biz Owners: Strategic Finance for Navigating Uncertain Times."

bottom of page