The moon is in Aries in Q4 FY24

You are more in control of your prices than you realise

“The moon is in Aries in Q4 FY2024.”

Not something you hear very often. Probably because most recruitment leaders don’t use horoscopes for planning their business finances.

But they do believe in ‘the market’. Which might be as risky as making decisions based on which stars you can see above you at night.

In pricing terms, there’s a specific risk of believing in a ‘market rate’ for your services and what you need to charge in order to win new business.

The idea is that your clients are shopping around - as if walking between fruit and veg stalls at a busy street market - and getting a good idea of what recruitment services cost.

So in order to attract clients, you need to offer a price that doesn’t push them into the arms of your competition.

This thinking makes sense, at least at a street market. When people are literally able to compare apples with apples, they go looking for the best price.

But of course recruitment is not a commodity. As I bang on about on my podcast, recruitment is one of the most valuable business services there are. The best businesses are built on the foundations of great people… and we help businesses find those people.

But we find them in different ways. Some recruitment agencies build and nurture talent communities of in-demand candidates. Others plug in smart technology to get their clients what they want. Then there are different marketing approaches, advertising methods, sourcing techniques... the list goes on.

What’s more, recruiters are not all the same. I hope you’ll agree when I say that a recruitment consultant with 8 months’ experience in a generalist agency is not the same as someone who has 18 years of recruiting expertise in their niche and has the testimonials to prove it.

And finally, our clients are not generally in a strong position to compare recruiters. The majority are hiring managers who have better things to do with their time than ring round a dozen agencies to get a proper understanding of their options. They’re more likely to come to you for your reputation, or meet off the back of a call you made to them; they’re rarely as well-informed as we fear they are.

So where does the profit-killing ‘market rate’ come from?

In my experience, it is driven not by our clients but by us as recruiters. We talk, we move agencies, we round up or (usually) down… and we find ourselves convinced that the only way we’ll win new business is if we’re offering the market rate.

And as long as the moon is in Aries, of course.

The good news is there are ways to counter our natural tendencies to look for patterns to conform to. And if you can break away from the belief that your prices are driven by other recruiters, you can build a much more profitable and successful business.

If you’re looking for help in getting away from ‘market rate’ thinking, simply reply to this email and I will explain how I can help.

Jon

P.S. Here’s a good exercise to prove to yourself that you’re not a commodity. Imagine a client has told you they’ve been offered 17% from two other recruiters. If you had to pitch a rate of 17.2%, can you justify why the client should pay you a higher price?

Once you can break the natural instinct to match your competitors, you can begin to focus on talking more about value.

If you’re looking for help in getting away from ‘market rate’ thinking, simply reply to this email and I will explain how I can help.