How did you set the prices for your business?
Let me guess…did you look out into the world and ask, “What will people pay?”
If so, you have probably underpriced the service you provide.
Because our meter for answering that question is way off.
In reality, we don’t really know what people will pay.
We know what we think people will pay for us, but our self-valuation is usually too low.
Instead, I think we have to shift the way we come at this.
Pricing the work is different than pricing the value.
When pricing a service or a widget in terms of hours, we often ask what an hour is worth to us.
The prevailing view is that work is equal to hours.
But that’s a 40-hour-per-week employee’s viewpoint.
A business owner doesn’t ‘do the work’ for 40 hours, we run our business AND do the work.
Instead of assigning a price measured by time, what if we priced using VALUE as the measurement?
Let’s look at the value our customer gains from hiring us or using our product.
What can they do with the time they have saved by not having to do that task?
Or how much more could they make?
Could they close a $50,000 sale?
Pricing from this place requires two things:
Firstly, a deep understanding of your clients (current and potential).
Have lots of conversations.
Talk to them, ask questions and learn what using your service will allow them to do.
Secondly, clarity and objectivity around your worth.
What is your value?
That is a lot harder to come to grips with.
It is always harder to see and appreciate your own value than that of others.
Most of us have grown up with messages that keep us small.
“Don’t get too big for your britches.”
“You’re not worth it.”
“Don’t be too loud.”
Pricing is all about the noise you create in the world.
Raising your prices can feel very “loud” to some.
Those who try to keep you small are worried about being noticed themselves.
And the more you charge, the more you are going to be noticed – for good and bad.
Some may criticize you for your pricing, but don’t let those naysayers get to you.
If you know the value you provide – embrace it!
When you understand your value and really own it, you can laugh at your naysayers all the way to the bank.
Until then…stay passionate!