There’s another dark side to undervaluing your work…
Very few people in business really understand pricing. Specifically, how much their clients and customers are willing to pay for something they couldn’t come up with on their own.
And it doesn’t have to be because they’re not capable.
It could be because they don’t have the time to do it themselves. Or, they’re not motivated. Or, they need you there with them, for accountability or organization or some other reason to get things done.
Then again, maybe it is because you can do it at least marginally better than they could on their own.
There are a lot of reasons clients and customers are willing to pay more.
And frankly, you should price your products and especially services as high as the market will bear.
It provides all kinds of advantages.
First off is the pure income component. More income for you is a good thing.
Second is the economics of fulfillment. Making more per customer or transaction means you can spend more (time, money, resources) on creating a great experience for your clients.
Third is the economics of customer acquisition. Making more per customer also means you can outspend competitors who make less per customer to attract those customers — one of the surest routes to market dominance.
And yet, there’s a deeper, more powerful, more important psychological component to understanding that customers and clients are willing to pay more…
It has everything to do with the balance of value and cost.
When you don’t value your services at a high enough level, you’re at a double disadvantage. Not only do you charge less, you value your services less, too.
When you put a lower value on your service, you’re going to tend to want to keep delivering, and keep delivering, and keep delivering to somehow discharge this value imbalance.
Imagine a scale. On one side is your fee. On the other side is the value you provide.
Your client sees that scale as balanced, or weighted in their favor, from the moment they agree to the transaction.
They agree to pay your fee because they believe the value of your services will be greater than their investment.
But you undervalue your services. You see the scale differently than the client. You see the fee far outweighing your service value. And so you feel a compulsion to pile on value, and pile on value, and pile on value.
What this means for you, if you’re delivering done for you services like copywriting, or time-based services like consulting or coaching, is that you’re giving up more and more of your time, for no greater fee.
From the beginning, the client saw the scale as balance or weighed in their favor. Now, you’re just weighting it more and more and more in their favor, at your own personal expense.
It’s not bad for your client to feel like they’re getting a really good deal. But when it comes at great personal expense, it becomes bad for you. And if it’s more than necessary, it can taint that relationship far into the future.
An alternative model that proves the point…
I was having a private conversation with a friend and ex-copywriter whose business model has me quite intrigued.
He was doing well as a copywriter, working with a partner to help clients build funnels and drive traffic.
They’d do all the copy, set up the advertising to get traffic, and manage that for the client.
In their best months, they were making tens of thousands of dollars together.
And… Working like dogs.
Eventually it got to be too much.
So they asked a question…
“What if we could get our clients 80 to 95% of the results, without obligating ourselves to work like dogs?”
And so they broke down what they were doing for clients. They came up with a process. They laid it out so it was easy to copy. They came up with templates and guidelines for clients to copy what they were doing.
Would clients ever get 100% of the result? In most cases, probably not.
Could they get 80% to 95% of the results and be totally elated?
Here’s how this totally flipped the value equation on its head…
These guys were doing a ton of “done for you” copywriting and funnel building work.
They stepped back and figured out how to do less — a lot less. In fact, they figured out how to get the clients themselves to do most of the work. Instead of doing the work, now they just give direction and then supervise, weighing in to answer questions and provide feedback.
They used to think they had to do more work to make clients happy paying big fees.
Now they do less, and charge a lot more per hour for the time. Yes, the total dollar amount of the fees dropped a little per client (not much!). But they are not doing anywhere near what they used to do, in terms of work volume. (In fact, they used to handle up to about 4 clients at a time, now they can work with 20 or more.)
Then, they built their own system to go out and find clients who’d be happy to pay their new fee for their new service.
Now, they look at the results they get for clients.
In their case, they’re helping their clients totally reinvent their businesses, and make 2X to 10X or more per month than they used to.
They’ve recognized that the result is what clients are judging value based on.
Before the purchase, the perception of my friend and his partner’s ability to deliver results.
After the purchase, they are happen when they get quick ROI.
It’s not about the amount of work. In fact, the selling process prepares them to do most of the work. It’s about a system that delivers results. And that’s totally independent from the amount of time, effort, or energy my friend and his team (they’re expanding) actually puts in.
THE RESULTS: The pair of them used to make tens of thousands of dollars per month, in their best months. Today, over one hundred thousand dollars per month, month in and month out.
In reality, he could probably charge 2X what he’s charging now, lose about 10% of his clients, and be making 80% more, and take those extra hours off every week.
It’s time to get creative about how you deliver value…
There are some people who will demand “done for you” services. If you choose to follow my friend’s route, they are NOT the ideal clients for you.
However, there are tons of businesses, large and small, who are simply looking for results.
They know they are working hard every day anyway.
They’re willing to invest with you if they know (actually, believe) that your system or approach or guidance will lead them to their desired result. Even if you’re primarily providing a system and making them do most of the work.
This was a stroke of brilliance on my friend’s part.
I’m sure it was actually a stroke of brilliant copying. He’s not smart enough to have come up with this on his own.
Oh wait, did I say that? 🙂
I mean, I’ve seen this business model elsewhere — he just did a particularly good job of copying and IMPLEMENTING.
And importantly, he’s ditched the head trash about value of services being tied to the amount of work he does. By finding out how to deliver REAL VALUE to the client (in terms of results) that far outstrips the fee, he doesn’t feel compelled to work harder. If the client gets satisfactory results from him working less, he works less. Everybody is happy, and he’s richer for it.
And while I’ve written about copywriters and tied this to service businesses, with a little creativity you could apply this principle to just about any business out there.
Yours for bigger breakthroughs,