If I asked you to take a slow walk for an hour, or to run for an hour, which one would you expect to be more effective? Don’t overthink it here. In the space of an hour, the run would burn more calories and have a different impact on your overall health. So, even though you’re spending the same amount of time exercising, you would be getting different results. Stick with me; this isn’t fitness advice. This is a principle that you can apply to your business when you learn how to charge what you’re worth.
Time Saved Is Money
Think about a pitch or a sales call. It takes just as much time for you to sell a high ticket item as it does to sell a low ticket item. You’re putting in the work to explain the benefits of the offer, talk through options for the client, and answer questions. Whether you’re selling a $500 offer or a $500,000 offer, the selling work is the same.
Bottom line: It takes just as much time and energy to sell something inexpensive as it does to sell something more costly. The difference is your return on the offer. So which one would you rather spend your time and energy on?
Attracting Value-Based Clients
Throughout your career, you might have noticed that the people who want to pay the least are often the biggest pain in the butt. I can guarantee it. In contrast, those clients who are paying more are focused on the value of an offer, and they are easier to work worth. They can also be easier to close with.
For example, if you’re selling a big ticket item, it can often be just a 5 minute conversation. The potential client seeks the value of what you offer and is willing to pay for what it is worth. This sets you up for a respectful client relationship that is results-focused.
In contrast, selling a low-ticket item can take longer. You may have to overcome more price objections. You then will have to sell based on cost rather than value provided. Even after you sell, the client will continue to be focused on cost rather than value. This will set you up to constantly overcome price objections, concerns, and unpredictable headaches.
In the end, while the initial time spent selling either offer may be the same, you’re setting yourself up for more time and energy invested in a low ticket item. Time is money, so that cheaper offer becomes more and more costly for you.
What Are Your Services Worth?
I recently spoke to someone about charging what they’re worth. This person runs a digital marketing agency. Being able to provide the services he offers effectively requires special training, years of experience, and countless hours in learning and practice. Their pricing structure was based on the amount of time spent providing their services. However, they needed to charge for the years it took to them learning how to work quickly and effectively.
Let’s look at this as a sports analogy. If you had a five year old try to shoot a basketball into the hoop, it would take them much longer to succeed. They may not even make the shot. However, if you asked Steph Curry to shoot a basketball into a hoop, he would likely succeed in the first try. The five year old needs much more time to accomplish the task, so should he charge more than Steph Curry? Of course not. Curry’s value is based on the results he can guarantee, rather than how long it takes to create the result.
People are essentially paying you a percentage of the results you provide. If you are confident in your results, you can be confident in charging your worth. The problem comes when you doubt the value of your service, avoid the conversation around cost, or bend to serve the lowest bidder. This doesn’t give you a good return on the time and expertise invested, and it communicates to your client that your value is worth whatever they’re willing to pay.
The Confidence Factor
So let’s look at confidence a little further. In an insurance agency, there are many different life insurance policies. Some are basic, like a life insurance policy that is just enough to cover funeral arrangements. Others are similar to an investment. They cost more but will provide financial security and peace of mind to your loved ones for years after the policy holder passes away. If an insurance agent is going to sell a large, whole life insurance policy that costs $5,000 – $10,000 monthly, it takes confidence. However, they know the value the policy provides and can recommend it without doubting the cost or down-selling to a cheaper policy.
The same is true for you. You have to have confidence in what you’re charging. How do you do this? Assess your offers. What value do they provide? What is the return on your client’s investment? What is your investment (ie. time, money, experience) to provide the offer? Now look at your current prices. Do they reflect the total value you provide?
Confidence starts with knowing your worth and standing by the value of what you provide. As you begin to grow into charging what you’re worth, that confidence will trickle down into all your business practices.
What do our customers want and how do I know this is the right answer?