Business, Growth

Should You Really Charge ‘What You’re Worth’?

I had a bike accident. The carbon-fiber handle bar snapped, and I took the bike into the shop. The shop owner asked if I wanted a post-crash inspection, on top of getting a new handle bar installed.

 

The post-crash inspection cost $100. (For reference, they charge $30 labor for installing a new handle bar and bar tape)

 

The inspection probably doesn’t take them much longer than installing a new handle bar, but I had no problem paying for that. In fact, I appreciated that he asked if I wanted to have it done.

 

Why?

 

It’s not about how much time the mechanic spends his time working on my bike.

 

If my front fork snapped during a steep corkscrew decent at 30mph, I would be facing a lot of injuries and medical bill if I survive at all. Is that worth the $100 to make sure it doesn’t happen? Hell yeah.

 

Charging what you are worth can kill your self-confidence

 

I have a pet peeve about the catchphrase charge what you are worth – which also has become quite cliché among business coaches.

 

In terms of pricing and getting paid what you want, this belief could be doing more harm than good.

 

Why?

 

The amount of money people pay you has NOTHING to do with your self-worth.

 

In fact, if you tie how much your clients are paying you to the concept of what you are worth, you are releasing control of your self-worth into the hands of others (who may or may not pay you due to factors you cannot control, including their own dysfunction).

 

I don’t think that’s a good idea, do you?

 

If you tie your self-worth to your pricing, any kind of rejection can dampen your self-confidence and increase your self-doubt – which of course does not support you commanding premium pricing.

 

Instead, charge what your products and services are worth to your clients. Don’t base your pricing solely on how many hours are included in your package. (Of course, it is highly likely that if you put in more time you would deliver more value.)

 

What you charge is about delivering relevant value to the right people at the right time.

 

Think about the value your clients are getting. Creating and delivering value is the key to getting out of the hour-for-dollar model.

 

When you understand the value you deliver to your clients, you will be able to confidently state your fair price.

 

I often walk my clients through a value delivered exercise, and here is an example:

 

Let’s use health coach as an illustration. First, list out the money gained or saved in a year by working with a health coach:

  • More energy, which means no 3pm latte – save $4 a day, $80 a month, that means $960 a year!
  • Get off some medication and save on doctor’s visit – let’s assume a saving of $80 a month to be conservative, which means $960 a year!
  • Learn to prepare healthy meals on a budget (say, $15), instead of spending $30 on takeout 5 nights a week – save $300 a month, translating to $3,600 a year!
  • And, what if the better focus and productivity at work leads to a raise… the client may make an extra $10k!

 

Put aside the pay raise, just the first three items can save a client an upward of $5,500 a year (aside from being healthier and looking better!)

 

With that solid monetary value, it is much easier to command a fee that reflects the value being delivered to the clients or customers.

 

If you can separate your self-worth from the value you deliver through your services, then the question “how can my time be worth that much” will not even enter the equation.

 

How to deliver more value:

To deliver more value, you need to understand what is valuable to YOUR clients.

 

Your focus should be on relating and articulating your relevance to your ideal clients, so that they understand the value you deliver by helping them solve a problem they have.

 

There is a misconception that when you raise your price, you have do/add more stuff and hence adding to cost – which is not true.

 

Your clients and customers want a solution to their problem, not to spend hours on the phone with you, or to have to add a lot of things to get there.

 

In fact, if you can trim the fat and create a package that speaks directly to your clients’ problem without making it feel like a lot of work, you will probably be able to charge more and work less.

 

Your turn – review your offerings and go through the value delivered exercise, and share in the comment the value you create for your clients, vs. the fee you charge:

Ling Wong

Ling is an Intuitive Brainiac. Through her unique blend of Business + Marketing coaching with a Mindset + Psychic Twist, she helps the multi-talented and multi-passionate maverick solo-entrepreneurs distill ALL their big ideas into ONE cohesive Message, nail the WORDS that sell and design a Plan to cut the busywork and do what matters, through her intuitive yet rigorous iterative process born out of her Harvard Design School training and 10 years of experience in the online marketing industry.
Ling has the superpowers to help her clients optimize the space between individuality + originality vs. “tried-and-true” marketing so they can express their WHY unapologetically and profitably without reinventing the wheel.
Find Ling and grab her free “How to Find YOUR Winning Formula” Training Series here.

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