I’ve talked a bit here and there about pricing (more often there than here, as it turns out), but I was interviewed a few weeks ago by Lee Stranahan for his “How Much Should I Charge?” course and it got me thinking, so I wanted to write about it now.
(And also, Lee is worth checking out even if you don’t give a shit about pricing simply because he’s interviewed director Kevin Smith and his Facebook profile picture is of him with Johnny Rotten from the Sex Pistols. So, yeah.)
Anyway, on to the topic at hand: Pricing yourself.
And at this point, allow me to climb up onto my soapbox, because most of you out there — you designers, coaches and consultants, writers, illustrators, photographers, and whatever else — are going to screw up this whole pricing thing. You’re going to screw it up by undervaluing yourselves, because you think that what you do is a commodity, like a pack of razor blades or a toilet seat cover.
This may seem obvious, but it’s worth really thinking about, so think about it: Creative services are NOT A COMMODITY.
Read that again. Write it on your office wall. Crochet it onto your pillow. Tattoo it on your spouse.
What you do is not a commodity, so stop acting like it’s something you can pull off a shelf at Wal-Mart. Stop ranking yourself against those in your niche in the way a bargain store would. Stop competing on price. Stop thinking that if you do X and Joe Blow down the street does X, that Joe’s going to run you out of business if he charges less than you do.
Photographers aren’t interchangeable. Designers aren’t interchangeable. The price of a photographer or a designer matters to clients, but it’s only one of the deciding factors, and usually one down near the bottom. Will your price weigh in your customers minds? Yes, but only relative to the rest of what you have to offer.
Customers and clients aren’t weighing whether the price is “high” or “low.” They’re wondering if what they think they’ll receive is worth the price they’re being asked to pay.
See, there is no inherent dollar value to a photograph or an illustration. What it’s “worth” to one client is different from what it’s worth to another. For instance, I hired N.C. Winters to create the banner graphic at the top of this website. He quoted me a price and I got to decide if I wanted to pay that price to have a custom piece of his art.
I was not thinking, “If I have this banner, will it bring in X more dollars per month?”
And even if I could draw a direct line between N.C.’s art and my profit, it wouldn’t tell the whole story. Has having that banner it improved my branding? Has it made me look more reputable or professional? Has it increased my image of “cool”? Has anyone seen the art, thought it was neat, and then quite coincidentally remembered it when pointing a friend to a post I made — a friend who then referred someone who referred someone who introduced me to a good networking connection?
What is the value, in dollars, of my header graphic? And what is it that makes N.C.’s work worth more to me than other people I could have hired — people who might have charged me less?
The answer to the second question is, “It’s worth more because I liked it more.” And the answer to the first question is, “Who knows?” Because I sure don’t.
The market may give you an idea of the price range you can work within, or the price range you might try to strive to rise above, but the market does not DETERMINE your price.
The most commonly overlooked fact about subjective pricing is this: The main reason that the cheapest providers in the market are cheap is because they decided they weren’t worth much. And the main reason the most expensive providers in the market are expensive is because they decided they were worth more.
Yes, people have to agree with the expensive guy if he’s to make any money, but he never would have made that money if he hadn’t decided it first.
There are good and bad photographers. There are good and bad coaches. Which are you? If you’re good, believe it — and then hike up your pants and price yourself accordingly.
Cutting prices works for commodities, but will not win you good clients. If you’re cheap, people won’t think it’s because you’re awesome and they’re getting a good deal. Instead, they will look at your bargain basement price and will assume that you suck.
Because everyone has heard that expression — the one about how you get what you pay for.
Lee and I talked about this stuff in some serious depth (enough depth that he had to cut me off or I’d go forever), and he also got some crazy good stuff from my buddies Charlie Gilkey and Caffeinated Elf. (I know it’s good because I’ve heard it.) So let me go ahead and make a totally biased suggestion — biased because I’m in it, and biased because I’m an affiliate:
If you’re a person providing a product or service that is in ANY way subjective and if you are AT ALL uncertain about pricing, go buy Lee’s “How Much Should I Charge?” course while it’s still cheap. Because I’ll bet that most of you could be charging $20 more per hour, and recouping what you paid right away. Like my wife… she charges this one client like $25 an hour or so, which is ludicrous. She could and should very easily be charging $45. I keep telling her.
If you’re serious about your business, then for real: head over and buy this course. Then listen to what we have to say and act accordingly. The entrepreneurial world isn’t a corporation with regular raises handed down from above. Nobody’s going to hand you the increased rates that you deserve, so you need to learn to ask for what you’re truly worth. And if you’re good at what you do, you can almost certainly get it.
Go get ‘em, Sparky.