You have been there (most of us who have kids know what I'm talking about). Your family goes to a carnival or fair and your kid wants to play a game and win a prize! After 5 tries and $10 or $20 your kid wins a goldfish… “The Bestest Prize EVER!!!” You spend the rest of the night lugging it around (and try not to kill it). Then you get home, find or buy it a bowl. Then a trip to the pet store or department store to get it food, and water conditioner, and more. All this to keep a $1 fish alive to keep your kid happy. When you add it all up you can spend $50 without blinking an eye for something that your kid pays no attention to after 2 days!
The difference between free and $50 is value. Some people will say “I paid $50 for a goldfish”, while others will say “That is one of the best $50 lessons I can teach my child!”. You fill in the blanks on that one, but what matters is the perceived value. Some people will judge you on price, while others will look at what you bring to the table and how far you can take them to make more money? Value is in the eye of the beholder, but it's your job to prove it!
How do you do that? By meeting them where they want you to be. Some people will chose price while others will trust and value your experience. Why and how you do that is up to you!
What follows is some of the ways people perceive your business (it could be products or service), but what matters is what your customer (or perspective customer) perceive…
- Products – Products are a commodity. There is $1 toilet paper and $5 toilet paper. It depends on whether you value savings, verses comfort, verses elegance. What matters to you… matters to you. What matters to your customers (or potential customers) matters to them. If you want to play Wal-Mart with them (the low price leader), you may get lots of business. But if you want to play Macy's, Von Maur, or Neiman Marcus, then you have to be in touch of what people pay a premium for.
- Differentiator – The difference between Wal-Mart and Macy's is customer service and quality. If you are not willing to provide a ‘Baker's Dozen', ‘Under Promise and Over Deliver' customer service, then competing on price is your niche!
- Time – We all have the same amount of hours in a day, a week or a year… But some people attach different values to them (the Lawyer = $400 vs the Haircut = $13). Some people will judge you by your hourly rate. You can't compete with China or India and will never make a living making less than them, so learn to change what you compete on. You have to be ready to let people know why you charge $50, $75, $100 an hour or more. Some people will never get the saying “You get what you pay for”, and chances are you don't want to work for them. Avoid the Wal-Mart shoppers and concentrate on people and companies who understand the value of working with people who may charge more, but ultimately make them very happy, realize the return on investment, or save them money. It's your job to convince them!
- Differentiator – There is nothing wrong with charging $15 an hour especially when that's what they really need to fill a niche. If you can sell it for $30 o $50 then go for it. Just make sure you have a solid value proposition. Selling your time is a hard commodity to justify to those on salary. You have to make a case on why you are making two to five times what they make an hour. Be Ready!
- Knowledge – This is the most valuable and hardest thing to sell. In order to sell knowledge, you have to prove that you are experienced (especially those you are selling to). Experience begets knowledge. Knowledge come from learning form experience, and the goal should be to turn knowledge into value for others. Value is usually equated to return on investment. There are millions of consultants out there… What makes you different? Can you translate ‘Experience' into “Income” for people other than yourself? There are many ways to sell knowledge, books, seminars, webinars, coaching, teaching and more.
- Differentiator – There is a huge canyon between those giving free speeches and making $10,000 a gig. You have to start somewhere and gauge who your audience truly is and what your value is to them? Always pay it forward and you will never be disappointed!
I have a value proposition that I want to make my services help other make money… three times what I charge them. Marketing in my world should never be an expense, but an investment. Do you have a value proposition (aka Pro Position) and how you you make that clear to your clients or potential clients? What are your thoughts and ideas?