In a recent CEO Stars session, we shared a discussion on ‘value’ and what you charge versus what you’re worth.
Shift to the familiar story about the person who takes his luxury sports car to a mechanic. The car needs a new part. The bill is a whopping $750 for a 30-minute job. The customer says, “Why is this bill so outrageously high when all I needed was one small part?” The mechanic explains, “Although the part was only $45, you’re paying for my years of experience and value on working on these precision-made cars.”
Back to the business of running your agency – why, for example, does one agency charge $10,000 for a logo and another charges $25,000 for the same logo? Consider the fact that both agencies are of similar size, both in the same market and both dealing with similar client budgets. In other words, everything’s equal. So why the huge pricing gap? The answer: confidence, experience and a strong self-worth.
The agency owner charging $10k says, “Gee, I could never get $25k, how do you do that?” The agency owner that charges $25k says, “I get it because I know my value and the experience I bring to the project guarantees that the client gets more than just a logo that anyone can design and, I know I’m worth it.”
The answer comes down to ‘worth.’ What are you worth? What value do you place on your experience?
I believe worth and value conversations go much deeper – delving into the cranial roots of your own self-worth. Some call it self-esteem. Others call it under-estimating yourself and the value of your experience.
Admittedly, I’ve struggled at times with self-worth. Because of the emotions of the business we’re in, there are days when my brain says, “I ain’t worth shit.” Fortunately, over the years I’ve trained my mind to overcome those cerebral battles quickly.
The question of pricing isn’t ‘what should I charge’ – but more of ‘what am I worth?’ There’s no formula, no complex calculations other than to make sure you’re making a great profit and your costs are covered.
Fact is, what you are worth is what you want to be worth, and the best way to calculate that is by looking in the mirror and picking a number!
Look in the mirror and pick a number. Can you live with it? Are you worth it? You have the choice to set your own value and the good news is that the higher your fees, the better your clientele – and (surprise) you don’t need a lot of them.