Thursday, June 30, 2011

Worth vs Cost

Money, we hate to talk about, we hate to think about it, but we can’t get away from it. If you’re running your own business you must deal with it on a daily basis. How much is coming in, how much is going out, and how much you’re charging.

It’s the charging part that’s been on my mind lately. Shelly and I are developing an e-course and trying to decide how much it should cost. I’ve been thinking about the amount we charge for an hour meeting versus the amount of time actually spent working on the clients behalf. I’ve been looking at the tasks I spend my time on each day and how much each contributes to the bank. Often there doesn’t seem to be an equal exchange.

What it really comes down to is a matter of what your time, expertise, product, and/or skill is worth and the value the customer gets. It’s more than what they walk away with in their hand, it’s the experience you gave them, the new story they now to have to tell, the feeling that they’re supporting or a part of something bigger. The trick is communicating this in a way that your clients can connect with.

I used to think value was much easier to communicate for tangible products. You got something you could hold and you knew exactly what you’d do with it. With a product people can’t help but focus on the thing in their hand, but unfortunately the how and they why of it often passes right by them. It’s also much easier to compare the cost of object A to object B and see that one is significantly better made or cheaper. Hopefully yours isn’t one that gets put down.

These days I’m actually beginning to think that communicating the value of a service is easier. Since there’s nothing to hold you must paint a picture of what the customer is paying for. They are more inclined to listen to the how and why before making any judgments, because there’s nothing to influence them. Our imaginations are highly suggestible and we want to believe, we want to be better.

So in my round about way, what I’m trying to impress upon you is not losing sight of why you’re doing all this in the first place. When deciding on the price of anything, an hour of your time, a piece of jewelry or your amazing design skills, you should never say to yourself, “I’d be ok with that.” Instead you need to decide what you really need to make to pay yourself what your worth, to grow your business, to allow you love doing what you do. Then you need to unabashedly tell you’re customers why you’re product or service is so great. Toot your horn and don’t back down. Not only am I sure you deserve it, I’m also sure you could still be charging more.

I encourage comments directly to this post, but also feel free to email me directly with questions, reactions, struggles, etc.

If you're an Etsy seller in the San Francisco Bay Area, contact Jen from Mama's Magic Studio about joining SFEtsy!

1 comment:

Large Marge said...

Great post! -it will help me stay strong on my pricing at Renegade this weekend. Thank you.

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