Do you know your worth?
There is a lot of confusion in marketing about worth and value, especially for solopreneurs whose service is themselves, or whose products are created by them. Since pricing is a function of marketing, let’s take a look at this.
Do you know your worth? How about your value? Although necessary to know for your product or service, this is altogether incorrect to apply to ourselves. When we say these phrases in marketing, it’s misleading. What we are really saying is “do you know what your product or service are worth in the marketplace”. By shortening it we imply some disturbing things. The first, incorrect implication: your personal worth has something to do with the price of your service or product. Mark Silva, a Sufi master who teaches business, brought this to my awareness. As a human being, your worth is immeasurable. There is simply no price we could put on it. So I don’t say “know your value”—I say “always know how valuable you really are.”
The second incorrect implication, is that there is some kind of fixed answer about this. Oh, now I know the value of my product. The truth is that this is a mutable, changing thing that depends on a number of factors. This is why one pair of jeans costs $49 and another $250.
In reality, pricing is not about worth or value of you or your product. We use those words imprecisely. Here are some helpful reframes:
- NOT: “what’s that worth?” IS: “what will someone pay for that?”
- NOT: “what’s the value of this?” IS: “what’s the amount we can price this?”
- NOT: “I wonder what I’m worth?” IS: “I wonder how much the market will pay for my product or service?”
- NOT: “what’s my value?” IS: “what contribution can I make?”
Get comfortable with pricing
Pricing does have to do with both comfort and confidence, however. How much comfort and confidence? With comfort, you only need enough ease to actually say it to another person. Not comfort like sitting on your couch watching a movie! By confidence I mean you can utter the phrase “I’ll try sharing these prices”. You don’t have to have rock star on a stage confidence. I see too many entrepreneurs wanting to wait until they feel totally comfortable or confident before they begin selling. But guess where comfort and confidence come from? From doing it repeatedly.
Here are three areas where you have to have some basic comfort and confidence in your pricing:
- the price you set
- asking clients for that amount
- receiving & managing that amount
Which one is more difficult for you? Even if you are a veteran sales person, you may have some twinge on one of these when you consider raising your prices. If you said number one, see the next section. If you’re a two, you’ll have to practice! Get a coach, read a book like Feel the Fear and Do It Anyway, or do practice role plays with people until you can brave it to ask a potential client. Then ask 10 more. Or lower the amount you’re charging to a place where you can start asking. Find a strategy that lets you get started. Your mantra is I’ll feel better about this when I’ve done it 10 times.
For the threes, this too takes practice. If you have difficulty with receiving, then try heart centered meditations that focus on opening your heart and letting in love. Practice receiving other things everyday: a compliment, someone’s help, a gift, or whatever is being offered to you. Women can especially have a hard time with this. If your difficulty lies in managing it, then put aside time each week in your schedule to learn money management practices. It could be QuickBooks or some other management tool. Read about managing your business finances or take a class. This is a learnable skill. Or get a bookkeeper and go through the effort to set them up and learn what reports you need to review with them.
How do you set it?
You could consider hiring a coach like myself, or a business coach or a consultant in your industry. This is best if you don’t have the time or want the expert guidance. I’m a big fan of getting lots of support in your business so you can focus on doing what you do best, whatever that is. I’m pretty sure it’s not pricing. But if you are going to figure it out yourself, here are the factors you’ll want to consider:
- what your experience is: first couple years, then 10 yr. mark, then 20 yr.
- the confidence you have in asking
- your costs to provide the service or product (fixed and variable)
- the profitability you need
- the benefits clients receive (not what you do)
- amounts clients are willing to pay for those benefits
- what your competition charges
It’s not a specific formula. You look into all of those areas and then make some intelligent guesses about your pricing. And then you experiment. Experiment with your comfort & confidence. Experiment with different approaches with different clients. Believe me, the market will give you feedback. So be flexible, listen to market feedback and willing to adjust in the beginning. Over a number of months—if you are consistently out selling that is—you will settle into pricing that you feel really good about. A year later, no more, review your pricing looking into same info above or working with someone because the market will have changed and your skillset will be increased. So learn to enjoy the process as it will always be part of being a valuable and worthy entrepreneur.