What’s a fair price?
On Thursday we talked about what your work is worth. Though we want our work to have some intrinsic value, the truth is that the only one who can tell us the value of our work is the client. The same work could be worth very little to one client, or a whole lot to another client.
This truth leads us to an uncomfortable conclusion, we can’t price projects, we have to price clients.
If an agency were to say, “Our websites cost at least $15,000.” that doesn’t really tell you anything about the website they sell, but it tells you a lot about the customers they are looking for.
Is that fair?
But how can I sell the same work, or very similar projects, to two different customers at two totally different prices? Aren’t I ripping one of them off?
First, let’s observe that this happens all the time.
- Everyone on a commercial airplane paid a different price for their seat. They all get from one place to another in the same amount of time, with the same amount of hassle, but no one feels like they were ripped off or cheated.
- You can buy the same clothes at the mall for full price, or at an outlet store for 50% less.
- The bagel shop on the corner sells their day-old bagels for 50% off – the day-old product didn’t cost any less to make. They actually add labor to bag them up!
“But wait Brad, these aren’t really the same product. The seat prices depend on when and how they are sold, the outlet mall is far away, and the day-old bagels are not as good!”
Right, each of those prices involve trade-offs. And when we let the customer make those trade-offs they value the same work at different amounts. That’s fair!
What trade-offs are your customers making?
When your customer buys a service from you they are purchasing more than the hours you put into doing that thing for them. They are buying…
- … the risk that you won’t deliver, or that you’ll be late.
- … the feeling of hiring an expert – removing their doubts.
- … the privilege of bragging to their friends about their cool marketing partner.
- … (what else can you think of that they are buying?)
It’s fascinating to me how we can get wrapped around our spokes when we start thinking about money, pricing, and value. But more about that in our next conversation!