Understanding Your Value
Last Saturday, I took a jacket to a tailor shop to get it repaired, because the stitching at the end of the sleeve was coming undone. When I got there, the seamstress took one look at it, said “This happens all of the time” and proceeded to repair it in about two minutes (she already had black thread on her machine). When I asked how much it cost, she told me $2. To me, $2 way undervalued the service she provided. If I had tried to repair it myself (and yes, I do know how to use a sewing machine), I would have had a very small chance of making it look as good as she did. The repair was on the elastic of the cuff, so you had to stretch it just right while sewing to make it look good. So, why did she charge me so little? It was probably based on two factors: (1) She only saw it as two minutes of work, so she made good money by charging me $2 for two minutes of her time. (2) She undervalues her skills because they come so easily to her. This is a common problem for service providers. What people value most in what we provide is typically the thing that comes easiest to us – our natural talent. I have been guilty of this as well. A couple of years ago, a colleague with whom I was working on a project told me that I was undercharging for one part of my project. It was the part I found came easily to me and was a lot of fun. Since then, I have doubled the price of that piece and clients happily pay that price and find a lot of value even at the higher price. So how do you know if you are charging enough for your services? There is no easy answer to that question. However, one way that I found seems to work well to at least get in the right ballpark is to talk with others who see the value you provide. This could be colleagues in related fields or a trusted client (who knows you will not raise their fees). Find out what they think others might pay for your services. Of course, you need to be comfortable with the prices you charge. If not, it will quickly come across when you present it to prospects. Just realize that there is a good chance you are undervaluing at least some of the services you offer and getting an outside perspective is one of the easiest ways to realize where that is happening.