Yesterday I wrote a few thoughts, or more reflections on my confusion about pricing services properly. Let’s see where we get to today.
There is this thing about pricing something one creates that has to do with value. Money is our way of expressing value, one way at least, and a rather awkward one I think, but it is the most common way to decide something’s value.
So if I create something, how much is that worth?
I know quite a few people, often at the beginning of their creative (as in to create) career who will price their products very low. Because, at least subconsciously, it’s not that good, or who would buy it otherwise or how would that make me look?
Just the other day I had this conversation on diminishing phrases, especially in writing. “This seems a little bit important me” “I somehow think we should do this” – do you recognize this habit of saying or writing something, then getting afraid of how it might be perceived and trying to soften it? Unfortunately, this way we obscure the initial meaning of the phrase. Either this is important or not, not a little bit.
It reminds me of the way we beginners in pricing put a price tag on our creations. … “I made this, and I believe it’s quite something, which is why I’m offering it. Here, this price tag reflects the value I give it. This way you too will know how highly I value this.”
Then there is the “pain-makeup”. Somehow one aspect of price calculation often seems to be how much it cost me. How many hours did I have to invest? How physically or mentally hard was this to create? Did I enjoy it or not?
Problem with this is, what about the stuff you love doing and you want to get paid for? If the amount of pain you had to endure is an indicator for the price of your final product, you might never ask for any money for something you enjoyed creating.
And how often have I heard this phrase: “No no, I loved doing that, I couldn’t accept money for that.”
Well, why not?! You loved doing that, if you were paid for it, you could keep on doing something you love while not having to worry and you could make other people happy with your work. “No no, I loved doing that, of course I charge for it!”
So if we decide that we are going to charge and also know that it can be a good price, we still don’t know how to determine how much it is actually worth.
For me something might be worth a lot, but in the economy I’m in, people don’t have that money. Or, I value it a lot, but it is not usual for people to pay for this product (say, education).
Or the other way around, I love it, it’s a great product, I’m absolutely willing to pay and the price is way too low (fruit juices in South America).
I’m really not sure there. My approach is to actually enter into a conversation with the customer at that point and work it out together. I like it, because it makes us treat the issue and we have to think about the value we give what we have there – but, for many money is an uncomfortable topic. To make it even more uncomfortable might not be the wisest choice if you want to convince that customer.
Enric suggested this in the comments of the first text: “A part from other deep market rules, my xp with the price of anything is based on the confluence of 2 factors: how much do I WANT to get for my work and how much they WANT to pay me. ¿Easy?”
I’d leave it there for now, curious about more thoughts.