The Issue With Billing For Value or Charging What Your Worth
"Billing for value" or "Charging what your worth" is being heavily pitched.
I keep seeing this and you likely do as well.
It is really being hammered by everyone selling coaching.
It is also being given as advice by some that feel bad for guys and gals
that undervalue themselves..
Is this a bad thing? Not really...
Much of it is well meaning
but how it is being interpreted and implemented is causing heartache for many.
Mostly because they are ignoring reality and misunderstanding a few things.
Let me use an absurd example to drive the point home.
My cell phone company charges me $55 a month for my plan.
With this plan what can I do?
- I could call 911 if someone was trying to kill me...
- I could receive a call from my children if they were in distress...
- I could call a tow truck if I was stranded on a cold lonely highway...
Under those circumstances my phone plan has enormous value.
Should my cell phone company then bill me for value?
What is having your life saved calling 911 worth?
Should I send the cell phone company a check for 10k this month?
Imagine a sales rep on the phone with me saying
"Peter, what is being able to call 911 worth to you?"
and trying to justify price on that?
So what's my point?
It is that you cannot ignore market reality.
Basing your sales pitch on unending questions about "what would it be worth to you if..."
is not the best use of your time without some other things being considered.
Not only is it not the best use of your time it will only get less effective as time passes.
Thanks to all the coaching courses teaching this pitch of "what would it be worth to you if..."
there are very few business owners that have not heard it twice this week.
In automated webinars it is one of the highest points of people bailing out...
Am I saying you cannot bill for value? Yes you can
BUT
that value is NOT what YOU place on it
it is what the prospect places on it...
It does not matter if a service will make someone 10,000 dollars net.
It matters what value the prospect places on making 10,000 net
and what he is willing to give up to do it.
Maybe his wife has cancer and he would value free time over more business.
Given these facts what is your best course of action to get higher prices?
Narrow your pitch to people who place high value on the outcome of your offer..
You have heard this expressed in different ways but maybe it did not click.
Things like "previous buying habits dictate future buying habits" are very true
because they provide an indication into what someone values.
It's not 100 percent accurate since peoples live change but it helps.
For example:
A guy that regularly drops 10k on coaching is doing it
because he values it for some reason.
It might not even be based on results or why you think he values it.
He may just like to brag to his friends about how he just attended that expensive course in Vegas...
In short, you cannot ignore market reality nor will any prospect assign value to your offer based on what you think of it.
Also the same prospect that sees no value in your offer today might do
anything to have it tomorrow based on his circumstances.
P.S
When I say you cannot ignore market reality I do NOT mean that if you see hundreds of providers selling web sites for $100 that you should sell them for $100 BECAUSE the market reality is that most real businesses spend much much more on a web site.
The market reality is most low-ball offers you see actually do not sell any better than mid to high end offers, you just see them more. Real businesses have no issue spending decent sums on coaching, products and services.
I keep seeing this and you likely do as well.
It is really being hammered by everyone selling coaching.
It is also being given as advice by some that feel bad for guys and gals
that undervalue themselves..
Is this a bad thing? Not really...
Much of it is well meaning
but how it is being interpreted and implemented is causing heartache for many.
Mostly because they are ignoring reality and misunderstanding a few things.
Let me use an absurd example to drive the point home.
My cell phone company charges me $55 a month for my plan.
With this plan what can I do?
- I could call 911 if someone was trying to kill me...
- I could receive a call from my children if they were in distress...
- I could call a tow truck if I was stranded on a cold lonely highway...
Under those circumstances my phone plan has enormous value.
Should my cell phone company then bill me for value?
What is having your life saved calling 911 worth?
Should I send the cell phone company a check for 10k this month?
Imagine a sales rep on the phone with me saying
"Peter, what is being able to call 911 worth to you?"
and trying to justify price on that?
So what's my point?
It is that you cannot ignore market reality.
Basing your sales pitch on unending questions about "what would it be worth to you if..."
is not the best use of your time without some other things being considered.
Not only is it not the best use of your time it will only get less effective as time passes.
Thanks to all the coaching courses teaching this pitch of "what would it be worth to you if..."
there are very few business owners that have not heard it twice this week.
In automated webinars it is one of the highest points of people bailing out...
Am I saying you cannot bill for value? Yes you can
BUT
that value is NOT what YOU place on it
it is what the prospect places on it...
It does not matter if a service will make someone 10,000 dollars net.
It matters what value the prospect places on making 10,000 net
and what he is willing to give up to do it.
Maybe his wife has cancer and he would value free time over more business.
Given these facts what is your best course of action to get higher prices?
Narrow your pitch to people who place high value on the outcome of your offer..
You have heard this expressed in different ways but maybe it did not click.
Things like "previous buying habits dictate future buying habits" are very true
because they provide an indication into what someone values.
It's not 100 percent accurate since peoples live change but it helps.
For example:
A guy that regularly drops 10k on coaching is doing it
because he values it for some reason.
It might not even be based on results or why you think he values it.
He may just like to brag to his friends about how he just attended that expensive course in Vegas...
In short, you cannot ignore market reality nor will any prospect assign value to your offer based on what you think of it.
Also the same prospect that sees no value in your offer today might do
anything to have it tomorrow based on his circumstances.
P.S
When I say you cannot ignore market reality I do NOT mean that if you see hundreds of providers selling web sites for $100 that you should sell them for $100 BECAUSE the market reality is that most real businesses spend much much more on a web site.
The market reality is most low-ball offers you see actually do not sell any better than mid to high end offers, you just see them more. Real businesses have no issue spending decent sums on coaching, products and services.
“Do not seek to follow in the footsteps of the wise; seek what they sought.†- Matsuo Basho