What are you worth?

Understanding your value.

There is a famous story about a ship whose engine fails and after trying multiple people to fix it, the owner goes to an expert in ship engines who has been in the industry for years and years. The guy pulls out a hammer, lightly taps the engine and it comes to life. He sends them a bill for $10,000 dollars and they fall off their chairs. Exclaiming that the man hardly did anything, they ask him for an itemised bill. When it turns up it shows $2 for tapping with the hammer and $9,998 for knowing where to tap. :)

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As we start to transition my role from the day to day running’s of the business and Rob takes over the mantle, one of the areas we’ve highlighted for me to remain in touch with is mentorship/support and coaching for the team. I’ve been around for 21 years doing this job and done almost everything in the business at some point (not well I should say). Through this experience I do have a pretty good idea of what it takes, what works and what doesn’t. I’m very glad to say that everyone in the team these days does a far far better job of any of those tasks than I do. :)

Yesterday Becky reached out and asked if she should post this article on LinkedIn. It’s about Pricing and not being chosen when you’re not the cheapest. I was keen to know what her network would say and I thought it was a well written post so I encouraged her. She received lots of great comments and suggestions and no doubt picked up a few ideas along the way.

She and I then had a really good chat later in the day. As I walked Freddie (our Black Lab), we talked for over an hour on the subject and I shared some of my own views.

If you’ve not read the post it’s short version is this: what do you do when you tell someone you’re going to be a certain price upfront, therefore qualifying them correctly, they tell you that’s fine and then they choose someone cheaper in the end? I’ve paraphrased slightly so its better you read her original post.

I remembered back to my days on Sandler Sales Training and what my mentor, (still to this day) Andy would say. Firstly he’d tell me that its completely my fault (he didn’t pull any punches). I’ve done a poor job of ensuring they see the value in us. That they are essentially seeing us a product and comparing one with another. He had a good way of making me realise my failings but also making me want to improve. So Becky and I talked quite a bit about our value proposition (I have a slight issue with that phrase as ‘business jargon’ but I’ll go on). Essentially our job is to make sure people know why we’re more expensive than others. They are not buying the thing we make, they are buying the people and expertise who make it.  

When it comes to a market like ours (Web and Digital Marketing) there are no barriers to entry so anyone can start up in their bedroom – its how we began. This means that for every contract we compete for, we’ll be in the mix with one-man bands, companies our own size and sometimes much bigger agencies. We won’t be the cheapest but we probably won’t be the most expensive either. The problem is, sometimes its too easy to assume that others will understand why that’s the case. There in lies the problem – “assuming”. An old friend of mine took great pleasure in always telling me that to assume makes an ass out of u and me.

So we talked about the ways we can ensure people understand where we bring that extra value to a website project;

·      We assemble a crack project team for your website – this isn’t just one or two people designing your site.

·      Individual experts have years of experience in their field (some as much as 20 years). This isn’t a generalist who knows how to setup a wordpress theme.  

·      Within that team you’ve got UX / Design experts who know how to make sites perform and drive enquires. Or maybe you’re not worried about that? ;)

·      We’ve got developers and platforms that are slick, fast and upto the very latest standards, you’re not being built on the cheapest platform out there to keep costs down.

·      We employ a full-time project manager to run your project – most smaller agencies don’t have this and the projects go awry all the time (believe me I remember those days and don’t look back fondly on them)!

·      We’ve been around 20 years and aren’t planning on going anywhere. Smaller companies are potentially more likely to go bust or shut up shop if they can’t make a go of it. Do you want to take that risk for a cheaper product?

There were more than this but you get the picture.

We finished by talking about being more open and transparent around the pricing up front. I suggested being frank and telling the prospect that they will get a cheaper quote and that you want to know what will happen if they do. Tell them you want the opportunity to explain a bit about why we cost what we do and what that extra value brings. We also agreed that unless someone can see us and allow us to walk through proposals with them, we would question whether to get involved in those arm’s length tenders at all.

Too many people shy away from talking money upfront when its absolutely vital to do so. It will save you time and effort in the long run.

I’d love to hear your thoughts on this topic or just about money in general. Let’s break down the stigma around it and just be transparent. :)