Last week, I lost a crown on a back tooth.
The replacement cost me 2 hours of time and $1500.
Does that mean my dentist charges $750/hour? NO
And I'm betting the materials cost less than $100, but his accumulated expertise and ongoing education that now enables him to make this replacement in a single visit (it used
to take 2-3 visits) is an investment.
And that crown is going to last from 7-15 years (based on personal experience and online studies.)
What's the real value on that crown and my dentist's time in making that replacement for me?
For me, it's kind of priceless since the alternative is walking around with a gaping hole in my smile (okay, this
was a back tooth, so if I smiled smaller you didn't notice. I'm not good at smiling smaller.)
And if I break it down to a daily price, let's give it 7 years, it's 59 cents a day. Now, it doesn't feel like that because I'm paying it all at once, but $17.61 per month seems reasonable for a happy smile and a healthy mouth.
What you do has a much larger value than just the hour or 10 or even 100
hours you may spend with a client.
For your clients, your work has value for weeks, months, and years to come.
Take a moment, right now, and think about the LONG TAIL value you provide.
(I find the word "long term" a bit boring, so use "long tail.")
I've had two potential clients ask me recently what my rate for coaching
is.
First, I don't have an hourly rate because the value delivered far exceeds the parameters of a mere hour. The value has a long tail.
I work in packages, and I want you to do the same.
In addition, I don't quote someone unless I know they are a good fit for my programs, style, and expertise, and I need to understand clearly their vision and
goals.
If you are shopping for a coach, a dentist, a doctor, a designer, an accountant or any other professional service provider, are you shopping by rate?
That makes you Walmart shopping because you are basing your decision on price instead of value.
I learned a long time ago that I'd rather invest more at the start for the best provider
for me than have to pay more in the long run because I cut corners or got who I could afford, not the best fit.
It's kind of fascinating because for me (and this may not be you) when I invested $500/session with a particular coach many years ago, I made zero progress.
I don't blame that coach, but I didn't have nearly enough at stake. The investment wasn't high enough to indicate a value I truly
cared about.
On the other hand when I invested $16K/6months (not per session, no hourly break down), you better believe that I kicked it into high gear and made some quantum leaps. I understood the value clearly and wanted to wring every ounce of return from it.
I could price shop for a dentist that might charge less, but the trust I have in mine is priceless and the knowledge that what I'm
getting has an incredible long tail value is totally worth the investment.
BEFORE YOU QUOTE a client, think about the long tail value you are delivering and stop limiting yourself with an inadequate hourly rate and quote a package that delivers on the big promise they are looking for.
BEFORE YOU BUY from anyone, think about the long tail value you are getting and stop price shopping and become a
VALUE BUYER.
Oh, and if you are familiar with the term VALUE BASED PRICING. I've just given you a foundation for it. And in my interior design work, I don't charge hourly, but instead use a value based formula.
When you apply VALUE BASED PRICING to your business, you'll make more, in less time, and be positioned as a source of value instead of as an expense, vast
difference.
Before are able to change your rates and how you charge, you've got to shift your mindset and how you buy. Go for it!
Mega Hugs,
Melissa
PS. I actually prefer to create VALUE BASED INVESTMENTS instead of pricing because everything you do has a BIG ROI (Return on Invesment).
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