The key to charging what you’re really worth
Business strategist Andrew Griffiths delves into the reasons why business owners fail to charge what their products or services are really worth. Over many years of working with businesses around the world, I’ve come across a constant issue that feels like it’s getting worse not better. This is businesses that don’t charge what they are […]
Business strategist Andrew Griffiths delves into the reasons why business owners fail to charge what their products or services are really worth.
Over many years of working with businesses around the world, I’ve come across a constant issue that feels like it’s getting worse not better. This is businesses that don’t charge what they are truly worth.
I’ve met so many business owners who are extraordinary at what they do, they work incredibly hard, they over-deliver in every way, yet their businesses struggle to make a profit, regardless of how busy they are. Their life is one long struggle, they are tired, burned out and generally fried. So much could be alleviated if they simply started to charge what they are worth. So why don’t they?
Why don’t business owners charge what they are worth?
In many instances it’s because they are working to a bad model. This is the price driven, “be the cheapest” strategy. To me this is a terrible strategy, that I’m loathe to even call a strategy, because it simply shows a lack of creativity. Businesses that are the cheapest might attract customers, but they attract totally price-driven customers, who have little-to-no loyalty, who have cheap friends, all of whom will move on when the next cheaper competitor comes along.
And even more challenging, price driven businesses struggle to build any kind of financial resilience, meaning that the minute times get tough, they fall over.
So whilst it might be a broken model for some, for others, it’s more personal. It can come down to self worth and not appreciating the value that they actually bring to their customers. For others it’s a general limiting belief about what they think their customers are prepared to pay. Sometimes it’s the story we tell ourselves about the market and the current economic conditions.
Generally these reasons are not based on reality, they are based on perception, emotion and limiting beliefs coming through. But if we’ve had these thoughts and feelings for a long time, it can be very hard to change them.
Understanding that the world has changed
If you feel that you undercharge for what it is that you do in your business, where do you start when it comes to shifting that stuck feeling? Well, first and foremost we need to understand that the world has changed. Potential customers can find us much more easily these days. In fact, people are prepared to track down the right business and they are prepared to pay accordingly. Why? Because we are increasingly living in a value-driven world as opposed to a price-driven world. We’ve all made cheap purchases of products or services and been let down. Now more than ever, we know we get what we pay for. People are prepared to pay for value. If your business can deliver more than your competitors, the right customers will find you.
I make the statement ‘someone has to be the most expensive, why not make it you? But if you’re going to be the most expensive, you have to be the best.’ From my experience, the better you are, the more people are prepared to pay, the more loyal they become and the more likely they are to tell their value-driven friends about your business.
This is happening everywhere
The trend I’m starting to see is exactly this. Business owners who are niching down, doing one thing and doing it amazingly well, from making cheese to opening boutique holiday houses. They are focusing on what makes them unique, looking for ways to deliver exceptional value, marketing themselves through powerful storytelling and getting their loyal and devoted customers to share their experiences.
So what is the key to charging what you are worth?
You can’t charge the most and deliver the least. Some businesses can overcharge and underdeliver, but they rarely last. To me the real key to charging what you are worth is to be committed to becoming the absolute best at what you do. Being the best covers a lot of ground. It’s not just the product or service we sell, but of course that’s a huge part. It’s being the best in every aspect of our business. The better we can be in as many parts of our business as possible, the more we can charge.
I understand that I’ve made this sound simple, and of course it’s a process. You can’t just double your rates tomorrow without losing a pile of your existing customers. The unfortunate reality is that you probably need to lose those price -riven customers to make way for ones that are prepared to pay you for what it is you do.
To change any mindset takes time, but generally the time and effort are worth it. I’ve worked with so many business owners who have transformed themselves by simply valuing what they do. This is the start of a process but one with such a great reward, one that is far more impacting than simply having more money in the bank – although that’s not a bad outcome.
Andrew Griffiths (pictured) is Australia’s #1 small business author, with 14 book titles sold in over 65 countries globally. His latest book “Someone has to be the most expensive why not make it you?” (Publish Central) has just been released. Find out more at www.andrewgriffiths.com