Stop selling by the hour - Start selling by the value created
I had some design work done this week.
Design work which in my mind was to be a customized solution and not some commoditized product solution purchased from a faceless designer working via an online marketplace.
True, it was a simple project, and I provided clear direction from the start.
I knew what I was using for inspiration and what the end state should be.
I gave crisp examples to inspire the final design outcome.
After being presented with design options, I asked the graphic designer how he wanted to be compensated.
He replied with: "Well, it didn't take me that long so...."
Before he could give me his price, I called a timeout and said: "Come on!"
I said come on because he wasn't valuing the efficiency and ease at which he could craft this design project.
He wasn't valuing his years of undergraduate and graduate graphic design studies.
He wasn't valuing his years of experience working with big and small clients in various sectors.
He wasn't valuing his expertise of pattern matching, seeing this design need before, and the hours he has spent being observant of trends on the streets and in pop culture.
He wasn't valuing the fact that this project didn't take him all that long because he has many years of higher education, many years of professional experience, and many years of observing design trends.
The task was simple for him because he possessed all three of these elements - not because the final product was easy to design.
There should be very little correlation between what we get paid and the amount of time we put in.
Pricing should be all about outputs and accomplishments.
As entrepreneurs and thought leaders, most of us have three things that we can sell, often mirroring the three main stages of business: starting, existing, and thriving.
At the beginning of the business, most of us due to lack of confidence or smarts, start by selling time. We sell the inputs of time and materials.
To reach the next business level of existing, we start selling outputs of deliverables. So instead of charging based on our time, we charge based on the market value of something and begin to command a premium. We trade a price premium for price certainty because we are selling deliverables.
At the third and thriving level of business, when we let go of both of those things, we sell based on the value created.
At the top-tier of a thriving business, you need to develop revenue and not sales. You are focused on adding value for clients - be it securing gains or cost reductions or other emotional forms of value that your expert solution will deliver.
To arrive at the third stage of business, your pricing needs to untethered from the inputs of time and materials.
As you soon as you can move to the third stage you will have a thriving business.
You will move from selling inputs, to next, selling outputs, to finally selling outcomes or value based on, your education, your experience, your expertise, and your efficiency.
Your million dollar solution may only take a minute to formulate just because you chose to secure many years of education, many years of experience, many years of expertise to be so darn efficient.
-Marc A. Ross | Caracal Global Founder + TLC
Stop selling by the hour - Start selling by the value created
