A couple of weeks ago I wrote about pricing your creative services. In it, I talked a lot about worth and value, and not being greedy about charging for your creative work.
Ever been told ‘charge what you’re worth?’ Of course you have. And have you then thought, ‘but how the hell should I know?’
I have a problem with the idea of linking ‘worth’ and ‘charging’, mostly because there’s a lot more to our worth (if we’re talking self-worth, which if we’re small business owners we generally, if unintentionally, are) than what we charge. It’s also a very one-sided way of looking at our ‘value’, which doesn’t take into account one big factor: what the customers think.
So I think the advice really should be ‘charge for the true value of the improvement you make to customers’ lives’, but that’s not a very concise little soundbite.
Customers are really the ones who get to decide what you’re worth.
The problem with thinking in terms of what you’re worth is that you’re not what customers are buying. Sure, there’s crossover if you’re the face of your business, but even then they’re only buying an element. Take me: people aren’t looking at me, they’re looking at what I have to say about business and coaching and how I can help them, but they’re only peripherally interested in the other things that make me me. What they’re really interested in is the good things that will happen to them and their business by working with me.
So think in terms of what you do for them. What do they need, really need? What do they expect from your product or service? What problems does it solve for them? A copywriter can help them make more money by persuading people to buy. A designer can help connect with their target audience. A jeweller can create pieces that permanently tether them to the most special times in their life.
How you pitch yourself, your customer experience, your process, and your social proof (testimonials, reviews, etc.) all show them things about you and the value they expect to receive.
Do you feel like your pricing is in line with that? If not, maybe it’s worth considering changing your branding and marketing, or maybe upskilling to offer something new. And if not, are you looking in the right place for your market? Maybe you need to be somewhere else for them to find you.
‘Charging what you’re worth’ isn’t very measurable
In business, you want to be able to measure almost everything. Profit margins. Inventory. ROI. Profit and loss. You get the picture.
Your value should be measurable too – but you’re not necessarily the one to decide it.
You see, if our self-confidence is low – maybe we’re new to business, or we’re a bit stuck doing things we ‘should’ do rather than what we want to do, or we’re in a new field, or we’re self-taught, or one of the million other reasons we don’t feel great about ourselves – we’re highly liable to undercharge. We’re not good judges of our ‘worth’ when we’re down on ourselves. Conversely, if we’re overconfident – we’re learning something new and haven’t reached the ‘conscious incompetence’ stage yet, or someone’s inflated our sense of our knowledge, or we’ve leapt into something exciting without full consideration – we’re liable to overcharge. Either way, it can be inaccurate and not necessarily fair to either party.
So, instead, do the maths (sorry). How much do you need to make for yourself? How much does your business need to make, taking into account things like professional development and ongoing costs? How much capacity do you have? How much time do you want to take off each year? Run those numbers, and you’ve got a starting point that you can then put into the context of your market.
‘Charge what you’re worth’ sows seeds of comparisonitis
I’ve written a longer post about comparisonitis already. If we pay too close attention to what other people – usually our competitors – are up to, it can sap our motivation and leaving us feeling not up to snuff.
Yes, you need an idea of the market. It’s easier to set your fees if you’ve got at least some idea of a range, but these days that can basically be anything. At one end of the market there’s Fiverr, at the other there are people in highly specialised industries that are awash in VC money.
So it’s better to charge based on what YOU need to earn, to be comfortable and live the life you want. If you charge as much as you can just to get to six figures or whatever, it puts too much emphasis on the money side of your ‘worth’. That’s totally fine if you want to make that your goal – it’s your business, so you get to decide! – but, otherwise, think about all the things that you want to do that the money you make can support. You might need more, you might need less – but it’s up to you to decide how much money will get you a life that’s actually fulfilling.
Charging your worth is a process
All that said, there are things your customers will place value on, some of which are more measurable than others. Before you pull a figure out of the air, consider:
- Your work history and experience, and how that relates to your current business
- Your qualifications and/or training
- Your life experience (don’t discount this)
- The services you offer that others don’t
- Your reputation in the industry
- The way you, and only you, can present yourself
All this takes time for you to build up and understand. It’s fine to stretch a bit with your pricing, but not so much that you’re wildly uncomfortable with what you’re asking. People can tell, and even if they say yes you’ll feel immense pressure to measure up.
Your value will change over time
That’s why it’s a process. Everything changes over time! As your business grows and unfolds, you’ll build experience and skills, a reputation in a certain market, maybe move in different directions with different customers. All that’s going to change what you’re worth in terms of your pricing.
So when you’re thinking ‘how the hell do I charge what I’m worth?’ think about the work you do in the world, why you do it, and what you can truly do for your clients.
What you’re really trying to do is communicate the value you offer with your business. And when you can nail that, you’ll find that the more customers who say ‘yes’, the more your confidence in charging what you’re worth will grow.