Today I read a great excerpt in Robert Glazer’s Friday Forward (one of my favorite newsletters). Quoting from Robert directly:
There is a famous fable about Pablo Picasso that goes something like this.
One evening, while enjoying a meal at a restaurant, Picasso—the world’s most influential artist at the time—was interrupted by an admirer. The fan handed Picasso a napkin and said, “could you sketch something for me? I’ll pay you for it. Name your price.”
Picasso took a charcoal pencil from his pocket and swiftly drew a sketch of a goat. As the fan reached out to collect the napkin, Picasso withheld it. “You owe me $100,000,” he said.
The man was outraged. “$100,000? Why? That took you no more than 30 seconds to draw!”
Picasso crumpled up the napkin and stuffed it into his jacket pocket. “You are wrong,” he said. “It took me 40 years.”
Something I talk about a lot with agency owners, especially marketers-turned-agency-owners, is sales and the concept of pricing the worth of your work and not your time.
As I tell them, time is finite but worth is infinite. You can’t work more hours than you have in a day (and if you’re not charging enough then you can’t hire more people to grow the number of hours that can be worked), but you can provide more value (eg, worth).
As I say in the bonus Pricing module of the Credo Agency Accelerator Course, your work is worth more to some people than others.
If you’re an ecommerce growth expert and know that the company could make tens of millions of dollars off your work, why would you charge them the same rate as a company that might only make $10k off your work?
Conversely, if you’re new to a niche (like ecommerce) and learning, why would you be able to charge them what the foremost ecommerce expert can charge?
Pricing should be fluid based on the value you’re providing and the value they perceive you to be providing.
Once you have that mindset, then your challenge becomes showing them the value you can and are bringing them.
After all, they’re probably not paying you to learn.
They’re paying you for the experience that others paid you to get.