Price Is What You Pay, Value Is What You GetOct 01, 2023
By Tricia Scott
Today, I want to share a little story with you, so settle in with a blanket and your favourite hot drink (pumpkin spice, perhaps? 🍁).
This story resonated with me because I hear similar tales in our Community and with the clients I work with 1:1. You may even recognise yourself in the following...
A freight ship breaks down while in port; the engine won't run.The owner calls in several top experts, but none of them can get the engine running. Nearing the end of his rope and with time running out, he calls in another expert, and when he turns up, he's much older than the previous experts. He's so old, in fact, that he's stooped over a little.
The shipowner guides the man to the engine room. Putting down his toolbox and opening it up, the man pulls out a stethoscope, making the shipowner wince. He's seen experts come in with all kinds of technology and spend hours trying to fix things with no luck, and this guy is using a stethoscope!
The man gently places the stethoscope on one pipe and listens...Then he shuffles over to another pipe and listens, then another...After about five minutes of this, the shipowner is getting frustrated.But then the man walks over to his toolbox, pulls out a hammer, walks over to a pipe he was just listening to, and gives it four taps with the hammer. "All fixed!" he says.
That can't be!
"Fire her up, you'll see the engine works fine now," the man says with a grin. The shipowner gets on his radio, makes a few commands, and then vroooommm, the engine starts. He is absolutely over the moon! "You are a genius!" he says. "How much do I owe you?". "
That'll be five thousand pounds please" the man replies. "Wow! That seems a lot for five minutes of work. Can you give me a breakdown of that cost"? "Sure! Callout charge fifty pounds. Knowing where to tap to get your engine started again - four thousand, nine hundred and fifty pounds".
The story's point is that many of us are used to being paid for our time. This is especially true if we work freelance or are used to charging an hourly rate. The man knew that the value he provided far outweighed the time he would spend fixing the problem, and he charged (and was paid) accordingly.
The problem with taking the cost-per-hour model into your business is that what we do is often worth more than the price-per-hour tag we attach to our services. This is especially true in creative industries and coaching businesses.
Think of it like this; How much would it cost your client to stay stuck with their problem? What would be the emotional, physical, and mental costs of never achieving what they wanted? What would it be if they had to put an actual price on it? Probably a lot more than your current hourly rate!
When someone hires you, no matter the nature of the business, they aren't just paying for the end product. They're paying for your expertise, time spent learning, and your investment in your craft. You must consider all of these things when you put value on your work because what you're really doing is helping your client avoid some sort of pain. After all, if they could do it for themselves, they wouldn't be coming to you for your help.
So the next time you're asked to put together a price for your work, remember this little story and ask yourself, what would it cost them to stay stuck with this problem, and then you'll start to see the real value in what you do, just like the man on the ship.
Remember, the price is what you pay. Value is what you get.
I believe in you (always),
👉 This affirmation was taken from a series I share every Monday with our Hello CEO mailing list. If you want to join in, head to the homepage and sign up!
Tricia Scott is a passionate startup business mentor and the Founder and Editor of The Female CEO - Create Evolve Overcome, a platform and digital magazine holding the space to showcase female entrepreneurs from all over the world.
The Female CEO is gaining global recognition daily and Tricia is able to bring her own level of expertise as a start-up mentor and multi-company director to her very exclusive table along with her team of brilliant Guest Editors and Contributors. You'll usually find her with her MacBook in one hand and a coffee or a glass of something fizzy in the other Reach out anytime!
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