Nature vs. Nurture. Tomato vs. Tomatoe. Evolution vs. Creationism. Rifles vs. Hugs. Republican vs. Democrat.
Pick a subject, any subject, throw it out in the middle of a conversation and, lord knows, if there’s folks there with a pulse, an interesting dialogue will ensue as the attendees happily (or angrily) take a stand for their beliefs.
One of the most highly-debated business discussions revolves around ‘hours for dollars’ vs. ‘dollars for expertise’.
‘Hours for dollars’ being 60 minutes, a multiple or fraction thereof, and a perceived
maximum price that anyone in their right mind should pay for someone to devote to them (as a coach, counselor, consultant, tradesman, etc.) over that period of time.
’Dollars for expertise’ being the value of the knowledge and/or ability one brings to the table and how much she who has achieved Unconscious Competence* in this area of focus chooses to charge for someone to gain access to their expertise.
Masters of their craft will argue that their level of compensation lies, not within the amount of time spent helping someone achieve their desired objective but, instead, in the value of the years invested that it required for them to attain such mastery.
Buyers, on the other hand, will argue that one’s price must be on par with comparable market rates and, if someone’s stated compensation is outside of customary ‘norms’, the buyer will likely choose to hire a competitor whose rates are lower to complete the task at hand.
It’s an interesting discussion that has no shortage of opinions.
While there are no right or wrong answers, at the end of the day, the buyer reserves the right to choose with whom she’d like to work.
And you, as the seller, have the same rights. Consider the following example…
Legend has it that Pablo Picasso was sketching in the park when a bold woman approached him. “It’s you — Picasso, the great artist! Oh, you must sketch my portrait! I insist.”
So Picasso agreed to sketch her. After studying her for a moment, he used a single pencil stroke to create her portrait. He handed the women his work of art. “It’s perfect!” she gushed. “You managed to capture my essence with one stroke, in one moment. Thank you! How much do I owe you?”
“Five thousand dollars,” the artist replied. “B-b-but, what?” the woman sputtered. “How could you want so much money for this picture? It only took you a second to draw it!”
To which Picasso responded, “Madame, it took me my entire life.”
(The untold part of the story is that Picasso then took back the sketch, spit on it, stomped on it, lit a match and burned it as he scowled at the woman and, in his best French accent, told her to ‘piss off’ and returned to finishing the masterpiece he was working on. Now, mind you, I have no proof that this untold ending is true, but it’s fun for me to create undebatable scenarios.)
So, would you have paid Picasso $5,000 for the sketch? Perhaps yes, perhaps no. One thing is certain, however, Picasso earned the right to charge whatever he’d like… and, droves of people were willing to pay him at his desired level of compensation.
Far too often, business owners spend waaaaaaay too much time focusing on what their competition is up to and what they charge for, what might be perceived as, similar services.
Fact is, there will ALWAYS be competition.
Some will have higher-priced offerings and provide shit service. While others will have
lower-priced offerings and provide outstanding service.
And, you can’t do anything about either.
Your goal is to stop competing in commodity-driven circles, gain clarity on one specific subset of the population you’re most compelled to serve, and then serve them with strategic abandon.
Ultimately, your objective is to become the go-to person in your well-earned area of expertise and have those who need you most banging down your door for you to help them… and then name your price to do so.
You’ll never win the ‘dollars-for-hours’ game, nor should you try.
The inevitable result of attempting to do so is non-existent margins, over-worked employees and a downward spiral of morale that inevitably leads straight towards bankruptcy.
So what can you do?
Add value to the lives of your clients… significant value… and recognize that you are the solution to their problem. They are literally praying for you to show up in their life.
When someone is facing a wall and has no way around it, they would pay (almost) anything for someone with a bulldozer to obliterate the obstacle that stands before them.
And, while you should always have awareness as to what your competition is doing, pay it minimal attention because what they’re up to truly has ZERO bearing on the impact you’ll have on those who need you most.
Your goal must be to answer this one, incredibly crucial question… “Who are YOUR people?”
When the answer is clear, you’ll inevitably focus on those you’re most compelled to serve.
And, when you combine this knowledge with Picasso’s confidence to ask for $5,000 for a minute’s work, they’ll inevitably pay you what you know you are worth.
Time to raise your rates.
*Unconscious Competence represents the 4th Stage of Learning in Dr. Thomas Gordon’s Conscious Competence Learning Stages Model. To learn more about this model and how you can apply it to your life, pick up a free copy of my New York Times bestselling book, What Is Your WHAT? Discover The ONE Amazing Thing You Were Born To Do, at
www.WhatIsYourWhat.com/free. I devote several chapters (and exercises) to this incredibly powerful resource.