October 19, 2006

He said, “I Charge a Lot!” Calculate and Communicate Value, Not Price

ME Liz Strauss wrote this at 2:21 pm

Not Writing, But Communication

Personal Branding logo

A friend called with regards from an old boss she had just seen at a trade show. She shared this bit of conversation she had with him.

“So I asked Frank, are you getting as much work as you want.”

Frank answered, “Just a little less, but I charge a LOT. That way I know the folks I work with want to work with me.”

That was Frank. In one fell swoop, he made sure his clients valued him — not his price.

But I need the money. Frank doesn’t.

How Do Real People Get Respect Like That?


Frank had decades of experience, did well in a buy-out, and didn’t need to work. Most of us aren’t Frank. We need more work, not “just a little less.” Still we don’t need to overcharge to prove our value, and we don’t need to undercut our value to get a client’s work.

We can use Frank’s approach to build relationships on value — not price. We can barter with folks who need to and bill those who don’t. It’s how we calculate and communicate value that counts, not how we collect the price.

How to Calculate the Value

Next time you are pricing a job try this formula:

[(Time to do the work) x (Time it took you to learn to do it) x (Your Personal Proficiency)] + 10% for the problems that you didn’t think of = Value of the Work

The first few times, play with the numbers against what the market considers fair for the type of work you do. Once you have the basics, you can adjust the formula to fit any situation that comes your way. If it’s a client you want to work with or a job that offers something extra offer more value for price. If the client is not so nice or the job is unpleasant make an adjustment for combat pay.

Making value the promise changes the way a client interacts with you and your work and can make the difference between a respectful relationship and one on thin ice. Even when you’re just starting, no matter what the numbers, always be thinking about value not price.

Value yourself, your work, your time and I will too. How could I not?

.
–ME “Liz” Strauss
Liz can help with a problem you’re having with your writing, check out the Work with Liz!! page in the sidebar.

See Brand You on the Successful Series Page.

Share This


Filed under Successful Blog |



C'mon. Let's talk!

12 Comments to “He said, “I Charge a Lot!” Calculate and Communicate Value, Not Price”

  1. October 19th, 2006 at 3:29 pm
    Marti said

    Excellent post! I personally think you are priceless…

  2. October 19th, 2006 at 3:54 pm
    ME Strauss said

    Hi Marti,
    Thanks for the encouragement. He really did say that. What a guy. I sure did love working for him. :)

  3. October 19th, 2006 at 5:21 pm
    ann michael said

    Maybe you weren’t charging HIM enough :-)

  4. October 19th, 2006 at 5:40 pm
    ME Strauss said

    Hi Ann,
    You’re so funny. Actually when I worked for him he did get a pretty good deal, but so did I. He was the best!

  5. October 19th, 2006 at 9:03 pm
    Char said

    Very insightful post. Sometimes it can be such a struggle to come up with the right price - value is a good thing to factor in!

  6. October 19th, 2006 at 9:07 pm
    ME Strauss said

    Hi Char!
    Coming up with the right price for a new client is especially a hard one. I do all of that, then I talk to a friend and argue value propositions with my friend to get another point of view again.

  7. October 19th, 2006 at 11:47 pm
    candice said

    Hey liz. Either akismet ate me or I forgot to hit post. Could you tell me which?

  8. October 19th, 2006 at 11:50 pm
    ME Strauss said

    Not there, Candice. There’s only 8 there to check. Sorry. :(

  9. October 20th, 2006 at 12:19 am
    candice said

    Doh.

    I was just commenting about it being difficult to price stuff. I got hit with a last-minute contract job (at last minute rates, no less) on Monday and really got put on the spot for it.

    Paid off, though, rather well.

  10. October 20th, 2006 at 12:32 am
    ME Strauss said

    Hey, Candice,
    I got something last minute on Monday too!
    Those last minute values are the best! :)

    After the work is over, that is.

  11. October 20th, 2006 at 2:58 am
    candice said

    Agreed. I finished that project at 2:30am.
    (Mind you, I’m usually up this late, but I quit billing hours at midnight, normally, and I usually don’t work the whole evening.)

  12. October 20th, 2006 at 5:51 am
    ME Strauss said

    Hey, Candice
    It’s good practice NOT to work all evening and to stop doing billable things at a reasonable hour. But on the other hand when someone has an emergency and respects you and your work enough to pay a premium because they are interrupting your real life. I think that’s a client worth going out of the way for . . . at least for a while. :)

Name (required)

Email (required)

Website

C'mon Let's Talk!