Every once in a while an interview goes long. For the sake of you, my loyal reader, I cut excess and trim everything down to only the most relevant content. Usually, you don’t miss much. Every once in a while though I have to cut something really good. This was one of those times. Talmar Anderson, who I recently interviewed, has a story that I frequently think about when I think about pricing my own products and services. I love this analogy and I couldn’t bear to see it cut altogether. So, enjoy this short interview addendum.
You’ve told me this story a few times and you know I love it, so tell me again your story about the toothless meth head?
I often meet with business owners and the majority of them are underpricing because they think they are just getting into the market or they don’t have the expertise or they just want to help people. And that’s fine, you’re in business for what you’re in business for and as your name and expertise grows you must increase the pricing to reflect that. You certainly need to understand your market and not price yourself out.
So, when talking with a really good friend, the very first time, she was driving me crazy. She was underpricing and she just wants to help people, but I said, ‘you know what, if you give it away for too inexpensive it really feels inexpensive and you do great work so why are you doing this?’ She felt bad about charging people. So I said, what if you knock on the door and it’s a toothless meth head? I have this one person in my mind and he says, ‘I can fix your gutters for $50.’ And I look up there and sure enough my gutter is falling off and I think, $50, that’s not too much, but is there any chance in hell I’m letting that man on my roof? Nooooo thank you. Not only am I worried he’s going to look in my windows and steal something else. The value is not there. What if I can’t find him again later or I can’t recommend him later if he does do a good job. I want to know he is a credible person who is safe for me and my family. By saving this $50, the value is gone. It’s quick, it’s easy but something bad is going to happen from it. So every time you are thinking of valuing yourself, think: I am NOT a toothless meth head. Otherwise, I’m going to call you out and say it. My friend totally got it and I’ll tell you anyone who starts doing their pricing, as I suggest never gets a batted eye. Not once has anyone said that’s too much for me.
It does happen to me frequently that people will say your price is out of my market. But when I price myself accordingly, I get the clients I’m supposed to get.
Your not being turned down by your target market, you are just being turned down by people who are looking for the cheapest product. But that’s not for you to do. That’s not the quality of your work, your time, and your energy. If you price yourself like a toothless meth head, then the clients who get the bottom basement pricing see you as a toothless meth head. They’re going to try and get every last thing out of you because they got you for so cheap. When you undercut your pricing, that client is going to be your biggest pain.
See? Totally worth the extra few minutes.