Are you charging what you're worth or how long you take?
There’s revenue in that experience!
An attractive, well-dressed woman is walking along a French Boulevard in the Spring of 1907. Sitting under the shade of a large Maple tree, the woman sees an elderly bearded man painting onto a canvas. As she walked closer, she notices that the man is indeed Claude Monet.
Without hesitation, she asks if he would be kind enough to sketch a portrait of her. The French Impressionist agrees and sets to work with a pencil and sketchpad. Shortly after, he hands the young woman the portrait. Delighted, she reaches for her purse and asks “How much do I owe you Monsieur Monet” The artist responds politely “40,000 Francs”.
So what value do you place on your expertise? How many years have you spent honing a skill, building knowledge, paying for and learning from mistakes? Do your customers benefit from your ability to achieve a premium result in an increasingly quicker timeframe? For your increasing expertise, do they pay more – the same – or indeed, less?
If you are providing a ‘fee for service’ and you are basing your fee on how long you take, be sure that you are not in effect, working harder for the same income. That is, if you used to take an hour to complete a task and you charged customers $100, but you now can now do the same job in 45 minutes; are you charging them $75?!
Furthermore, when calculating how much to charge, are you considering how efficiently and effectively you can deliver outstanding results? This sounds very much like a premium service. And isn’t it true that most folk expect to pay a premium for that? Less really can be more!
Got Gaps that are Going Unclosed?
Imagine you live in a small country down with only one grocery store. You take your groceries for payment and the young fella at the checkout scans them. You decide to pay with cash and as you’re walking out the store, you realise that he has short-changed you by 5c.
The question is: Would you turn on the spot and inform the young man of his 5c error? I’m expecting that you (like most others) wouldn’t bother. Let’s add to the story. You continue to shop at this store each week, and each time the same clerk short-changes you by 5c.
How long would it take before you dealt with it? Virtually everyone agrees that eventually they would have to say something. Some would be onto it the second time. Others would wait until ‘the camel’s back broke’ This is ‘the last straw’ approach and is the least effective way to fix problems. Often we reach the end of our wick, just waiting for it to happen again and then we let fly!
“If you short change me 5c again…!!! Meanwhile the stunned clerk is thinking “Good grief. It’s only 5c!” not aware that it has been going on for weeks.
A final question. Would you go back if you were short-changed $10? I thought so. Too often, this is how we deal with gaps in business. We are all over the $10 ones, but the 5c gaps that just keep chipping away, either are ignored or dealt with as a ‘last straw’. Furthermore, each time you allow a gap to pass (be it 5c or $10) you are essentially providing permission for that to keep happening.
If you have problems (gaps) then deal with them all. That is, be hard on the problem, not on the person. The person is rarely the root cause for the gap. Alternatively, if it’s not worth dealing with, then it should not be part of your standards, policies etc in the first place – so it isn’t really a gap. In other words – get over it!
Naturally, it is better to close the gap than to lower your standards – right?