Charging what you are worth is (and probably always will be) the hardest entrepreneurial lesson worth learning. Fear of asking for your value has its origins in those early days when you would work for free or give product away just to get the word out, but trust me, it’s a habit you have to break!
Several frank conversations with entrepreneur friends have led me to the conclusion that when you decide to stand firm, everything gets a whole lot easier. What motivates this decision is often external – a change in circumstances, the influence of a third party or even a realization what it costs you to settle for less.
It happened for one friend when she realized that with the rising cost of childcare, she simply couldn’t afford to undercharge. Another got tough after an extended illness limited her available work time. For me, it was realizing that getting less than my full rate wasn’t worth trading an afternoon at the paddling pool with my brand new baby.
The difference between trying to charge more for your time and truly standing firm is a sort of quiet “Take it or leave it” confidence that tells people the negotiation is over. Sometimes the Cheap Charlies will opt to leave it, but more often than not, people will respect you for it.
The Secret to Standing Firm (in 5 Easy Steps):
#1: Set the Rules – Know where your boundaries are around pricing and establish the ‘rules’ before you start negotiating with prospects. Are you willing to give volume discounts? How much do people need to spend to qualify? What happens if they promise to give you a certain amount of work in exchange for a preferred rate, but fail to deliver on that promise?
#2: Know Your True Value – Write out all the unique ways you help your clients or customers. What is your true value compared to your competition? Is it your industry knowledge and years of experience? Or is it something slightly more intangible? The way you put your customers at ease while helping them navigate a difficult process? It’s all valuable and more often than not, what they value differs from what you list on your web site.
#3: Differentiate and Communicate – Remember the best defense is a good offense so instead of waiting until prospects ask the dreaded question about why you charge so much for your time, communicate your unique value upfront. Share success stories, and your unique insights as part of your everyday marketing efforts.
#4: Say “No” and Be Quiet – When asked about charging less, say “No” and explain why you don’t give discounts (or the limited circumstance under which you do give discounts) and then shut-up! This is where the wishy-washy ruin their chances of getting what they ask for (prospects can sense fear and will happily wait you out). Say what you have to say about it and shut up!
#5: Overdeliver and Amaze – The best part of charging what you are worth is you can invest more into those clients and customers. Because you didn’t undervalue your time, you don’t have to rush through the project to make ends meet this month. This is where you show them that you were worth the extra spend and wow them into coming back again and again.