Friday, 16 March 2012

Confidence and Value

It’s been a little while since I’ve been able to get a post out to you all, so firstly, thanks for your patience.
I’d like to talk today about confidence, not the confidence to stand up and talk, or to ask for the sale, but the confidence to charge the fees that you want, and deserve. In many industries, profit is made from the mark up of goods over their production costs, with the expectation that enough will be sold to cover overheads.
What if You are the product? Or your skill? Take photography for instance. A good wedding photographer can easily charge more than a couple of grand- A good camera, lenses and accessories easily cost a tidy sum, but over their lifetime can make each shot cost only pennies to take, and today’s online printing labs mean that they only cost pennies to print too. But when you hire a photographer for a wedding, you don’t end up paying pennies for your album. This is where skill can potentially increase the cost of the final product over a hundred fold. I say potentially, because the actual cost of printing is technically very low. This is where confidence comes into play.
Or perhaps it’s as good to say, this is where a lack of confidence comes into play, reducing the amount you can charge. Not necessarily because your client thinks that you are ripping them off, or it’s not worth it- but because you think you are! If you believe that you couldn’t charge more than a few pounds for every photo because you believe that it’s a fair mark up on the cost of printing and your time taking them, then you’re losing out!
Products like photo’s, and hundreds, if not thousands of others, transcend the usual way of costing products. In this example, photographs are emotional, they are the lasting memory of a special event, looked after they are that lifetime reminder of the things that important, and the people that really matter to us. These kinds of products are almost priceless, and it becomes competition between photographers that brings prices down.
If you have the confidence to move from the cost of the product, to the value of the product, they you can charge as much as you believe is right, if you feel you are better than the rest of your competition, then charge more. If your product is more pleasing, technically better, and your service is impeccable, then you are fully justified in charging the extra, studies have shown that people are happy to pay anywhere between 5% and 25% MORE for a better service, that extra is fully justified in being your extra!
It’s a very similar situation for say a web designer creating a website for a business.  The value that a business website can create, far outweigh the development time and costs. Charging for the value created, and the profit and money your client will make, means its a win win situation for all involved.
Have that confidence to charge, whatever you feel is worth the value you have created, and success will be yours!