The Desert of Arizona
Sunny and Windy 58 Degrees
If you provide a service to clients, the purpose of today’s issue is to recommend that you stop charging for what you do. You might think it bold of me to suggest that, should you take this advice today, you’ll find yourself in a much better position in the coming years and months. But that’s exactly what I’m suggesting.
And in the next few minutes, I’m going to walk you through why this decision is in your best interest and how it will lead to bigger and better success.
In fact, I’d go so far as to say that your work with clients and the future success of your service business depend on your decision to no longer charge for what you do. I’ll tell you why it’s important in just a moment.
When I started in the technology consulting business way back when I lived in Chicago, I charged $40 per hour. I remember a guy telling me once how reasonable that was. I also remember that, at that time, I thought his reaction was a good thing.
After all, who doesn’t want to be “reasonable” when it comes to charging for your service? Way back then, I had no idea that “reasonable” wasn’t really the issue. It doesn’t even matter.
Before we get to the part where I reveal how you keep eating if you’re not charging for what you do, there’s a town I want to take you to. It’s a place I like to call “Vendorland.”
A Quick Drive Through Vendorland, Where the Property is Cheap and the Views are Obstructed
If you’ve never visited “Vendorland,” allow me the opportunity to take you on a quick tour. Vendorland is where most service providers live. You could call it the bedroom community for most of the businesses in the world that service clients. It’s crowded, the streets are narrow and everyone is hustling to make ends meet.
If you live in “Vendorland,” there are basically three things that matter. These are the only things that you get asked from potential clients:
- Are you competent?
- How cheaply can you do the work?
- How fast can you do the work?
Now if you’ve been in a service business for any length of time, you already know that the answers to these questions rarely lead to anything good for you. They lead to low fees, and they also lead to quick turnaround times for the work you do.
If that was it, I’d still recommend you never live in Vendorland. Unfortunately, it gets worse, much worse.
When you live in Vendorland, the reason your conversations with prospective clients focus on those three questions is because those are the only points of difference the poor prospect notices in the sea of sameness.
Basically, everyone in Vendorland looks and acts the same, so price and speed are really the only criteria you can use to choose someone.
Here’s the Route to Get Out of Vendorland and Create More Success By Not Charging For What You Do
First of all, understand that not charging for what you do doesn’t mean you’re not getting paid. What it does mean is that, instead of charging for what you do, you’re going to start charging for something else. You’re going to start charging for something your client actually cares about.
Here’s a little dose of reality:
Your client doesn’t care about what you do. That’s why the fee for that is something they want to minimize. The secret is to realize that your client does care about what they get because of what you do.
So when you start charging for that, you’ll experience a number of immediate benefits. If you’re going to start charging for what your clients get because of what you do (think of this as the ultimate “benefit” they are pursuing), then the discussion with the prospect is going to shift to that. You’ll be talking about what they want—about something they actually care about.
If you’ve ever been to “Vendorland,” you know that no one there talks about anything except what they do. So when you shift the conversation to focus on something the client actually cares about (what they want to achieve), you stick out from the crowd.
The next benefit has to do with value and money. Because what your client wants is extremely valuable to them. What you do might not be valuable to them (frankly, because they might not even understand it), but what they want is valuable to them.
Clients will pay more for what they value. Your job is to make sure they understand the role your service plays in delivering that value.
Stop charging for what you do, start charging for what they get because of what you do. “And how much do you charge for that?” you ask? It depends…
And that’s where the money is hiding… in the “it depends.” This is why you ask questions. Without answers, you have no idea what the results of your work are worth to your client.
Information like that is super helpful. This is why you listen way more than you speak. Price is subjective, not objective. Price varies. Price is a function of value. Price is not a number you make up because everyone else is doing it.
Just to be clear, without a client, what you do has no value. Only when a client shows up can you start to put numbers to what you do.
Life is too short to be a “vendor.” If you want to stop being perceived as one you have to stop acting like one. And getting out of the business of charging for what you do is one way to do it.