Pricing – How to charge what you are worth

Pricing is a sensitive subject at the best of times. We’ve all seen the discussions online…

‘You can’t charge that much where I live’

‘You can only work on day rate here, not price work’

‘You need to lower your prices to get work at the moment because of COVID-19’

Well, in the words of Henry Ford ‘Whether you think you can, or whether you think you can’t – you’re right.’

So, let’s get rid of that ‘I can’t charge more money’ attitude and start discussing ways that mean you can!

In order to start charging more for your services, you need to do the following things:

  1. Get better at presenting your VALUE to potential customers
  2. Get used to being rejected
  3. Start working harder to get more enquiries

Example:

Let’s say one day Dave the decorator has 5 enquiries.

Dave usually charges £100 per day, but recently he’s been thinking he is worth more than this and feels he should increase his prices.

So, he prices up the first job at £120 per day.

The customer rejects the deal saying he is too expensive.

What does Dave do now? What would you do now?

If you are not a hardened salesperson, you would likely say ‘I suppose you just can’t charge that around here’. ‘That was stupid. I’ve just lost a job because I got greedy’

You might even recite the story online to make yourself feel better. ‘It’s nothing to do with me or my skill. You just can’t charge that around here’

Dave then goes to price up the next job. He’s scrapped the idea of charging £120 a day as he’s just spent the last 24 hours convincing himself you can’t charge that much. So instead he goes back to his usual £100 per day.

He gets the job. Great!

Dave then quotes for the next job at £100 a day. He gets that too!

He then gets the next one at £100 a day! 3 in a row!

On to the fifth enquiry and Dave is flying.

However, this time, he quotes £100 per day and gets told he is too expensive.

Dave immediately feels rejected and again starts to think maybe he’s charging too much.

Perhaps COVID-19 is taking its toll and he needs to be more like £80 per day?

Sound familiar?

In sales, it is so easy to think you should be closing every deal in front of you.

It is also a very natural reaction to focus on the rejections and then try to blame everything under the sun to justify it to yourself.

So how do we overcome this using the 3 points I mentioned earlier?

  1. Get better at explaining your VALUE to potential customers

Look at every aspect of your business and decide whether it portrays how good you are at your job. Have you ever looked at a website and thought it looks like it was designed by a 5-year-old in 10 minutes? And on the flip side, have you ever looked at a modern and professional looking website and thought it looks like whatever they are selling must be expensive?

If you want to start charging more for your services, everything you do must go up a level. Not just the quality of your decorating.

For example:

If you buy a car from a road side dealer, you’ll probably get served by someone in a cheap suit smelling of Lynx Africa and you’ll sign the paperwork in a portacabin that has a calendar on the wall with pictures of half-naked women.

Buy a car from a nice looking forecourt and you might get complimentary coffee whilst you discuss offers, everything in the showroom will be clean and modern looking. You may even get a bottle of champagne when you complete the deal.

Both of these dealers could be selling the same quality of car, but I can guarantee you that the posh modern dealer is charging more money.

But people are still buying from them!?

Even though people could get it cheaper from the garage down the road with the portacabin. They still buy from the more expensive place!

Why?

They are buying from them because they feel they are getting a better overall service and better value!

So, if you are a decorator with a cheap looking website (or no website), you arrive for meetings in a dirty van with scruffy clothes and you answer the phone by saying ‘Awrite’ instead of ‘Dave’s Decorators, how can I help?’

You are underselling yourself.

Customers don’t really know how good you are at decorating until after they have hired you. (Regardless of recommendations and pictures of previous work)

This means a lot of what you can charge is based on the image you portray before you even get a brush in your hand.

  •  Get used to being rejected

Sales is tough. And as much as you might despise doing it, if you are a self-employed decorator you are going to be selling.

No matter how you dress it up, you are trying to convince someone to buy your services, and that is sales.

You now need to realise sales is full of rejection.

No matter how good you are, or how cheap you are, you are going to get rejected.

How you deal with that rejection is a skill you need to develop.

It is easy to handle rejection by blaming other people / circumstances. Or try to limit rejection by dropping your prices.

The skill and mindset you need to develop is to put these ideas out of your head.

Instead, decide what you are worth and start charging accordingly.

Remember Dave the decorator? He got 3 out of 5 sales. But at the end of it, instead of focussing on the fact he is closing the majority of his deals, he was considering lowering his prices! If I were Dave, I wouldn’t be lowering my prices if I closed 3/5 deals. I’d be putting them up!

  • Start working harder to get more enquiries

In sales, not getting enough deals through is rarely an issue of closing the sale. It is more often an issue of not getting enough enquiries in the first place.

Dave closed 3/5 deals in our earlier example.

But what if he worked harder on his prospecting and marketing. He could have had 10 enquiries to work with.

Then what could he have done???

With the extra enquiries, come a lot of benefits for Dave.

Example:

Let’s run the example again, using the techniques I’ve discussed above.

So, instead of 5 enquiries, Dave has been prospecting harder and doing more marketing, so he now has 10 enquiries!

Sale 1. He pitches at £120 a day and gets rejected. Oh well, still 9 enquiries left.

Sale 2. He pitches at £120 a day and gets rejected. Hmmm, annoying, but he still has 8 enquiries left and he is sure that he is worth the price. Dave is much better at handling rejection now.

Sale 3. He gets it! At £120 per day! Brilliant. This validates that the work he did to tidy up his overall company image and put it inline with the quality of his decorating has paid off.

He is now sure he is able to charge an extra £20 per day! That’s £100 per week! £400 per month! Nearly £5k per year!

Sale 4. Rejected again. But oh well, he’s still buzzing from sale 3.

Sale 5. Rejected.

Sale 6. Closed at £120.

Sale 7. Rejected.

Sale 8. Rejected.

Sale 9. Closed at £120.

Sale 10. Rejected.

Now there are 2 ways of looking at this example.

Most people going through it would say, f#ck this.

Dave got rejected 7 times this time around.

He only got rejected twice last time.

However, Dave didn’t focus on the rejection. He focussed on the fact that in both scenarios he got 3 deals.

And if he continued working as he did in scenario 2. Getting rejected more but charging £20 more per day.

He will earn nearly £5k per year more!

To summarise

  • Sales is tough, and full of rejection. But work hard and stick to what you are worth, and you can do it!
  • Remember, presentation is key. How many times have you seen a blind taste test on the TV and the cheapest product from Aldi came out top and the expensive M&S product was last? Yet M&S still sell loads of products. This is branding and marketing at its best. 8 out of 10 people might choose to shop at Aldi over M&S, but that doesn’t stop M&S from charging more money. They simply focus on the customers that do choose them and not the ones that reject them.
  • Price is less of a concern for people than you might think. There are lots of other factors. For example, if it was all down to price, nobody would drive a BMW, or have an iPhone or wear Nike trainers because there are cheaper alternatives. But we all do, because when we see the value in something, we’ll find the money.
  • Block out the bullsh#t. Just because someone says you can’t charge a certain amount for your services, doesn’t make it true. To paraphrase Henry Ford once more, whether you think you can or you think you cant charge that much. You’re probably right.

And finally, a little stat for you…

  • There are over 2.5 million people in the UK that are millionaires. That means about 1 in 10 house holds are millionaires. So, regardless of where you are. You are never far from someone who can most definitely afford to pay you an extra £20 per day! You just need to show you are worth it.

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2 thoughts on “Pricing – How to charge what you are worth

  1. I have never read a document that applied to me so much as this one did. Thank you.
    Before becoming a P&D and Multi-trade owner I spent 15 years in sales and I could convert sales for another company just been struggling to do it for my own business.
    Clearly didn’t value my own worth

    Like

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