Providing value
I'm not sure where I heard this story, but it always stuck with me:
A guy's basement is completely flooded when he comes home from work. He immediately dials a plumber and by the time the plumber gets there water is spewing from the joints of several pipes because of the pressure. The plumber calmly finds a specific pipe, hits it hard with a hammer, and the problem immediately stops.
He then presents a bill to the man for $3,000. The man says "this is ridiculous, it only took you ten minutes to get here and you fixed the problem with that hammer in a few minutes. I'm not paying this bill." The plumber replies "I'm charging you $30 for labor and $2,700 for knowing where to hit." This is so true - the plumber saved the man thousands of dollars by stopping the problem, regardless of the fact that he only spent a few minutes at his house.
A couple of people I know have recently told me that I should raise my prices for my SEO packages because of the value I provide to the client. I had mistakenly been pricing based on time like a traditional consultant. "I feel like I'm worth $X/hour and I will spend $Y hours on the project, so I'll charge $X*Y ." The problem with this mentality is that I'm neglecting the true value of my services.
In many cases traffic and sales increase 5 times, 10 times, or even 100 times. I think my value to them is worth more than I recognize. I had one potential client that was knowledgeable in SEO and approached me about a very specific problem. Within an hour of prep work for our second phone call, I thought of a few possible solutions. He agreed to pay me an agreed upon price to dig deeper and do a more thorough SEO analysis, but he never paid. He probably never paid because he took the ideas I mentioned during the phone call and pursued them himself. They are a big company, and if the solution works it could increase sales by at least several thousand dollars a month.
I won't make that mistake again. I'm not saying that I won't throw out ideas in initial consultations, but I need to be careful that I don't give away TOO much of the value without getting paid. I'm beginning to realize that most of the time there is quite a bit of value in what I do and that I probably should take that more seriously and charge accordingly.
A guy's basement is completely flooded when he comes home from work. He immediately dials a plumber and by the time the plumber gets there water is spewing from the joints of several pipes because of the pressure. The plumber calmly finds a specific pipe, hits it hard with a hammer, and the problem immediately stops.
He then presents a bill to the man for $3,000. The man says "this is ridiculous, it only took you ten minutes to get here and you fixed the problem with that hammer in a few minutes. I'm not paying this bill." The plumber replies "I'm charging you $30 for labor and $2,700 for knowing where to hit." This is so true - the plumber saved the man thousands of dollars by stopping the problem, regardless of the fact that he only spent a few minutes at his house.
A couple of people I know have recently told me that I should raise my prices for my SEO packages because of the value I provide to the client. I had mistakenly been pricing based on time like a traditional consultant. "I feel like I'm worth $X/hour and I will spend $Y hours on the project, so I'll charge $X*Y ." The problem with this mentality is that I'm neglecting the true value of my services.
In many cases traffic and sales increase 5 times, 10 times, or even 100 times. I think my value to them is worth more than I recognize. I had one potential client that was knowledgeable in SEO and approached me about a very specific problem. Within an hour of prep work for our second phone call, I thought of a few possible solutions. He agreed to pay me an agreed upon price to dig deeper and do a more thorough SEO analysis, but he never paid. He probably never paid because he took the ideas I mentioned during the phone call and pursued them himself. They are a big company, and if the solution works it could increase sales by at least several thousand dollars a month.
I won't make that mistake again. I'm not saying that I won't throw out ideas in initial consultations, but I need to be careful that I don't give away TOO much of the value without getting paid. I'm beginning to realize that most of the time there is quite a bit of value in what I do and that I probably should take that more seriously and charge accordingly.
posted by Adam McFarland at
12/06/2006 10:08:00 PM
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