Act like your price just doubled

February 16, 2009 9 Comments

What if tomorrow I forced you to double your price?

If you sell software, your prices just doubled. If you’re an hourly consultant, your rate just doubled. If you’re a salaried employee, you’re now demanding double your salary.

Ignoring the (understandable) backlash from your existing customers/employer, what would you have to do to justify the new price tag?

  • If you’re selling software, would it be best to add new features, or would people perceive more value if it were beautifully designed? Does it need more functionality or fewer bugs? If a customer emails tech support, what response would impress the customer? If a customer comes to you with twenty feature requests, do they get lost in the shuffle or do you proactively contact them quarterly with updates?
  • If you’re a consultant, could you command a higher rate if you got certified in some technology, or would you earn more authority writing a quality blog? Should you charge for every email or provide some advice gratis? Should you charge a low rate but milk projects for extra hours or should you be expensive but brutally honest with your time reporting? To maintain contact with your past customers, is it enough to send automated holiday e-cards or should you write a quarterly newsletter with useful tips and ideas?
  • If you’re an employee, how could you make yourself indispensable? Is there a project lying around that no one else is taking the initiative on? Is there a way to save money? Is there something you could do above and beyond your job description that would undeniably improve the company?
  • If you’re looking for work, should your résumé list as many technologies as possible or should you boast about your deep expertise in one area? Should you dwell on formatting or on making an impression? Should you copy the ten recommendations you have on LinkedIn or is it best to attach one passionate, glowing recommendation? Is it more impressive to list your club memberships or your Stackoverflow reputation?

Assuming this thought experiment has provoked some ideas for how you’d change your approach to business or your professional behavior…

What would happen if you acted like that without raising your price?

You’d crush your competition.  Maybe it’s the edge you need to make sales during a recession.  Or maybe you could justify raising your price!

Hold on though, isn’t it more difficult, expensive, and time-consuming to behave as if your time is twice as valuable?

Yes.

But then, behaving that way does make you twice as valuable!

Is this mindset helpful or just a distraction?  Do you have more tips for how to behave like your time is twice as valuable?  Please join the conversation and leave a comment!

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  • John Lipinski

    I couldn’t agree more! And, I recently decided to join Rackspace Hosting because the mission is to build one of the world’s greatest service companies. Our executive chairmen frequently blogs on this topic at GrahamWeston.com.

  • Jason

    @John: Congrats on the job. I’ve heard good things about Rackspace myself. I checked out that blog and it’s clear that customer satisfaction is genuinely #1 for Mr. Weston; that’s terrific.

  • http://virtualimpax.com Kathy |Virtual Impax

    It’s amazing how much MORE productive you become when you start acting like your time is valuable. And as you’ve pointed out – when you start to believe it you can then achieve it!!!

  • http://www.twitter.com/TheXander Alex Pyatetsky

    I first started thinking about this after reading Seth Godin’s 7% Solution (which I believe I was linked to from your blog).

    Right now, in the very early phases of a start up, my goal is to become entrenched in every worthwhile place that our target audience (small/mISVs) hangs out. I want to understand them inside out. What they care about, talk about, relevant memes, inside jokes, etc.

    The benefits are many

    #1) Community buy-in. I believe the popular saying goes "you’ll be surprised how interested your customers will be in your product if you give them a say." Yeah. That. This isn’t just a friend building exercise though, it should quite literally yield a better offering for this market.

    #2) De-strange-ifying yourself – A very charismatic friend of mine who taught me a lot about social dynamics (aka. picking up chicks) once told me, "you have to de-strange-ify yourself first." When I come up to a random group of people, I am just some stranger that is creepily hovering over them or trying to hijack their conversation. Who am I? What are my intentions? What am I going to do next? These are all of the questions that the unsuspecting group of people that I invite myself into is asking. They have to protect themselves, because MAYBE I’m crazy, or malicious, or stupid or embarassing, etc. Its only when you say something like, "Hey you guys looked like you were having fun so I thought I’d come say hello. My best friend just passed out flirting with the bartender," that people can comfortably open up. You’re no longer a stranger. Your intentions are clear and your behavior is understood.

    I believe this is the difference between Jason Fried coming into a forum, offering people "help," and somebody relatively unknown doing the same. The first is a pleasant guest visit, the latter, since the person is less well known and intentions less clear, may come off as a spammer.

    #3) People buy from their friends. I’m not going to explain this.

    In the early phases, where discovery is still a major pursuit, I think this is the best way that we can "under-promise and over-deliver."

    Thoughts/feedback welcome.

    Great post btw :) I think its better than Seth’s.

    -Alex

  • Jason

    @Alex:

    Yes this is very similar to Seth’s 7% piece (here’s the link, y’all).

    I think you’re right that early-on is the phase you can under-promise and over-deliver because no one has ideas yet on who you are. They don’t know what you might have promised (or promised last year).

    On the flip side, you have the "stranger" problem you talk about. It’s true that you can break that down inside social media channels, but how do you do that on your website? I think you can do it — through word-choice, design, prose attitude, etc. — but it’s harder than when you can converse with someone.

    I like your points. I would extend #3 to "People buy from people they like." Friends especially, but when you find a website that has a great manner to it, doesn’t that make you want to buy as well? Or a blog/twitter/facebook feed?

  • http://seoroi.com/about-seo-roi/ Gab Goldenberg

    Having experienced this personally, I’d add/generalize from your point about certification v blogging:

    Focus on credibility that matters to customers, rather than what matters to industry savvy people. Most b2b buyers are not savvy and prefer simple education via a blog…

  • Jason

    @Gab: I totally agree that you need to match what your customers will expect. In fact, none of my "leading" questions above were meant to express an opinion one way or another, but rather to cause the questions to be asked.

    The right answer depends on you, your market, your customers, your circumstance, your abilities, your goals, ….

    All I’m hoping is that you actively ask the questions!

  • http://corporatepreneur.blogspot.com Dale

    Hi Jason, a little off topic…

    One of my friends blogged about a giant gummi bear and I thought of your blog. Maybe you should get one as the mascot for your blog?

    http://morristsai.com/2008/11/gummy-bear-of-death.html

  • Jason

    @Dale: That’s awesome! You’d think I would be inundated with Bear-like objects, but really I don’t have that much. I wonder how long that would last in normal office conditions…. would it melt?

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