3 Reasons Why You Can't Afford to Feel Bad Charging What You're Worth
Entrepreneur's New Year’s Guide
We are very excited about the possibility of working with you, but we would need you to heavily discount your consulting rate. Is that something you would consider?”
That’s an email I received the other day after going back-and-forth with a fairly large real estate developer who initially submitted a consultation request. They wanted to bring me onboard to help their in-house team market a pre-construction luxury unit. My reply was very short and sweet:
I wasn’t trying to be cold, but at the same time I didn’t feel like I needed to justify why I wouldn’t discount my rate, nor was I going to feel bad about charging what I know I’m worth. Many entrepreneurs feel bad about charging what they are worth -- here’s why you shouldn’t.
1. Understand that you can never get your time back.
You will never get your time back -- we all lose it daily. If you feel your time is worth a specific dollar amount, charge for it and stick to your guns. The minute you even entertain discounting your rate, you lose credibility.
I’ll give you a perfect example -- something I encountered last week. I was considering bringing on another consultant to help me with a large project and I had one person in mind. After speaking to three different people that he was working with I discovered that his rates were all over the place for the same scope of work. I’m talking huge discrepancies that made you wonder if he was just pulling numbers from the sky or charging based on what expenses he had coming up. He instantly lost all credibility with me.
I charge based on what I feel my time is worth, along with the next point below -- knowing what kind of value I bring to the table.
2. Think of how much more money you will be responsible for generating.
The email reply I referenced above was from a real estate developer that was pre-selling a luxury high-rise condo development. The project was worth a ridiculously large amount of money. I offered to come onboard and help them for my minimum consultation engagement fee, for one simple reason: I wanted to knock it out of the park and then sign a much larger contract to help them move all of their future developments. If I knew it would just be a single project I would have come in much higher initially.
I knew how much revenue and sales I could help them generate, so I knew that my rate was small potatoes in the grand scheme of things. They didn’t bite -- and that’s fine, not everyone will -- but that doesn’t mean I should even entertain the idea of discounting my time.
If you don’t respect your worth how can you expect anyone else to?
3. Higher prices often equate higher value.
I’ve run split-test campaigns on e-learning courses for a company I was doing some consulting for, and one test still stands out to me. We tested two price points for a digital course. We tested a low price point of $37 and a higher price of $397. Which one do you think performed better?
The higher priced campaign sold three times as many courses as the lower priced test. Why? That’s simple -- people automatically associate higher prices with higher value.
If one marketing consultant has a rate of $40,000 annually and another charges just $500, who do you assume delivers the higher value? Naturally, the higher priced consultant is going to be perceived as the one who will deliver the greatest results.
Never sell yourself short -- and never feel bad about charging what you’re worth.