Tweet

How Proving Your Value Costs You Money and Loses Clients

Guest post by: Sherri Garrity

Article Overview: As a small business owner or aspiring entrepreneur you may be feeling frustrated because you are spending a lot of time and money to prove your value, but not getting the results you anticipated. Perhaps you are committed to sticking with things that are not fitting you or working for you. It really can be much easier, but because you’ve bought into the “success equals sacrifice” you often don’t see the opportunities banging at your door. There is one area where doing less, more elegantly, will pay off more than doing things the harder way.

How Proving Your Value Costs You Money and Loses Clients

If I were to ask you, are you committed to doing things the hard way? I'm sure you'd say no. But every day I see examples of business owners making what could be simple, instead very complex. What they don't realize is that it's costing them a ton of money in lost profits and sales.

Of course, we don't do this consciously. The fact is, it's something that we've grown up believing. We've learned to equate success with sacrifice, and high value with more. If you're committed to doing what it takes and are prepared to work really hard until it pays off I'd like to play Dr. Phil for a moment and ask: How's that working for you?

Yes, you need to have faith, develop a strong strategy, and be consistently committed to sticking to it. You also need to be willing to stretch yourself out of your comfort zone, and learn the technical skills needed to run a business. But muscling your way through and doing more is not the answer.

Here are two examples of how this backfires on you.



One: Under-pricing and devaluing your worth



I see this often with entrepreneurs who feel the need to work their way up. They're inclined to start low and aim high, when they are far better off going for the gold right from the beginning. They price extremely low, and feel the need to prove themselves by discounting, giving a lot away for free, take work that doesn't fit them, and limit themselves in many other ways.

As a result of charging low fees, they often get clients, and lots of them. The problem soon becomes getting the work done. They can't keep up. They are afraid to market more because they can't take on new clients. They're becoming known for the work they don't really want to do for clients who are not their ideal. They're afraid to raise their fees because they're worried they'll lose the clients they have. And guess what? Clients who buy the cheapest solution are often the most difficult to work with. Does that sound like fun?



Two: Setting high fees and defending your worth

Other entrepreneurs who understand the need to set their prices higher often still give too much away because they feel they need to prove their worth. Demonstrating value is fine, but doing too much out of feeling the need to defend high prices, is not. Entrepreneurs who bend over backwards and stuff their packages with so many extras often don't realize that although they might be charging and getting a premium fee, they're chipping away at their profitability by going overboard. And the sad thing is that most of the time, their clients actually don't want all of the extra stuff. They're often overwhelmed by it! Or they draw out a process longer because they're afraid letting the clients know how quickly they did it, will make it seem less valuable. I n either case, it takes away from the elegant, efficient solution the clients are more than willing to pay a higher price for. And it becomes unsustainable.

If you watched the popular 1980s sitcom Murphy Brown, you'll remember Eldin. He was practically a live-in at Murphy's home. What started as a simple project grew more and more ambitious but never was completed. You may have hired contractors like this.

When it came time for us to repaint our house a few years ago, I knew it was something we couldn't take on. I was busy with my working and having a young child at home. In the past I had tried various painters and was really frustrated. While they were not around quite as long as Eldin, each job took far longer and became more complicated (and more expensive) as it progressed. They were sure to tell me how much work it was for them, how many steps there were to take, and why it was costing more and taking longer.

I decided to try someone else I found through a referral. He quoted me a higher fee than the others. But he sold me on efficiency and guarantee. He let me know what to expect and made it very easy for me to say yes. The morning of the appointed day, he arrived at 7:30 a.m. as promised. All I had to do the night before was move furniture a few feet away from the walls and take down hanging items.

By the time I arrived home around 5 p.m. that day, he was gone. I had a beautiful, professional quality paint job in our family room, hallway and bathroom, and it was completely done. No mess, no fuss, and delivered as promised. I felt it was almost magical. This was not something I could ever do myself. Was I willing to pay more for that? You bet I was. And I've referred him thousands of dollars in new clients since.

So what does this have to do with doing things the hard way?

I encourage you to look at the two examples of business owners. If you see yourself in either description, think about what your value is to your clients. Most of the time, they are paying you to solve a problem, and the faster, more gracefully and expertly you can do so, with the least amount of work and inconvenience for them, the higher the value is of what you offer. Think of ways you can make it easy and effortless for your clients to say yes, and to work with you, instead of ways to prove you're worth it.

Related Articles
  Business Opportunity - The Vehicle In Pursuit of Happiness
  Mentoring, An Essential Part Of Forex Success
  After you ask for the business..... SHUT UP!
  Control is an Illusion
  What’s Wrong with Sore Losers?
  Is Profit the Sustainable Goal?
  Find a Need and Fill It
  Why You should Not Do Freelance Website Enhancement or Structure - Tips of the Net Development Firm
  Finance Start-Up
  The Benefits of Working with a Virtual Assistant over a Temp
  What Your Ezine Will Cost
  StartUp Costs
  7 Newsletter Writing Secrets That Will Retain More Clients for Life
  Mortgage Pre Approvals – Examining the Importance
  That Fabulous Four Letter Word!
  Sales Training London: Sell Today Educate Tomorrow
  If you REALLY want it, I’ll drop my price!
  Total Cost of Ownership TCO of IT
  Entrepreneurs Want A Smoothly Running Profit Making Business?
  Online Profitability - 3 Considerations To Think About

Article Tags: Becoming an entrepreneur, Deciding your packaging and pricing, employee to entrepreneur, Fellow fugitives, Marketing your own business, Mindset



Related Forum Posts
Re: Who Did You Learn Most From and Why? - Hi Martin, You missed out on the most essential community that helps you grow - Your Clients. Well, I believe that my Initial Clients have been the ones who have given me the moments of 'aha' in my business. They have stood by me even when I was a starter and that has helped me shape and build my stand. They have helped me grow as an entrepreneur, learn to have loads of patience and make the most of what comes across. They have also helped me to strengthen me as a person. btw, personally speaking, my Grandfather always kept me on track and lent me emotional support when I was down in any matter - be it business or otherwise.
Re: Which would you start: a Blog or Online Community? - It is a difficult decision to make. Lets start it this way - What are you more interested in? Money? or Friends? or Both? If its purely Money, then Blog might be an appropriate answer. But consider this - It will be people (visitors) that will bring traffic to your blog and then Money will follow. This will be possible after a time and during this time it will be your friends who will be the starters. If you are looking for friends only, then its true that not many will be interested in knowing how you have beaten them in the game or the other way round. So it will be preferable to have a Forum where they can share ideas with you and others. But you can share your insider knowledge with them and invite comments from your Blog. You can also put up information on what others (including your friends) don't know about Tennis. The blog you create can provide News, Inside Information and also Techniques that can be used by the new entrants in the world of Tennis.
Making Money in 2011 - Hello forum members! As we draw closer to the new year I thought it would be appropriate to change the title of our forum category "Making Money in 2010" to "Making Money in 2011" - I'm looking forward to some interesting discussions and wish everyone a prosperous New Year!
QuickBooks vs. Microsoft Money vs....? - I have always used Microsoft Money to run my business - accounting, invoicing, etc. It came with my computer when I got it and integrated well with my online banking system so everything is a breeze. It only takes 30-60 minutes every quarter to do the bookkeeping (keep in mind that I have a very simple business - no inventory, very little invoicing, I do all my payments by credit card, etc). Is QuickBooks or Money the best accounting tool for small business owners? Or is there something even better?
Coaching Women vs. Males - Tami, Do you have any clients from Eastern Canada? I was wondering if Coaching Clients from either Coast was any different. Also is it different coaching women entrepreneurs vs. males?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Here's a great ROI

Why Small Businesses Don't Survive

The Strong Leadership Formula

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.