I want to say right at the start that I don’t usually charge $10,000 for five- (5) minutes work. But if I did, you should pay it.
As a guy who predominately sells services – whether it be marketing, media or web consulting – I’m constantly asked to justify my fees.
Now, before you get bored, this article isn’t me trying to justify what I charge. Or what anybody else charges for that matter. This article is to try and set out the thought patterns of those who are successful and those who are yet to reach success.
The multi-millionaire client said, “I’m not going to pay you that!”
I had flown into Sydney for a meeting with a potential client. We discussed at length some marketing work we could do for him (he’d been referred by a friend) and the client was impressed and excited.
He had a reputation as a tough negotiator and a guy who got you down to the absolute best value you could give. But I was ready for him! I had gone over every possible rejection and counter argument until my mind was frazzled.
The tactical advantage I had was that I was confident we had the knowledge to make this guy some serious money. I wasn’t too keen to budge at all.
The structure of the deal was for a commission to be paid on success. No sales = no money for us.
So, I made my first offer this way
“Our fee is X% of sales,” I said.
Okay, not so sophisticated but direct. I had in my mind a whole speech of why we represented great value at that price. I was just waiting for the client’s counter-offer before I started.
His counter-offer wasn’t what I expected.
“No, I’m not paying you X%. I’ll pay you Y%,” he came back with.
He offered to pay me 25% more than I asked for!
I was about to open my mouth and start to justify my price when it sank in. The client was paying me 25% more than what I asked for. Boy, am I a great negotiator or what??!
Right about then it struck me just why this guy was a hugely successful businessman.
- he didn’t think like everyone else.
- he didn’t try and screw me down over every dollar.
- he didn’t want to pay me the lowest possible amount.
- He was the exact opposite.
“I want to pay you more than anyone else pays you so that you will make more money for me. If you make an absolute heap of money, it means I am too. That’s what I want. I want you in my corner, fighting as hard as possible for my business,” was his reasoning.
And good reasoning it was too.
He is one of the few businesspeople I have ever dealt with who take that attitude. And, not co-incidentally, he’s probably the most successful businessperson I have ever dealt with.
Here’s the question:
Would you pay me $10,000 for 5 minutes work?
“Yes” is the right answer again.
Here’s the answer… really
Before you can answer the question truthfully, you have to ask this: What value do I get for my money?
Only then can you make an objective decision.
I’d happily pay someone $100,000 for 5 minutes work if the benefit to me was a profit of $101,000. No problem at all.
I’d be even happier to pay that $100,000 if the profit was going to be double that.
The power of 1 email
I don’t know if you know the power of TV. If you don’t, it is simply amazing. it’s life-changing for many people. It’s incredible.
- I have personally generated enormous sales from a story on a TV show (a few times).
- I have a client who added millions in value to his company after a major TV program featured his product.
- I have well-established contacts with a number of influential players within the media industry.
It could be as little as a phone call for your product or service to receive coverage that is worth hundreds of thousands of $$$ to you.
Sometimes it can be that easy.
Who cares about price!! It’s all about value
I wanted to use big numbers above to grab you attention. They are all true figures by the way.
But the point I really wanted to get across to you was the need to look at the value for whatever it is you are buying, not the price. The price is irrelevant.
The price makes no difference whatsoever. It’s all about value. Keep that thought in your head.
Now whenever you buy any marketing product – whether it be advertising or consulting hours or copy – look at the value.
A few years back, I paid a guy to do a sales letter for one of our web sites. We paid him his money, he did the job and that was that. Nothing really happened on the web site. No great sales peak. No massive jump. Nothing at all.
The next guy wanted 4-times the first guy!
I was referred another copywriter. He came with the highest of recommendations from a friend of mine.
I paid this guy something like 4 times the price of the first guy (I can’t actually remember how much more it was). The first guy was something like $500, this second guy was $2,300. Something like that anyway.
And I don’t mind saying that I was a little nervous handing over the cash. $2,300 is a lot of money in anybody’s language.
But my friend was there to, figuratively, hold my hand as I pulled my wallet out. Boy, am I’m glad he was.
I paid, he worked, he left. I sat and waited. And waited.
The site this new copywriter worked on very quickly increased it’s number of sales by 40%. And of those 40%, just over 20% are repeat purchases. So the value to me of that copywriting is way, way above the 40% increase in sales.
The value is hundreds, maybe even thousands, of times more valuable than the first copywriter.
And that is an example of why value is far more important than price.
Hope that helps you to continue to look at the value of what you are buying. It’s the value that makes any purchase worthwhile.