Are you leaving money on the table? Value is in the eye of the beholder. Avoid a common trap for service businesses by looking at ways you may be undervaluing what you deliver.
What would you do if you saw “salt” on the menu at your local restaurant? How about “ice?” Or if you were charged for those unlimited salad and breadsticks at Olive Garden? No way—they’re all free, right?
Of course not!
Restaurants typically do a terrific job of factoring in all the Costs associated with Goods Sold when creating their pricing—food, supplies, payroll, all get factored in. Margins are slim, and they wither or thrive on those COGS.
But in service businesses, where much of what we offer is based on time, it’s easy to end up throwing things in for free, discount or undervalue them—often without even realizing it.
It stems from our perspective. We don’t always recognize the value of what we offer. Some may be “bundled in” to our hourly rate… yet sometimes what we’ve bundled is waaaay more valuable than we’re charging for!
Value is in the eye of the beholder…
…and in the case of your services, it’s easy to forget that the beholder is your client or prospect. Sometimes you can miss this key point, even if you believe and are aware of it. Case in point:
I recently had a conversation with my coach about 2 value propositions associated with a program I was thinking about offering. From my perspective, though I recognized both were valuable—and I knew would be important to my prospects—one of them seemed rather insignificant to me, and not something to consider in pricing and development.
She pressed me to explore my reasoning and as I wracked my brain, I realized it was because it simply didn’t seem like a complex, deep or difficult thing to help with — as a result it made me feel badly to think about charging for it. How could I take money for something that felt kind of fluffy to me, I thought.
She spotted the story behind my view: since I, myself, value making headway on things that are complex, deep or difficult, those are the things I feel “comfortable” charging for. I was applying my own personal valuation scale to the offering.
But in my business, the client’s expectation is that I will charge for the value they receive. Value is in the eye of the beholder, and I’m NOT the “beholder;” my client is. The right question to ask was, as always, what is the value to my clients…
What blind spots might be holding your business back?
They nearly always relate to our knowledge and/or experience. In addition to the example in my story, here are 2 other situations I’ve spotted service providers fall prey to:
- Undervaluing the abilities, knowledge and/or deliverables that come easily to us. Listen for your inner voice saying things like “it’s just…” or “that’s easy…”
- Going more than the extra mile on tasks we enjoy. We often spend extra time on aspects of our work that are fun, even if that extra care doesn’t actually match our quote, or the level of attention our client truly requires. That can bite us twice: once when we undercharge, and again if business changes prevent us from overserving at that level in future, causing client disappointment.
Now don’t get me wrong! I’m certainly not advocating turning into a greed-driven money hog, LOL. But you don’t want your subjective perspective to blind you to opportunities either.
Take time to consider the value your clients receive, how you dish it out, and how you factor it in to your pricing and service mix. (Ready to dig in to more? The worksheet in our Resources section for Week 2: Foundations, Clarifying Your Difference gives you some questions to answer that touch on this topic.)
And now and then, allow an outside point of view to shake things up a bit! I’d love to hear about your experience with this — are there areas where you think you may be leaving money on the table?
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