What’s the difference between value and price?
Lately, I’ve had lots of similar conversations with smart, up-and-coming businesswomen. They’re confused between value vs price – they’re trying to work out how to align their value proposition with what price they should charge.
It usually goes one of two ways. Either there is a price misalignment where the service provider feels they are worth X amount but the client doesn’t agree and believes they’re worth a lot less. Ultimately, this usually means the business is lost.
There will be a service provider who has really amazing skills, ridiculous amounts of talent but lacking in the confidence to put the right price out there. They usually get taken for a ride by a happy client who has landed themselves a bargain.
Both situations are problematic when trying to grow a business.
Let me share a couple of tips for valuing yourself and your work and having the courage to price yourself accordingly.
What’s the difference between value and price?
Warren Buffett was famously quoted as saying:
“Price is what you pay; value is what you get.”
Value vs price is about working out your value proposition and understanding how to align it with pricing your offer.
What are you worth?
First, let’s talk about self-worth. There is a lot of talk around mindset at the moment, especially in terms of self-worth and how we need to value ourselves more and feel more confident.
I really believe self-worth is at the heart of being successful in business. At my ripe old age, I have come across a lot of successful people and the common factor I see is a lot of self-worth.
This doesn’t mean you have to over inflate yourself or be on Instagram Reels every day to charge the right price.
It means that you understand your value and have properly described it in your offer. Your potential client understands the quality of service you’re providing.
So, how do you evaluate what your worth is, especially if you don’t feel comfortable talking yourself up?
You need to get comfortable with it!
Remember, this is not about bragging or big-noting. It’s about recognising the value of your:
- qualifications, and
So here are a few things to think about:
- Are you telling your client how qualified you are?
- Have you described how much work the project involves?
- Have you outlined how much value you’re offering in your package?
Was it the Keynsian economic concept of Supply and Demand that we learnt all about at uni? Well, anyway… Supply and Demand always wins out. Clients will pay what they think you’re worth, not necessarily what you are ACTUALLY worth.
How are you packaging yourself?
Next thing we need to consider how we are packaging ourselves up to ensure the demand is high, and the supply is low.
This is where you need to make sure you describe your offer in a way that increases demand and limits supply.
You need to make your offer so enticing so your future client snaps it up before the price goes up! 🙂
How can you entice your ideal client?
When you’re working out the difference between value and price, you also need to consider the psychology of pricing. How do we get the client to connect with the offer? Does the offer seem irresistible?
Often, we ask ourselves:
- Does the value proposition reflect the price I’m charging?
- Does the price reflect the package I’m offering?
And often, the answer to both questions is no.
So, let’s expand on the questions:
- Does my potential client have the capacity for the package I’m offering?
- Is there a pricing structure that I can offer a client to entice them to consider my offer?
- Can I describe my offer to encourage a ‘would you like fries with that’ response from my client?
Giving your client a couple of options rather than a one size fits all approach can help. This shows flexibility and ultimately, you’ll be able to avoid an immediate NO response.
Here’s an example. You offer a basic offer for $X = A, B + C services.
You have a deluxe offer for $X + 20% = A, B, C, D + E services (The secret is to make this offer irresistible)
To get the price you want, you need to show your value
Once you have figured out your value, you need to make sure it’s visible on all of your marketing collateral.
You should feel confident to share information with any future potential clients through your digital and social channels.
Include things like:
- How long you have studied.
- The number of years of experience you have in your field.
- Some great reviews from happy clients.
- Some examples of your work.
You need to make sure you share this information across your social and digital channels, whether it’s in posts, banners or bios. It might even be a frame around your social profile pic.
The aim here is to convey the message that you are a highly valued service provider.
If your pricing reflects enormous amounts of value, your future clients won’t be able to resist!