Want To Make More Money? Do This.
When I first went into business for myself I asked the same question most business owners ask:
How do I make more money?
The reasons for this vary. In some cases, you need to survive. If you don’t make more money, you can’t pay the rent or eat. In other cases it’s not as dire but there are nice things that you want and you’d like to have enough money to buy them. Whatever the reason is behind it, most business owners and sales professionals are in the pursuit of more money. I remember a time when I was scrounging the couch cushions for spare change to pay for dollar pizza wondering why no one was buying what I had to sell and I can imagine that many new business owners go through similar scenarios. In the past few years I managed to learn a number of things about making more money, but one thing stands out more than anything else.
Understanding what others value is the key to making more money.
Now I don’t claim to have it all figured out by any means, and I myself still have my own struggles, but I probably wouldn’t be in business at all if I didn’t eventually accept this idea. So how does it work?
You may have heard the term “One man’s trash is another man’s treasure” In the business world, it goes something like “One man’s nice to have is another man’s need to have”. Simply put, different people value different things often based on their own experiences and they are willing to pay higher prices for certain things. Your ability to communicate that value and understand it from the side of the person buying is the most important ability you can develop for your business. In the startup world, there’s this concept known as customer development which I was introduced to by my friend and author Mike Fishbein. The idea behind customer development is that you go and actually speak to people who might buy a product before you go out and make the product. You ask them questions about the value of the offering and what they’d be willing to pay for something like it. This gives you a ton of information about what you have and what features you should focus on. It seems like such a simple idea, but everyone is in such a rush to make more money, that often they just put up a shingle and slap a price on something and many times wait. Now sure, some people get lucky and hit on an idea that blows up and makes them a lot of money, but that’s not a viable business plan. So how can you put this to work for yourself today?
Start by asking what the value is of the service you provide rather than the price. Does what you do save someone time? make them more money?, make their life more enjoyable?, stop them from feeling pain? Etc. If so, what is that worth to the customer who you are serving? You may be surprised when you ask people what a service is worth to them. The results they get have a certain value and that can also help you get clear on the pricing and the offering. For example, if they do a workshop with you and after using what they learned in that workshop, secure a 50k contract how much should they pay to do that workshop? It’s an interesting question, right? The easiest thing to do is to put something out there and when no one buys just say that what you created isn’t what the market wants. The hardest thing is to dig back in and find what the value is and figure out how to communicate it.
When someone doesn’t make enough money on something it has more to do with how they communicated the value than how they priced it.
If you want to make more money, you totally can, but there is hard work to be done beyond creating your product or your service. You also have to find out what people value. It takes time and effort, but once you find that out you’ll be amazed at the things that happen.
So take a second today to ask yourself if you have had an honest conversation about value. Do you understand what the people you’re selling to value and what they actually are willing to pay for?
The better you understand this, the more money you’ll make.
Try it and let me know how it goes.