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.

Want to use this article? You can as long as you include this footer: Sherri Garrity is the Chief Corporate Fugitive and creator of the Five Keys Success SystemTM for ex-corporate employees and aspiring entrepreneurs who want to break free from the confines of their corporate experience and live outside of the ordinary. The Corporate Fugitive system demystifies the business of setting up, managing, marketing and growing a successful and extraordinary business. Visit www.corporatefugitive.com for information and step-by-step resources to take you from overwhelmed employee to extraordinary entrepreneur.