How to Get Paid for the Value You Create
I came across a blog post from from Wil Wheaton (yes, that Wil Wheaton) that talked about an experience he had with some of his writing. The Huffington Post wanted to publish an essay he wrote, however, they were unwilling to pay him for his essay, rather stating that he would be paid by ” the unique platform and reach our site provides.” Wil later goes on to twitter and states the following:
Writers and bloggers: if you write something that an editor thinks is worth being published, you are worth being paid for it. Period.
— Wil SCREAMton (@wilw) October 27, 2015
I think his points are extremely well stated. Too often entrepreneurs, startups, small businesses, professionals, etc. will give away their knowledge and value without compensation. I know that I am guilty of that as well. I tell myself maybe if I do this service for a customer for free, them maybe they will pay me for other services I will provide them in the future since they know the value that I am providing them. There is a two fold problem with this:
- If I give my knowledge away for free, then I am implicitly telling my customers that my knowledge and services have zero value.
- Since I have previously valued my knowledge for $0, the client or prospect has no incentive to pay for that knowledge in the future or they are now trained that my knowledge has no value.
This is particularly hard for those who provide intangible goods (writers, programmers, etc.) and services ( lawyers, accountants, etc.). However, this needs to stop.
When we, as goods or services providers, create value for our customers, we need to be compensated for that value creation. Wil Wheaton could have had his essay republished by The Huffington Post so that he could gain exposure, but exposure does not put food on the table. The Huffington Post, by wanting to republish his essay, knew there was value to the words he wrote. They knew that if it was republished, they would gain site visitors and be compensated, as a content provider, by the advertising dollars generated by that article. They could have offered Wil a portion of the advertising dollars they would have received as compensation for the value he was providing.
So how do we go about ensuring that we are compensated for the value we create?
- We need to understand the value we are giving our customers. Since they are coming to us in need of something, the goods/services/knowledge they are request has a value in their lives.
- We need to explain the value of what they are trying to get. Leo Burnett, an advertising executive, once said “Don’t tell me how good you make it; tell me how good it makes me when I use it.” We need to explain the value we are creating for our clients and how that will impact them. Instead of selling a widget, sell what they widget does for them and the value the widget gives them.
- We need to price that value upfront. If we have done steps 1 and 2 well, we can then price the good/service/knowledge upfront and state plainly why we have priced they way we have. If I was able to explain the value I am creating for my customer with the widget I am selling them, they they will be more apt to pay for the value I am creating. For example, if I explain that my widget gives them $100 in value, I can then ask for a price of $25. If I don’t explain the value my widget gives my customer, they will them just compare my price of $25 with others in the marketplace and go with the lowest cost provider.
- We need to say no when we are not compensated for the value being provided. If the customer does not buy into the value we are creating or does not value what we are providing them, we need to say no and move on. No more giving away the value we are creating for free.
Not everyone is going to value the goods, services, or knowledge we provide. We need to spend our time creating value for those customers who do value what we are providing. By doing that, we will be better able to say no to those that don’t value what we are providing.