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Did You Think About This When You Set Your Prices?
I have two questions for you:
Pay close attention to how you answer each one, okay?
How much would you pay to hear me recite poetry for an hour? _____
(Mentally fill in the blank with an answer.)
Got your answer? Onward:
How much would I have to pay you to come listen to me recite poetry for an hour? ______
(Go ahead….give me a number.)
You might be onto my point already. But first, the science:
Respected behavioral economist Dan Ariely asked his students these questions.
The first half of the students, the ones who were asked how much they’d pay to hear him, said $1-4.
The second half of the students required $1-5 to have to sit through his one-man poetry show.
Let this sink in.
Ariely was (fictionally) offering to do the same thing in either case: Recite poetry for one hour.
But the way he posed the question determined whether he’d be in the red or in the black on this thing.
And in the real world, if he were truly doing this – what would determine the way he asked the question?
Probably – the way he felt about his own poetry reading.
The way he thought about his own abilities, the way he valued his own performance would determine, to an astonishing measure, what his outcome would be.
And guess what?
This is probably true for you, too.
Okay, so you’ve probably never offered to pay other people to sit through something you offer.
But in your own mind, have you ever felt that way when you were talking to people?
A mental “Just come hire me….I’ll pay you…okay no I won’t it works the other way around…but really really really please come.”
(I mean, would you eat at a restaurant if you got that vibe from the owner?)
Or have you ever accepted a lower payment, or offered a truncated version of what you do because deep down, you thought “well I’m still making some money on this thing…”? Because you were kinda still amazed you were getting paid at all?
Have you ever offered a free service to someone and then felt crushed when they didn’t take you up on the free offer? When in fact, the mere fact that you offered it for free might have changed how they thought about it?
The way you feel about your own service leaks into what your customers see and hear.
It can affect your posture, your willingness to negotiate, your energy, the determination with which you pursue next steps, even whether or not you jump on marketing opportunities.
So hear this: If it’s worth your time to do, it’s worth doing well.
And once you do it well and you’re ready to offer it to someone, expect that they are going to fork over that $5 to sit in the front row while you blow them away with Wordsworth and Browning. Or whatever it is you do.
And if they don’t, you don’t need to feel badly. Just like the Rolling Stones wouldn’t need to feel badly if they did a reunion tour concert in your town and you didn’t go. Not everything makes everyone’s heart beat faster, and that’s okay.
Your existence is not a burden on others.
You being in business is not an infringement of other people’s space.
It’s something that they can choose to let improve their life, or not.
And no, I’m not suggesting that you can arbitrarily charge a million dollars and expect people to show up tomorrow.
But don’t ever forget:
There is some inherent allure in seeing someone who actually believes what they have is worth exactly what they charge.
Even if you change nothing other than the way you think about your own service, you might find that it changes everything else.
P.S. Hat tip to Spencer Lum for sending me the Ariely study.