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Money Matters: Are You Low Cost or High Value?

I was chatting to a friend the other day who has recently opened her own business.  In fact, I was buying some of her services.

When it came for the time to hand over the money, I was surprised by how little she was charging me.  I used to use her services when she worked for another company, and was used to paying much more.

I asked her why she wasn’t charging her usual rate, and she answered that she didn’t feel she could command those prices anymore, due to just starting out on her own.  In my opinion she is undervaluing herself.

You see many of her regular clients, such as me, have followed her to her new enterprise.  But she is now scared to command the same rates as previous times, as she is now responsible for providing her own income.  It’s a trap that I see many times over with new entrepreneurs, and one that I made myself.

You so desperately want new customers and to generate some revenue, that you “prostitute” yourself and take whatever will come your way.  You’re not choosy about where the money is coming from, as you just desperately need to get away from the fearful feeling that has become part of your life, since you started out on your own.  Money is money right?  Wrong.

There are people out there with the money to pay what you are worth.  If you position yourself as low cost, then you will attract a client who has no loyalty, because they are always looking for the best deal.  The only way you can get their loyalty is to buy it:  to lower your price or offer further discounts.

Would you rather be known for being low cost, or high value?  You can choose.

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About kimconstable

I am Kim: mum to the gorgeous Corey, Kai, Maya and Jack. I own and run multilingual children's company (www.rainbowgardenni.co.uk). I am passionate about ethics and upholding humanitarian values through education. Above all, I am a people person. I love human to human marketing and am insatiably curious about what drives us to do what we do and be who we are. Thank you for reading my blog. You matter to me.

3 responses »

  1. excellent point. When I was shopping for a new employer a little while back some friends of mine were blown away at the $$$ value I was demanding. I went to a number of interviews and was told point blank that they believed I was well worth what I was asking for, but their budgets did not have room for that kind of expense. I left feeling just fine and did think about lowering my asking price.

    In the end I found a company that knew what I am worth, and was willing to pay for it. I am glad I did stick to my guns.

    Reply
    • Congratulations Anton! I love hearing that. It’s great that you were confident enough to stick to your guns and charge what you are worth. It’s also wonderful for your self esteem. Thanks for taking the time to comment.

      Reply
      • I think for me it was more a matter of not being willing to sacrifice my families standard of living for my desire to change my career direction.

        At the same time I think I am worth a lot more. I only asked slightly higher than what my competition would have been looking for. Still it is no where near as much as I expect in the coming years

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