On to a bit of a controversial topic today.
Yesterday I shared how I started in copywriting at $15 per hour. Today I want to investigate what makes people pay $400 or more per hour for my time nowadays.
First, it’s important to note that only the right people will pay the right price. As I said over and over, your market dictates the rules.
But what makes these people value our services and products soo much more?
Entrepreneur Alex Hormozi has a great model for thinking about value:
Value= (Desired outcome x likelihood of achieving it) / (time it takes x effort or sacrifice required).
So first it’s important you nail what people want (their desired outcome). That’s your value proposition. Without a specific and compelling one, you’re doomed.
Second, the likelihood they’ll achieve that outcome. That’s dictated by your experience, proof and authority. Reason why I would charge $15/hour seven years ago and why I charge way more today.
Outcome and likelihood are counterbalanced by the time it takes for people to achieve it and the effort they will have to put in. This is how you phrase the unique value your product or service offers.
The less time and effort it takes my clients, the more they will pay.
I would charge $400 /hour for done for you work, but I’d charge way less for a course (also the course would require much less of my time).
If you think of it in these terms, it’s pretty easy to see why some of the millionaire entrepreneurs would charge unbelievable sums for their time. More often than not, you can’t even buy it.
They amassed so much proof and authority in helping others achieve their desired outcome, that time and effort are not even factors you’d consider.
It’s like that story about a woman who approached Picasso in a restaurant, asked him to scribble something on a napkin, and said she would be happy to pay whatever he felt it was worth. Picasso complied and then said, “That will be $10,000.”
“But you did that in thirty seconds,” the astonished woman replied.
“No,” Picasso said. “It has taken me forty years to do that.”
And it’s why when I spend a couple of minutes looking at a website for someone I get these kinds of replies.
Sometimes I feel guilty! But it’s simply because we, ourselves struggle to see and value the intangibles.
The wrong people too (like the woman with Picasso), won’t see and won’t think about the intangible value you bring to the table.
But the right ones will and will gladly pay for them.
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