Last week I told you how my friend Greg Tan of New Leaf Designs had sent me a hand written note thanking me for a referral. What I didn’t tell you was the note was done in beautiful calligraphy which made it really stand out.
Greg and I caught up a few days ago and he told me a very interesting tale about getting out of your own way. I think you’ll find it instructive.
Writing the note to me was the first time Greg had picked up his calligraphy pens for a long time. He remembered that calligraphy was something he really enjoyed doing, so when the opportunity came to take a stand in a local fair he jumped at the chance.
Greg’s aim was to “simply get his name out there” by giving away free bookmarks with people’s names on them.
And this is where it gets interesting…
A couple of years ago Barbara and I did a marketing and business strategy session with Greg and his oldest daughter. While we went through a range of business building strategies, the main takeaway for Greg was to value his service more. He’s excellent at what he does and was frankly far too cheap.
I’m happy to report that over the next couple of years Greg did significantly increase his prices and had no drop off in clientele.
By the way, this is something we tell all our clients to do… Check your prices and see what the market will bear.
But back to Greg.
One of his son’s who’s around 15 and a real entrepreneur on Ebay said to Greg, “There’s no way you should be giving this away for free. You do great work and people should pay for it. After all, the stand and being at the fair is costing you money, not to mention the blank bookmark stock.”
Greg’s response? “How can I charge for something like this – no one will want to pay.”
Kids prevailed and Greg put up a sign saying $1.50 per personalised bookmark.
And the people came. In fact the queue got so long, there was a 45 minute wait.
So they put the price up to $2, then $2.50 and $3 and still they queued.
By now is was mid-afternoon and Greg was starting to run out of bookmark stock.
So his son said, “Raise the price to $5”. “No way I can do that – no one will buy!” “Do it anyway.”
The next chap walked up and asked “How much?” “$5”, replied Greg. “I’ll take three”.
Which goes to show, “price is elastic” and you sometimes have to get out of your own way.
Greg realised something important that day. He knew he struggled with pricing and how much he could charge and what people would perceive as value.
And he realised it’s often better to have someone else who’s not emotionally involved in the delivery set the pricing. And to keep raising it until the market tells you to stop (by sales plateauing).
Pricing is all in your head. It’s a mindset game which will determine what you think you’re worth. Then go out and test it. You may be very pleasantly surprised at how much more profit you make!
Greg, like most of us needed to be “given permission” to charge and then put his prices up. His kids coached and pushed him into realising that just because it’s fun to do something doesn’t mean it has no value to someone else.
So if you find yourself in a similar position, don’t sell yourself short. Expand your comfort zone and get paid what you’re worth. More on this next week…