Knowing Isn't Doing

I've been telling him this for months.

He's a guy who builds massive, complex installations.

The kind of projects that cost hundreds of thousands of dollars.

And because he's a good guy, because he wants to be helpful, he has this habit of trying to give people a "deal."

He'll look at a proposal and think, "I can cut my margin here. I can do this for a little less.

I want to do them a favor."

I've been telling him it's a mistake.

But you can't just tell someone a lesson.

They have to feel the pain of it first.

This week, he finally felt it.

He came to our session and said, "I finally get it. Doing people favors is bad for everybody."

Here is exactly what happens when you decide to do someone a favor and cut your price.

You sell the job for less than it's worth.

You feel good about yourself in the moment.

You're the hero.

You gave them a deal.

But then the reality of the execution hits.

You get into the project, and you realize you didn't budget enough.

You realize you need a better cable.

You realize you need to do an upgrade to make the system run perfectly.

But you can't.

Because you cut the margin.

The money isn't there.

So you cut a corner.

You do it half-done.

You use the cheaper part.

You rush the labor.

By the time the project is over, you resent the work because you didn't make any money.

And the client ends up with a sub-optimal result because you didn't have the resources to do it right.

You thought you were doing them a favor.

But what you actually did was guarantee that they wouldn't get your best work.

This is the hardest lesson for service providers, consultants, and business owners to learn.

Charging what you are worth is not greedy.

It is the only way to ensure that you have the resources, the time, and the mental bandwidth to deliver excellence to the client.

If you are cheap, your execution will be cheap.

We looked at his pricing model.

He was selling equipment at a massive discount, thinking that was his value proposition.

I told him to unbundle it.

Your value is not just that you can get them the equipment.

Your value is that you know which equipment to get.

If they tried to buy it themselves, they wouldn't know what to build.

That knowledge, the consulting, the expertise, the design, is worth money.

So stop bundling it for free.

Charge a fair price for the parts, and charge a separate, premium price for the expertise.

When you do that, two things happen.

First, you make the money you actually deserve.

You stop leaving thousands of dollars on the table out of some misplaced sense of guilt.

Second, and more importantly, you guarantee the outcome for the client.

When you are paid well, you can afford to buy the right cable.

You can afford to take the extra day to make sure the installation is perfect.

You can afford to deliver excellence.

A discount is a compromise.

And a compromise is never a favor.

Stop doing favors.

Start doing excellent work.

And charge enough to make that excellence possible.

• Where in your business (or your life) are you currently cutting your price or undervaluing your time to "do someone a favor"?
• Has giving a discount ever forced you to deliver a sub-optimal result because you didn't have the resources to do it right?
• If you unbundled your "product" from your "expertise," how much is your expertise actually worth?