Welcome to Mo’s Letter, a weekly publication by Dr Mo about social media, business strategy and career development. Today’s post is about pricing.
We’ve all seen it.
Someone on social media posts a few pictures of something breathtakingly beautiful. An outfit. A photo they shot. Some furniture they made.
Amidst the chorus of praise in the comments, a few voices inevitably ask: “how much?”
And under each such comment, the budding entrepreneur invariably responds: “DM for prices.”
Cue groans, eye rolls and the sound of money leaving the room.
Today, I’d like to address that entrepreneur.
Why do you do it?
Some people will say it’s down to lack of transparency. They’ll say business owners want to charge people different prices based on their names, backgrounds, skin colour, or how nice they’re dressed in their profile picture.
I’ve personally experienced this in real life. Recently, in Johannesburg, I walked into a ceramics shop and asked the guy for the price of one of his stunningly crafted mugs. The man looked me up and down before quoting me an eye-popping price.
When I casually called him out on his visual pricing strategy, he conceded that making a living from art is hard, and you have to get as much profit out of your art as possible. Sometimes, he said, that involves making snap judgements on affordability based on superficial factors.
“I see you’re well dressed,” he said, “so in my mind, you can afford a higher price.”
Obviously, this isn’t ethical. We should rightly call out such deceptive practices. But sometimes, in real life and on social media, I look at the object(s) being displayed, and the praise the artist is getting, and I understand why they might hide their price.
You’re afraid that these nice people, who really love your work and seem like they want to support your business will run away once they hear how much you’re charging. You’re afraid they will think you are too expensive. You’re afraid other people reading the comments will be put off.
So you do damage control. After all, if they really like your work, they won’t mind searching for your Page and sending you a DM, right? I mean, if you can just talk to each person privately, you have a better chance of making a sale, right?
To you, it’s a good strategy. To them, it’s highly frustrating. And to your business, it’s damaging in the long run.
Why you’re shooting yourself in the foot
Hiding your prices causes two problems:
- It ensures you will keep getting the same question forever; and
- It passes up an opportunity to establish your value right from the beginning.
Let’s pretend you’re a skilled joiner who has spent many years learning how to create stunning pieces. You work hard and you are immensely proud of each piece. You also love showing off your work on social media, as the praise you get encourages you to keep making stuff and the money you make sustains you.
Why, then, are you ashamed of putting a price on your work? Do you think you’re not good enough? Do you think people won’t see the same value in your work that you do?
If so: Why do you continue entertaining such thoughts?
Price your value
When you ask people to DM you for prices, all we see is someone who doesn’t know how much they are worth. That’s not a good look for your brand.
By not stating your prices publicly, you’re chasing away the very customers who are ready to pay for your work.
I’m not going to DM you the same question just so we can play Price Ping-Pong in your inbox. It shows you don’t respect my time; but most importantly, it shows you don’t respect yours.
Think about it: When I walk into a Ferrari dealership, I expect the cars to be expensive. I know that if I ever want to own one of those fast horses, I better pony up the money and be financially stable enough to survive the transaction.
I don’t waste my time asking about prices, because they’re all on display. And they don’t waste their time haggling with me, because they know what they’re worth.
The following tip will serve you well in life:
Focus on those with the money
Don’t bother with the ones who think you’re too expensive. They were never going to pay your price anyway.
They complain about your price because they don’t know how much it costs to do what you do. They say things like:
- “That much money just for this?!”
- “It won’t even take you that long!”
- “I know someone who does it cheaper”
Your job is not to educate them.
If you’ve priced your value well, those who can afford it will contact you. And after spending money on your work, they will love it even more because they’ve invested in it.
And they will recommend you to others who would love your work and can afford it. And those clients will pay, and love your work, and recommend it to others just like them, too.
See how it goes?
But if you’re jerking your dream clients around by sending them from pillar to post, you’re shooting yourself in the foot. Remember: Those who have money to spend don’t have time to waste. They can easily take their money elsewhere. So respect their time and respect your value.
A better way to say it
First, figure out how much you need to charge to break even. Then, recognize that the final price may change due to many factors.
Let’s go back to our joiner example.
- Say a client loves your coffee table, but they live far and need it delivered. This will raise the price.
- Maybe they love that cabinet you posted, but they want it in a different colour. They know this will cost more.
- Maybe they like that pattern, but they want you to apply it to a TV stand, or a dinner table, or some royal chairs for their secret sex chamber. That’s extra wood and lube. The price goes up again.
So, how should you respond when people ask for your price?
“Prices start from X.”
Four words. Instant meaning.
By responding that way, you’ve priced your value and clarified that the final figure is flexible. It also prevents you from constantly repeating yourself in the thread. Those who can afford your price will reach out to you. You have to trust this.
Those who can’t afford it will continue ooh-ing and aah-ing under your posts. That’s fine, too. Keep nurturing them; they will be your clients one day. Those who were never going to pay you will say stuff like “Eish, can’t you do half-price? Money is tight, man.”
Here’s how you respond to such people:
“I’d be happy to recommend you to someone else.”
Boom. In one sentence, you’ve let them know that:
- You’re aware of your value
- You won’t budge on your price; and
- You’re willing to help them find the same product elsewhere (if it exists). No hard feelings.
More often than not, they’ll get the message. They’ll either pay your fee or kindly excuse themselves. Either way, you win.
In hard times, it can be tempting to lower or hide your price just to win business. I get it. But in the long run, you’re harming yourself and your customers by doing that. How?
If you hide your prices, you won’t get (the right) customers. And if you can’t make money, you’ll go out of business.
So when you state your prices publicly and stand your ground, you’re actually protecting them. You’re saying:
“This is how much it costs me to bring this to you. I’m charging this price so I can eat and afford to keep serving you.”
It’s in everyone’s best interests.
- Price your value and respect it.
- Focus on those with the money.
- Be upfront with your prices so the right clients can find you.
And trust that people will pay for your work.
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Mohammed Shehu, Ph.D. writes on marketing, content, and tech for fast-growing B2B clients. You can find him online @shehuphd everywhere.