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How Do You Value?

Posted by on Sep 21, 2009

Today I had to take my wife’s SUV to Goodyear for an evaluation of her car battery. Turned out she needed a new one, and when the guy told me $190, I was in shock. He said that Hyundai’s used a particular kind of battery that was powerful, but cost more. Nothing I could do but go ahead and pay it.

At the same time, I happened to look up on the wall and saw that service per hour is now $94 per hour, and that shocked me also. I think the last time I had service anywhere other than my dealership, it was around $60 an hour, and at the time I thought that was kind of high.

Today, however, I started thinking about this concept of value just a little bit more. I wondered why I thought $94 an hour to pay for people to fix my car, which I know nothing about, is too high. After all, for my main business service in health care, I charge at a minimum $150 an hour to do what I do. Some hospitals pay it willingly; others balk a bit at the price until they realize just how much money I’m going to make for them. When you balance $15,000 against the opportunity to make an extra $1 million a year in revenue, it has to eventually seem like a pretty good deal.

Yet, it doesn’t always pay well. I’ve had some big years, but this year, with worries about a potential health care plan, as well as reductions to Medicare and Medicaid, I haven’t worked in that industry all that much. The people who would hire me haven’t quite figured out how to value what I do against what their needs are. When you don’t have a lot of money, and you’re not sure of what someone else tells you are guaranteed results, it’s hard for you to determine just what value really is.

I’ve suffered at times with trying to figure out how to price items I’ve created, along with some of the services I provide. Last week, for instance, I sold my very first Mitchell Manager Training Program online for $39.99. That bad boy is around 150 pages long, and I’m selling it for less than $40. Last year when I was talking with Lynn Terry about my ebook above, Using Your Website As A Marketing Tool, which I sell for $20 based on her recommendation of how many pages are in it.

In a way, this question of value is what I was talking about in my last post about writers lying when talking about secrets. They’re not offering anything new, just saying the same exact thing someone else has said before most of the time. There’s no real value in that; it’s just a waste of our time.

There’s also this thing about how we value ourselves, and how we value others. Value isn’t always about money after all. On my business blog in June, I wrote about a lesson my dad gave me on a personal value issue, and how I was glad to have learned such a lesson even though I was over 40 years old. I’ve also written there on how some people have either positive or negative values, and get to decide which direction they want to go.

So, how do you value yourself? How do you value your time? How do you value the worth of others and what they have to offer to you? How do you value your own products, or services, or anything else you have to offer or sell or even write on your blogs? It’s something to think about as you’re deciding how you want to write your blog, how you want to market your products, and whether the products other people market just might be something you may feel you’ll get some kind of value from.

And it’s something I continually think about as I work on this thing called affiliate or internet marketing. I don’t have that particular answer myself.

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30 Comments »

Las Vegas Homes:

Mitch, these questions haunts me every now and then. I always wondered how the value of “value” itself. Be it time, money, service or whatever you can add behind to it. There are times where I was easily tricked by the service personnel at my bikes service center. You will find it hard to believe, they took my existing working fine battery and replaced with a useless one and it took me more than 6 months to find it out. By that time the guy who did service has already quit from the job. I am glad that you paid for a working one 😛
.-= Las Vegas Homes´s last blog ..Commercial Real Estate Bubble =-.

September 22nd, 2009 | 5:30 AM
Mitch:

You know Mack, that’s something else I’ve always wondered about myself. Do some mechanics cheat you because they know you have no idea what they’re talking about? Does it happen in other fields also? Always those questions out there. Still, do we value our own time enough so that we don’t care about how those others might be doing us? I don’t really know.

September 22nd, 2009 | 9:41 AM
Mack@Las vegas homes for sale:

Mitch, there are pitfalls like these in almost every field. The most shocking things are in the field of medicine and health-care. We can be really geek with the support of internet on automobiles, computer fixing and other things. But what if a doc is suggesting you something and you have no clue about it.. I know its pathetic but we have nothing do except trust him. I didnt mean to say all of them are the same. Please dont get offended.
.-= Mack@Las vegas homes for sale´s last blog ..Commercial Real Estate Bubble =-.

September 23rd, 2009 | 4:30 AM
Mitch:

I’m not offended, Mack; I’m not a physician overall. But there’s a funny thing about people & health care bills. Everyone complains about the price, but almost no one ever calls the hospital ahead of time to find out what things might cost. One hospital set up a price transparency system and tracked it for six months. The person responsible for phone calls averaged less than one a day, and the information they put online, which was every price in the hospital, was visited only 3 times a week. And they did a big blitz campaign announcing they were doing it, so no one can say they didn’t know about it.

As for physicians giving you a diagnosis you don’t trust, you always have the right to get a second opinion.

September 23rd, 2009 | 10:11 AM
Annuities:

Hi Mitch,

That is how internet marketing works. Most of the customers pay for the page.

Thanks,
Steve

September 22nd, 2009 | 8:31 AM
Mitch:

True Annuities, but they’re often incorrect. Many 10 page pamphlets can deliver more information than a 100 page book.

September 22nd, 2009 | 9:43 AM
Jake:

I’ve been fussed at for this for years haha.. I always tend to do work for free or cheap! Especially computer work. I dunno why but I’ve always had a hard time charging people.

But, I did try and turn over a new leaf this year and started charging more people a reasonable amount. Enough to satisfy me, and enough to save them some money, compared to the local fix it shops..
.-= Jake´s last blog ..I Have Lost My Ability to Write! =-.

September 22nd, 2009 | 9:25 PM
Mitch:

Jake, I’ve been in business for myself 8 years now, and I still have problems in dealing with this type of thing. I’ve gotten better, but every once in awhile you let your guard down and that’s that.

September 23rd, 2009 | 2:30 AM

Mitch, just for interest sake I would get another opinion on that battery. Sounds like a tall story to me, and while you have already paid for it, I reckon it’s information worth having.

As to value, I reckon you will always get differing answers to a products value depending on who you ask. People like mechanics get to charge almost what they want because they provide an essential service. I used to work on my own car in the old days, but now about the only thing I would attempt is changing the oil and water.
.-= Sire´s last blog ..Sire’s Tale Of Johann Herbig The Man Who Lived In A Tree =-.

September 23rd, 2009 | 4:46 AM
Mitch:

At this point, Sire, the battery has a 3 year warranty, and hopefully that’s longer than my wife will have her current vehicle so it’s no big deal.

As to the other, we all do get different prices for our services. I’m assuming your family’s pricing for what you do is based on the market.

September 23rd, 2009 | 10:18 AM

It would be for me. I just don’t trust salesman, and I know from experience because I used to work with them. Still, each to his own, as long as your happy there’s no reason to take it any further.
.-= Sire´s last blog ..Sire’s Tale Of Johann Herbig The Man Who Lived In A Tree =-.

September 23rd, 2009 | 7:24 PM
Mitch:

I don’t trust many of these things either, Sire, but at this point, it’s paid, and I’m not going to go back to them and have them remove one battery and put in another. I don’t gripe about stuff like that unless I’m going to make a change.

September 23rd, 2009 | 8:20 PM

All I’m saying Mitch is that if it turned out they did overcharge you, armed with that information you may well take your business elsewhere.
.-= Sire´s last blog ..A Step By Step Guide Of Hosting Your WordPress Blog =-.

September 24th, 2009 | 2:17 AM
Mitch:

It’s Goodyear, Sire. Don’t y’all have Goodyear’s in Australia? Very well known national chain here, not a Mom & Pop operation. They may be pricey sometimes, but they’re legit.

September 24th, 2009 | 2:51 AM
John Dilbeck:

Good morning, Mitch.

You bring up some good points about how we value ourselves and how we evaluate the value of things we purchase from others.

If I charged you $2 per hour to work on your car I would be robbing you blind.

However, there are a few things I know how to do that I can give good value at $100 per hour.

The problem arises when others don’t agree. Just because I think I’m worth a certain value doesn’t mean the marketplace will agree with me.

After all, I can raise my fees to $1,000 per hour and remain a self-confident, but not-employed consultant.

If our self-value isn’t inline with the marketplace, we can hurt ourselves by undercharging or overcharging.

There are times when I have to fight this whole “what am I worth” issue. Sometimes I win and sometimes I lose.

Also, it is important that we make sure the marketplace we think we fit into is really the marketplace our customers think we fit into.

Partly, this can be evaluated depending upon our track record for good results and/or the value of what a customer can get from what we offer.

One group may be willing to pay hundreds of dollars for a short book, because we have proven the value of what we offer.

Others may not think it would be worth a free download.

Being in alignment with our target market is almost essential if we are going to get full value for what we offer.

(I hope this makes some sense. I’m still fuzzy headed and not thinking clearly this month.)

Act on your dream!

JD

September 23rd, 2009 | 6:10 AM
Mitch:

Hi John,

Glad to hear from you after such a long while.

Your thoughts about pricing are right no target. What’s funny, though, is that you will find some people who can change what others might call an exorbitant price, but they’ll get it. I’m sure you’ve heard of personal coaching. I do a little of that, and I have my little monthly fee that’s in line with the fees of most other coaches. Yet I know someone who pays $3,000 a month on coaching and believes she’s getting everything out of it that she demands for herself. And Tony Robbins supposedly charges $25,000 an hour for coaching, and gets it.

So, sometimes it’s about showing the value of what you do to get people to pay that price. And I’m working on figuring out how to get the word out like that every single day.

September 23rd, 2009 | 10:20 AM
John Dilbeck:

Yes, and the difference in the quality of the service (coaching, in this case) may be negligible between what many of us would consider the reasonable rate as compared to the very-high rates that some people charge – and get paid.

Some people have lots of money and enjoy spending it. When they pay a high price for something, it makes them feel better. That flush of enjoyment from spending may be even more important to them than what they’re buying.

I’ll never be able to charge the very high prices for what I do. I don’t have the personality for it, don’t want to live the required lifestyle, and would feel that I’m cheating the people who were willing to pay it.

I was raised in a family that got by okay, but there was never any excess money.

I might feel totally different about this if I were raised in an old-money family and most of my friends were wealthy too. I don’t know that for sure, but it would be possible.

I think there are a lot of factors involved in the total mix of how we value ourselves and how others value us.

It’s an interesting topic to think about.

Act on your dream!

JD

September 24th, 2009 | 7:47 AM
Mitch:

Hi John,

I find it interesting that you’d say this phrase: “would feel that I’m cheating the people who were willing to pay it.” You’ve captured the feeling of people who don’t feel their own worth in making a statement like that, and I think that’s a shame.

I know a guy who takes great images. He sells them on Imagekind. The thing is, the cheapest image he sells is $10,000+; yup, I typed that correctly. He believes he’s worth that much, and thus he prices everything that high. I asked him if he’d ever sold a single picture from the site and he said no, that he has plenty of money, but figures no one else will ever value his work if he doesn’t value it himself.

You’re right about the concept fo figuring out what people will pay for, but I’d hate for anyone to be walking around thinking they’re not worthy of anything. I feel I’m worthy of whatever I can get, whatever I can get people to pay me. That’s why I have no gripes about any athlete or celebrity who gets paid millions. I also don’t get mad at CEOs who get paid millions. If someone is willing to pay it, you’re worth it, plain and simple.

September 24th, 2009 | 6:24 PM
John Dilbeck:

Good morning, Mitch.

I don’t think it’s a shame. I believe that there should be fair value in all exchanges. If I’m perfectly willing to do something for $1,000 and someone offers me $20,000, why would I take the extra money?

Now, I grant that I’ve not faced that situation, but I’m pretty sure how I would handle it, and I’m also pretty sure that most people would disagree with me.

I’ll grant the possibility that I’m wrong. Maybe I do undervalue myself overall. I don’t know.

I don’t agree that the cheapest image he sells is $10,000 or more. He’s not selling anything, so the value of his photos in the marketplace is zero, or certainly less than the amount he would like to get.

He’d have to sell at least one at that price for it to have the value he suggests, and that would apply only to that one photo, not all of them.

I don’t agree with your last statement, “If someone is willing to pay it, you’re worth it, plain and simple.”

I just don’t see that as being true. Again, maybe I’m wrong, but it just doesn’t ring true to me.

Act on your dream!

JD

September 26th, 2009 | 2:39 AM
Mitch:

Hi John,

I don’t want to say you’re wrong, since it’s your belief, but I will say that, if you really believe in The Secret and what it talks about, then you realize that your thoughts are limiting your success because you don’t see yourself as being worthy of whatever people will want to pay you. If someone is willing to pay you $20,000 and you didn’t push it out there, obviously they feel what you’ve given them is of extreme value. Sometimes, others know our value better than we do.

I have to see that as true. I don’t want any limiting thoughts in my mind whatsoever. That’s why I never say I want to make enough to live comfortably, something they also specifically mention in the movie. I want to be rich; I say it out loud. I don’t identify what rich is all the time, but I’ll know it when I see it; I hope. 🙂

September 26th, 2009 | 9:46 AM
John Dilbeck:

Good afternoon, Mitch.

I might be wrong. I don’t know.

😉

Act on your dream!

JD

September 26th, 2009 | 4:01 PM
S:

You had me thinking there Mitch. I suppose it depends upon the person who values himself as much as he values his work or the services he offers. It’s vice versa; you’re not going to give something to someone not worth it when you don’t want to receive something beyond your worth.

October 27th, 2009 | 7:54 PM
Mitch:

Hi Jeff,

First, I have to point you to the new comment policy; I need a name before your keywords, otherwise I shorten it to one letter.

Second, you’re absolutely right; people who do value themselves give better value to others. Very good point indeed.

October 28th, 2009 | 9:47 AM

Sorry for that Mitch. I overlooked it the time I was reading your post. Anyway, I suppose it’s all the worth paying someone for the services given or the amount of such item if it’s of good quality.
.-= Jeff@Short Sales in Las Vegas´s last blog ..Hard times for Hi-Rise lender =-.

November 24th, 2009 | 1:47 AM

I’m constantly amazed by how little value is placed on items that are very difficult to make. TV’s and DVD Players for under $100 seems too good to be true. It really contrasts with the high cost of food and services.
.-= Geoff@San Diego Real Estate´s last blog ..Carmel Valley Luxury Homes Down =-.

November 2nd, 2009 | 5:59 PM
Mitch:

Geoff, I agree with your premise for the most part. The issue with tech things like TVs is that the range of prices is so drastic that sometimes we’re not sure who to believe. When I bought my HDTV, most of the prices for my size were around the same, so I felt I knew where to go. However, the Sony at the same size was about $500 more, and there was this one TV that was a 52″ that cost what I paid for a 42″. Sometimes you just don’t know.

But when it comes to services, I always believe people are worth whatever someone is willing to pay them for.

November 2nd, 2009 | 5:10 PM

Perhaps the quality of the TV or the actual pixels and color contrast differ? I’m not sure, but sometimes it’s the brand of the item we’re actually paying. Although they are all the same.
.-= Jeff@Las Vegas Short sale Agent´s last blog ..Hard times for Hi-Rise lender =-.

November 27th, 2009 | 6:57 AM
Mitch:

Hi Jeff,

I don’t remember the term, but I do know that the Sony had more “something” than the other TV’s, and the image was way better also. So, in that case it made sense. In some other cases, though, you’re right, it’s more the name than anything else.

November 27th, 2009 | 5:09 PM
Val:

As a base price, it’s sensible really to should work out how much is needed to live, expenses, etc, and take it from there, but that’s rarely the way we operate as so much emotionalism comes into valuing the work we do and what we’re willing to pay for the work and services we need from others.

I can’t speak for what I’d be willing to pay for healthcare as, here in the UK, we have a quite different system which includes (but is not solely) the NHS.

I have had this problem over the years of how to value my artwork, and I find it even harder now that I do digital art (which, by the way, is not the sort of digital work that most people are familiar with). When I was exhibiting my artwork (watercolours, mainly) originally, it was to people who could or would only pay a certain amount – if I’d asked more, I’d just not have got it. If I’d been the sort of artist who galleries had loved, then I could have charged almost anything and got it too. But my art, whether watercolour, sculpture, pen and ink, or digital, has never been the kind that galleries love and crave. Or maybe it might be now but I’ve only recently – the past year or so – got back into art after a very long absence, so I’m a touch out of touch. Those days – I could do a painting, get it framed, exhibit it and after a few weeks of the show, the buyer would go away with it under their arm… now I work in digital media there is no ‘original’ to speak of, it’s on files on my computer (and backed up elsewhere, of course!) So, trying to price prints is more difficult. I know digital artists who price way more than I could ever feel comfortable asking for a print (they say that Giclee prints are worth it as they are for collectors, but I’m still not convinced). And this, of course, comes under self-worth.

My sister is in the business world, like you are – and her idea of self-worth, despite our having been brought up in the same family, by the same parents, in the same culture as each other – is way different from mine. So I think a lot of it has to do with what one is surrounded by as much as anything else. If you’re surrounded by people who are all cheering you on to succeed in your given niche (as she is, mostly) then you probably do better than if you don’t have that sort of support network. For me, though, all that feels very very unnatural.

June 24th, 2010 | 8:44 AM
Mitch:

It’s a strange thing, this concept of pricing. In one way, if there are others who do what you do, then figuring out a price is much easier. But for things like you mentioned, art, or things like books and the like, it becomes a bit harder to figure out. A person might be willing to sell a book for $5 if they’ve hooked up with a major publisher that almost guarantees 100,000 sales, but if you’re an independent writer who knows you’re not going to make that much back, or in my case someone who paid to get prints of a book and now hoping to recoup at least that amount back, you’ll price your books or products differently, knowing you don’t have to split the profits with anyone.

June 24th, 2010 | 2:40 PM