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If you had to charge ten times as much

This is such an interesting question because it asks for ten times, not twice as much. 

Asking for twice as much can trap you into thinking: 

  • I will work twice as hard! 
  • I will double the quantity of whatever I am offering! 
  • I will simply increase my prices, lose a few customers but keep the premium ones. 

None of those strategies really work when you need to charge ten times as much. Something else needs to change.

I have not found the “right answer” to this one, just yet.

But somethings are obvious:

I cannot work ten times more hours or put in ten times the effort. With 24 hours on any given day, that is simple, not possible. 

Ten times the quantity may also not be possible, not to mention that the customer may not be interested in that much more quantity. 

So what can it be? 

On the same airplane, different people pay different prices. And yes, you can find a ten times difference in tickets. The same plane does not fly farther, does not fly faster, and does not land in a luxury airport for those who pay a premium. So what exactly do they pay for? 

In the software industry, given the same project specs, you can hire developers on a wide range of prices. The specs don’t change, so the end result should be the same, so why the different prices? Why is a developer more expensive than the other. And why would a customer choose to pay for someone who charges ten times the lowest price on the offer? 

A possible, but lazy answer is status. If you care that a “Google Developer” worked on your project, you will pay to be able to say that, even though a “less famous” developer may have done the job. Beyond status, this can be a marketing signal as well. When you sell this service, it may be worth it to your customers to know that a “famous” developer worked on it if that signals quality.

Trust may be a better answer. I don’t think you can trust someone “ten times more” than another person. Still, you do have a definite feeling that you can trust person A but not trust person B. 

And if trust is essential to my business, then person A can successfully charge ten times more than person B. What is the value-added to justify this increase? In the moment, probably none. But in an environment of clickbait and shady practices, person A has spent valuable time, resources, and emotional labor to prove trustworthy. Their reputation is their asset that you pay for. 

Going higher on the “better” scale, you may have to change the people you serve. If you are a high precision car mechanic, that will not matter if all your customers want from you is to fix their headlights. You may be fast at it, you may be precise, but it will not matter. You will not be able to ask ten times more for your services in that crowd. You need to find a different crowd, likely a smaller crowd, looking for that particular skill. To them, it will make sense to pay you ten times more, because the value they get out of your work is twenty times more. For them, you will still be a bargain.

On the same level with “change the people you are serving” can be “change your story.” In fact, the two go hand in hand and influence each other. If you sell a commodity, you have no choice but to join the race to the bottom. The alternative is to trade in emotions. To transform fear into belonging. For that, you need a story. You need to stand for something. To serve people at the edge, that everyone else has overlooked. 

For “regular” people, water is free. For someone stranded in the desert, water is priceless. A way to charge ten times more is to find people who are thirsty and then create the product or service that will satisfy their needs. 

Charging ten times as much is scary because it usually means you need to change and sometimes in dramatic ways. Letting go of the old clients is not easy. Letting go of the old product or service feels frightening. What if you are wrong? And we arrive at risk. Those who play it safe always find themselves in a crowded place. Setting out to sell water in the desert does not mean you will also find someone there. 

How about you? What would you change if you had to charge ten times more? 

Building Trust

When I want to learn something, there are usually hundreds of resources available for that topic. Or if I want to buy a product, there is generally more than one option available. 

So how do I make my choice? 

For a while, I thought that I am considering benefits versus price versus quality. I imagined that I am making a rational decision. 

But that is not so. 

Someone was also looking to learn about a topic, and they ask me about it. I told this person that there are likely many people on YouTube, teaching this way better than I ever could. But they did not want to learn from YouTube; they wanted my perspective and guidance on it. 

I wondered why they would make this choice, when, at least in my mind, I was not the better option. 

And it comes down to trust :). Very simply put: they know me, they trust me, and they like me. And they would prefer I show them what they need to learn, rather than some stranger on YouTube that they have no connection to. 

Considering this, I realized that I do the same. I don’t act rationally at all. I much rather work with people I know, and I trust, even if they are not always the “best” at what I am looking for. When there is a connection, things are much easier. 

Trust, connection, and familiarity sound like very personal concepts, but they apply in business. Each action that you take as a business can build or erode trust. And in today’s world of “clickbait” and “shortcuts,” trust is ever more scarce

Building trust takes time. It requires empathy, the emotional labor of truly seeing the other, and serving your customer even if that means sending them to your competition. Yes, you may have lost a client, but you gained trust. 

It also means keeping your promises even when it is difficult to do so. Especially then. And it means being open when you do break a promise, owing to the situation and not trying to hide it. 

On a related note: online reviews are a tool that we sometimes use to determine if we can trust a vendor that we don’t have a relationship with yet. 

This tool gives power to you, the consumer. You can express your gratitude at no extra cost to you by writing a praising review for the vendor. But you can also be vengeful and write a bad review. And we all know that bad reviews weigh more heavily than the good ones. For some reason, we feel they are more “honest.” So wield this power wisely. 

Be generous with it, and don’t abuse it. Online reputation is hard to build and very easy to destroy.