Confusing worth vs value | Cheryl Clendenon

In our world, the value of a service is determined by the perception of the value commensurate with a client’s needs, wants and emotional attachment.

Confusing worth vs value | Cheryl Clendenon

Across many industries, there is a consistent refrain entreating professionals to “charge what you are worth.” While this is a nice sentiment, the word choice indicates a misunderstanding of marketing intangible intellectual property and the subjective theory of value. In our world, this means the value of a service is not determined by the deliverables of the services as much as it is by the perception of the value commensurate with a client’s needs, wants and emotional attachment.

The client does not care what you are worth
The client cares about how your value will benefit them. Your intellectual property is only valuable to those who are willing to pay for the transformation you will make in their lives in some way or another. This is often why predetermined methods of charging fees such as hourly pricing or square-foot pricing do not increase profits over time and contribute to the plateau many firms reach trying to scale to the next level.

You cannot “charge your worth” until you first determine the value for that specific client you hope to land

For example, you can be a brilliant technician with construction drawings. You consider your “worth” to be X price. However, if a client does not need detailed construction drawings and is simply looking for an interior décor consultation, the client may not “value” the price you charge. It does not mean you are worth any less, but highlights the fact that value is subjective and that client at that time does not want nor need the value you bring. It does not make him a bad client, just not the right client for you.

Or consider the basic umbrella. It has an intrinsic worth — perhaps the price you paid for it. But the value is immense when you are on the way to a fancy party and it suddenly starts raining. In this case, the umbrella’s value can be quite a bit more than the price you paid for it. The umbrella is solving a problem at a particular moment in time. In the design industry, this is the same, albeit a bit more complicated, and dynamic.

This concept can be applied to retail sales of products, too

If you are competing on price, you might be losing to online sales or big box stores. Your product may be “worth” the lowest price a customer can find it for, but the “value” you bring to a local shopping experience can command a higher price — but only if you are marketing the experience and creating added value for the consumer.

Anyone trading in intellectual property can have both worth and value

The trick is to channel your marketing genius to demonstrate your value to the right person at the right time, so that a potential client’s perception of your value equals what you feel you are worth.

This means analyzing your marketing for disconnects such as showing features over benefits, not talking to your ideal client, or positioning your skills in such a way that is more about completing tasks and less about solving problems.

Remember, worth is focused on how you perceive yourself. Value is focused on the client’s perspective

Saying you charge what you are worth is great for self-confidence but is not a good marketing — or pricing — strategy because it treats your intellectual property like a commodity. Commodity pricing does not align with perceived value from clients looking to find the right professional to help them.

Shifting your focus from what you believe you’re worth to understanding and communicating the value you provide will align your marketing strategy with their needs. It also paves the way to greater profitability. Success lies in perceiving value in a client-centric manner and delivering it in a way that solves their problems.

Cheryl Clendenon owns In Detail Interiors, a full-service design-based retail showroom in Pensacola, Fla. She also consults with and coaches other small businesses and interior designers, and writes HAT’s “Retailer to Retailer” column every month. cheryl@indetailinteriors.com