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The Humane Marketing Show. A podcast for a generation of marketers who care.

100 EpisodesProduced by Sarah Santacroce, Entrepreneur, Humane MarketerWebsite

We've had incredible guests such as Dorie Clark, Mark Schaefer, Ian Brodie, Beth Buelow, Denise Wakeman and others share their inspiring journey.

14:23

Calculate Your Worth

This episode is part of a 12 days of Christmas read-along of the Selling Like We're Human book, recorded in 2021.

The book follows a similar concept to what you're already used to here on the Humane Marketing show with the 7Ps of Humane Marketing and the Marketing Like We're Human book: we start with the being and then go into the doing.

The 3 parts of the Selling Like We're Human book are : Being, Knowing and Doing (compared to Rumble, Rise and Resonate of the Marketing Like We're Human book)

Today I'm reading a small section of Part 2 on KNOWING, Chapter 6 called 'Calculate Your Worth'

 

 

Excerpt from Selling Like We're Human, Part 2: KNOWING, Chapter 6: Calculate Your Worth

 

Time Is money. Or Is It? The reason why many of us don’t like selling is because we are not comfortable discussing prices and investments. There are many reasons for this, society making money a taboo being one, our own uncertainty about our prices being another one. But if we have worked on our Unique Value Proposition, we have a good idea of the value we deliver. This information now helps us calculate the monetary compensation we’d like to ask for in exchange for providing that value. In order to get to that number, let’s look at some different ways we can price our products or services. Four different strategies come to mind: 1. Hourly Despite being the most commonly used, hourly pricing has its limitations. While it’s useful to benchmark your fees in the market, it’s also less than ideal to convey the value of your offering. Your offer is more valuable than the exact amount of time you’re spending with the client. For example, Cathlin offers a group coaching program in which participants get to spend one hour on Zoom with her per week. The program also comes with self-study material such as video tutorials and worksheets. The value that people are getting from this program is much greater than just the four hours on Zoom per month. 2. Cost Cost-pricing is common among retailers. For example, the keystone pricing method simply doubles the wholesale price. This pricing method provides an easy starting point that is likely to ensure some profit. Since this book is mainly read by service-based entrepreneurs, one could think cost-based pricing doesn’t apply to us. But not so fast . . . You do incur costs to run your business, don’t you? Your phone, printer cartridges, gas for your car, etc. Let’s not forget to calculate these costs into our fees. 3. Market Some level of market research is always helpful. What are others in your field charging? Our clients are smart and savvy and they will have done some research and seen other people’s prices. While you don’t have to charge the exact same prices, it will help you understand what kind of prices your ideal clients have most likely seen before coming to you. 4. Value Value-based pricing is the fourth strategy, and the one we’ll spend some more time looking into in this chapter. It’s a combination of all four pricing strategies, our Unique Value Proposition, and the outcomes we promise to our clients. You Are Worth More Than Just Your Time When you price your services based on time units, you get underpaid. And you develop a very unhealthy relationship with time. Time really is money when you’re only getting paid for your time!

#vulnerabilityalert

My early years in business were a constant juggle between taking care of our boys, managing the house, and trying to build a business. I felt like I was never completely focused on one task. And of course I never had time for myself. I never had time, period. I was rushing the groceries, getting annoyed at people who seemed like they had time to waste, I was checking e-mails while the kids were doing their homework, and I wasn’t fully there for my husband Tony either. Tempus fugit was my modus operandi. It was not until reading The Pursuit of Time and Money: Step into Radical Abundance and Discover the Secret to a Meaningful Prosperous Life by Sharon L. Spano that I realized that I had the same scarcity approach to time that I did to money. I highly recommend this book. It’s based on thorough research, and Sharon explores the paradox of time and money from a human developmental lens that supports people in transformational change. So in this chapter we’ll unpack this idea of value versus time. Because you bring so much more than just your time to your clients. You have experience, tools, IP (intellectual property), and you’re delivering outcomes. And that doesn’t have anything to do with time . . . But, we’ll start with the easy part: your pragmatic costs. Calculate Your Pragmatic Costs In order to get to a price that’s based on value, it’s still a good idea to start by calculating your costs. You need to figure out approximately how much it’s going to cost you to deliver what you’re doing for your clients. So let’s think about the different costs you incur when working on a client project. Used Time There it is again. Of course, you’ll be spending time on your client. But it’s not just time that you spend working directly with the client. For example, if you’re giving a ninety-minute workshop, you will have to prepare for that workshop. You have to research the client’s industry and prepare the PowerPoint slides, worksheets, or handouts. All of this takes your time. It’s simple math: time used x your hourly rate. You need to run those numbers so that you know the total cost in terms of time used. Paid Time If you have an assistant or other employees, add their time x their hourly rate to the cost. Lost Time If you’re traveling to the client’s location, or another venue, you should also take into consideration the time that you’ve lost. To take our example of the ninety-minute workshop again, if you’re running it online, then it really only takes you ninety minutes, plus approximatively twenty minutes for setting up the call. But if you have to travel to another city, you lose at least half a day, if not the full day. Because instead of working on another client, you’re spending the day in transit, maybe prepping for the workshop. This is a cost that you should include in your price. Overhead Costs As the owner of a small business, even if it’s a micro business, you have overhead costs. I’m thinking of your monthly rent, taxes, insurance, office supplies, and utilities (phone bill, electricity, etc). Of course you can’t calculate these costs to the penny; that’s why we often just think of overhead costs as a flat fee. The important thing is that you see that you have these expenses. Because if you forget to work them into your prices, you’ll always end up with the short end of the stick. Tools You Need to Run Your Business As online business owners, we usually don’t have big rents and other infrastructure to take into consideration. However, there are quite a lot of costs involved in keeping the “lights on” online. Here’s my list of monthly expenses towards tools, hosting, and other web related things: Hosting (website, podcast, videos): • Siteground • Amazon S3 • Libsyn • Vimeo • Kajabi Security (password and website): • Roboform • Vaultpress Client work: • Acuity Scheduling • Zoom Podcast: • Descript Accounting: • Receipt Bank Social Media: • Post Planner We don’t calculate our pragmatic costs because we want to include them in our proposals. They are for our eyes only. Evaluate Your Intangible Value [Growth] Okay, we’re going from the left-brain territory (costs) to the right brain territory (feelings). The way I see it, value-based pricing is this dance between those two brain hemispheres. Yes, we want to know our pragmatic numbers and costs, but now we also need to address the area that is a bit more difficult to measure. I once attended a round table with a bunch of really smart people discussing the topic “what gets measured and what doesn’t get measured.” The think tank discussed questions like: • What values, behaviors, and things do we tend to measure? What don’t we? • Why do we measure what we do? • What are values, behaviors, or other qualities we could measure but do not? What was fascinating to me was the conclusion that we’re facing a paradox in this twenty-first century. On one hand, there is an explosion in data and measurement. Artificial intelligence, algorithms, and robots are all the results of this attention to facts, figures, and statistics. This data can be used for good, or for evil. On the other hand, we’re also seeing a trend toward favoring nonmeasurable qualities. In his book A Whole New Mind, author Daniel H. Pink writes, “We’ve progressed from a society of farmers to a society of factory workers to a society of knowledge workers. And now we’re progressing yet again—to a society of creators and empathizers, of pattern recognizers and meaning makers.” How do you measure empathy, purpose, and meaning?

I’ve always disliked working with “aggressive” business income goals. They just never worked for me as I was not motivated to work harder just to get to that certain monthly or yearly goal. But that was another thing you just did in business. In December, you had to sit down and come up with your new income goal for the next year. The manifesting people took it even a step further and came up with mantras that you were supposed to repeat in order to attract that magical goal. Again, it never worked for me and instead was cause for frustration and self-doubt. So at the end of 2018, my friend Valérie and I decided that we were not going to work with business goals anymore. Instead, we wanted to measure our success in joy and the difference we make with our work. How do we measure that? Well, the happiness of our clients is one statistic we can look at. Referral rates are another. Our own happiness of course as well, reflected in our nightly gratitude journal. But as you can see, this area is less black-and-white, less numbers and more feelings related. This was a long-winded intro to intangible value. Another way to explain intangible value is the value that you give to your clients, but it’s invisible right now. So on one hand you have your tangible value that’s visible to your client right now. For example, the time you spend on Zoom with them, the “Done for You” LinkedIn profile, the copy for your new website, etc. But now let’s get into the intangible or invisible value.

I'll leave you with a Cliffhanger here...

This excerpt is from Part 2: KNOWING, Chapter 6: Calculate Your Worth

If what you heard today resonates with you and made you curious about the book, I invite you to get your copy of the new Selling Like You're Human book at humane.marketing/book2. You can also download the whole 1st chapter for free to see if it resonates.

And I'm also planting a seed about my 'Marketing Like We're Human' program that I'll run in its live edition starting at the end of January 2022. This is where we take all these concepts from the two books as well as the 7Ps of Humane Marketing to a much much deeper level in an intimate group learning experience. Find out more at www.humane.marketing/program

Get your copy of the 'Selling Like We're Human' book !

Get the new Selling Like We’re Human book HERE!

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Marketing Like We're Human - Sarah's first book

Selling Like We're Human - Sarah's second book

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Authentic & Fair Pricing Mini-Course

Podcast Show Notes

Email Sarah at sarah@sarahsantacroce.com

Thanks for listening!

 

After you listen, check out Humane Business Manifesto, an invitation to belong to a movement of people who do business the humane and gentle way and disrupt the current marketing paradigm. You can download it for free at this page. There’s no opt-in. Just an instant download.

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Warmly,

Sarah

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