What is your expertise worth? Your time? Your knowledge? I think it's fair to say that each of us as a professional has a different value to different people. To someone who wants some bushes and a couple flats of annuals, I'm overpriced. But for someone who is looking for a complete landscape makeover, I'm the guy. Maybe you're in between.
When you price yourself, do you put a price on your time (per hour, day, etc.)? Or do you put a price on what you are worth to someone who wants or needs you?
I've long been puzzled by the fact that a plumber gets a better hourly rate than most landscape designers. As a profession, they have done a good job of putting a value on their services. One might even argue there is an entitlement mentality among them, but the point is, they have created a market where what they do is valued, rather than how long it takes to get it done.
It's a totally different animal, but somewhat related. It's baseball season and I'm a very enthusiastic Cubs fan. Yes, I'm on the "big blue bus." Anyway, consider Cubs ace Carlos Zambrano. His contract pays him $16 million dollars for 2008. That's a lotta lettuce!Is it worth it to the Cubs? Sure it is. But let's do the math. He will probably start 30-35 games this year. Call it 33. He averages 210 innings per year and, say he throws 100 pitches per game, so 3300 pitches. The math in round numbers: $485,000 per start; $76,000 per inning pitched; and $4850 per pitch. And not all the pitches are good ones.
Is that a bit ridiculous? Yep.
The lesson is to price the job based on your value to the client, rather than the time you spend. The challenge, of course, is how to create that value and communicate it's worth to the client.
this begs a host of other questions too. More on this later.
1 comment:
I've struggled with this concept for many years and my resolution was that we're worth the value that society puts on us, pretty much the same conclusion you came up with. In the case of the plumber, people tend to put more value on having their toilet flush or repairing the leak in the water line (all things I'd do myself and NOT call a plumber) than they do on their landscape which can always be put off a little longer if desired.
Actually, I'm not a landscape designer per se, I'm over the Landscape Maint department of a university. I've had to deal with people who associate us with the "lowest common denominator" - the people who pick up trash or push a lawn mower - so I've contracted out most of the latter. Now, we're primarily focused on creating "garden spots" on campus and that's paid off pretty well. I've redefined our niche which has changed the way people view us and, as a result, we've gotten large budget increases the past couple of years!
So, as you said, price based on value to the client but also redefine your niche to the highest level that you can successfully work within. If you want to low ball all your jobs, then you will be valued at that end of the spectrum.
L8R!
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