Paying for Outcomes, Not Inputs
I saw the most wonderful TikTok video yesterday! The text on the screen said, "I paid this guy $500 to remove a tree, and it took him less than a minute....I think I overpaid." Behind the text was a video of an enormous crane tearing this massive stump, massive root system and all, out of the soil like it was a small weed. It was thoroughly impressive! The entire point of this video was to show how ripped off this person was because they paid $500 for a job that took just a few minutes.
This is where people get so twisted up. The prevailing thought process in our culture is that when we purchase something, whether a service or a product, we're paying for the cost of the physical inputs and/or the time that went into it. In reality, though, we're paying for an outcome.
In the video mentioned above, they weren't paying for the person's time, and they weren't paying for the cost of the equipment. They were paying for the desired outcome of no longer having that ugly tree stump in their yard. That's it. It doesn't matter how much the business's time or equipment costs. Is having a stump-free yard worth $500 to them? Yes or no? That's the only equation that matters.
I occasionally get the same thing in my coaching. All of my coaching is quoted on a flat-rate basis. The client shall get x number of meetings over y number of months, plus access to me between meetings, for $z. Once in a blue moon, a prospective client will ask me for a formal breakdown of my time (prep, meeting, follow-up hours, etc.). Why? They want to determine what my hourly rate is to determine if my price is fair. Problem: I'm not selling my time. I'm selling an outcome: impact….hopefully life-changing impact. Either a prospective client believes the impact I can make in their life is worth more than the fee I charge, or they don't. If they don't, they absolutely shouldn't hire me.
Coffee is another example. I recently had a friend tell me our Northern Vessel signature oat milk cold brew lattes are a ripoff at $6.50. "What are you putting in them, gold!?!?" Well, close, but no. Housemade cold brew concentrate, oat milk, and simple syrup. "And that costs you $6.50?!?!" People aren't actually paying for coffee, milk, and sugar. They are paying for an outcome. In this case, the desired outcome is an experience. It's the community, camaraderie, atmosphere, hospitality, memories, and, yes, a hopefully delicious drink experience. If this outcome is worth more than $6.50 to someone, they should consider buying one, but if not, they shouldn't!
Whether you're wearing your consumer hat or business hat, always remember this principle. We aren't paying for physical inputs or time.....we're paying for outcomes. Know what you're really selling, and sell it with confidence. Know what you're really buying, and buy it with confidence. What outcome are you trying to obtain? Does xyz product or service provide said outcome and cost less than the value this desired outcome adds to your life? If so, amazing!
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