D. Rhodes, CPA, Writer and Editor
We're going to jump straight into a formula today (see photo).
This is 99% of businesses desired pricing model.
The actual cost of providing products or a service should be less when compared to the price tag you put on it. And more importantly, the value your clients perceive should be exponentially higher than that sticker price.
For example, a bottle of shampoo & conditioner may only cost you $18, but you charge $29.99. Why? Because clients aren't just paying for the product, they're paying for the promise of cleanliness, convenience, peace of mind and maybe even finding love with better hair days.
A basic haircut service may have close to zero hard costs for you. Yet you charge $50. Because to your client, that $50 could be the admission ticket to landing a new job, nailing a big promotion or looking fresh for a memorable life event.
Seems crazy when you break it down to the true costs, right? But that's because you're not selling shampoo & conditioner or haircuts. You're selling feelings, perceptions, and identity transformations.
I know what some of you are thinking, "But doesn't my labor cost something since I'm providing the service? I have to charge for my time. I have to charge my worth."
Sure, your time has value. But look at it this way - if you only had 24 hours left to live, would you charge $100/hour and only work those last 24 hours for $2,400? Most people would say no, because you can't put a hard number on the value of your existence or your time. This example may seem extreme, but think about it - your "worth" is subjective based on many factors, with the largest factor being how much time you believe you have. The less amount of time you believe you have, the more valuable your time is.
The truth is, most people don't charge what they're literally "worth" by the hour. They charge based on what they want to make. If you want $1,000 a day and only want to cut 10 heads, you'll charge $100 a cut.
The question is rarely "What am I worth?" It's "What do I want?" People charge what they want, not what they're worth.
Elevate Your Marketing
Think about those commercials that start by grabbing your attention with an exciting scene or story...only to reveal they were advertising something completely different by the end.
Like a family camping adventure that draws you in with the sights and sounds of nature, until finally there's a close-up shot of a Ford truck and their promotional financing deal.
Whether you know it or not you were sold on the experience and emotions first.
A study by Harvard Business School found that 95% of purchasing decisions are subconscious, driven by emotions and instincts rather than logic.
Data from NeuroFocus' brain activity analysis found ads appealing to human motivators like happiness (31%), appetite (24%), and attraction (14%), were most effective at driving purchasing.
The actual product of a new vehicle almost became an afterthought to the engaging storytelling.
If you can internalize this mindset around pricing products and services based on perceived value rather than just costs and what the barber down the street is charging, it opens up your marketing approach.
Stop showing customers the "before and after" of someone with nappy hair and then fresh with a new cut - sitting in the same seat...at the same shop...in the same clothes. That's not enough!
Instead, show them the "before and after" of landing a dream job interview after a confidence-boosting cut. Or reinventing their dating life because of a transformational-grooming session. Or seamlessly blending into the family at a wedding event due to a precise-SMP treatment.
This is the "show me no work" framework, using the r-cubed strategy. Don't sell the product or process of your service, sell the benefits and positive life changes that it can unlock for your clients.
So ask yourself this question and answer to yourself or below in the comments.
What are two ways I could approach my business marketing to first show the intangible value and experience I provide as a barber, before ever directly selling the service or product I provide?
Get creative! The more you can emotionally invest clients in the value you provide through your unique experiences and transformations, the less they'll question or pushback on those premium pricing levels. Cost becomes an afterthought when perceived value is the showstopper.
Remember: Our ultimate goal is to help you save time and money, while building wealth and legacy.
The choice is yours, but the clock is ticking. Reach out today so we can help get you from where you're at, to where you want to be. Your move boss.
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