If you’ve been following me for more than 5 seconds, you’ll know that there are heaps of contributing factors when it comes to how and what you can charge your clients.
The cost of materials and the time the job takes you are only the very tip of the iceberg. Today we’re talking about another big contributor and a topic that can be somewhat complex; worth vs value.
I’ll be honest, this one has taken a lot of thought to put down into written words. I don’t want to make it seem too simple (because it’s not), but I also don’t want to make it so complex that it doesn’t make any sense and you question my sanity. Keeping all that in mind, here’s a simple definition of worth vs value.
Value is what the outcome of the deliverables means for the client.
Worth is what the project means for you
Value (and how it helps you figure out your rates)
When deciding how much to quote a prospective client, one of the key things to consider is the value your services provide them. Using the cost of materials and the time the job will take is only the very beginning, the foundation of calculating the price. You then need to add in a few other ingredients to beef out the quote.
Say you’re being commissioned to design a new website for a small but established business. Their conversion rate is low and, even at a quick glance, you can see why.
The UX (user experience) is pretty poor and people browsing can’t find the information they need quickly and easily. The website looks cheap and unprofessional. The font choice is hard to read, and the colours are evoking the wrong kind of emotions. There’s key information missing and the whole thing is not instilling any trust.
Because of your skills and knowledge in creativity, website design and development, UX, and buying psychology, you know you could transform this beast into something that might actually make them money. That’s why you’ve been invited to submit a proposal for a whole new website. The business doesn’t have the capacity to do it themselves, but the future of their business may very well rest on what this website can do for them.
This means that your services are (potentially) very valuable to the client.
While you’re a pro and might be able to smash it out in a few days, that’s not the only thing that determines the price you charge. They stand to make higher profits than they ever had. You can streamline and automate a whole lot of admin tasks from their shiny new website. You can even set them up with new marketing channels they haven’t been able to explore before. All of this is value added to their business that they wouldn’t have without you.
The price you quote should reflect all of this.
Worth (and how it ALSO helps you figure out your rates)
Where value is mostly about the client, worth is mostly about you. You’ve probably heard the phrase ‘what’s it worth to you?’ and never really given it much thought. People often ask it flippantly and are actually referring to price, not worth. Worth is talking about something much more than the price someone is willing to pay for something.
The worth of something is in an almost constantly changing state. Worth is highly dictated by the ebb and flow of life’s circumstances, so therefore rarely stays the same for very long.
Say you’re plodding along steadily in your creative freelance career. You’ve got a good portfolio under your belt but are still mainly working with small and lesser-known businesses. If this type of client is what you want, then great! There’s nothing wrong with it as long as you’re happy, they’re happy, and the bills are being paid.
However, there may come a time where you want to level up your skills, reputation, and portfolio by landing a big, well-known corporation. Having Coca-Cola on your resume will open more doors, refine your skills and experience, and give you more reason to bump up your rates.
Finally, the opportunity comes along, and they contact you for a quote. You know this is a company who can afford to pay you the big bucks, but you also know you’re not the only one throwing their hat into the ring. This project is worth more to you than any other, simply because it would provide you with a whole lot more than just money.
This is worth.
You need to weigh up what the project would mean for you as a whole and take that into consideration when quoting your price. If it’s about squeezing as much money from them and nothing else, you may decide to make this the highest quote you’ve ever done. However, if having them on your resume is worth a lot to you, you may consider a lower rate because there’s more at stake here than just money.
Another example could be when you’re in a dry spell and work has been slow. There could also be other life challenges that mean you need money fast. The combination of this may mean your rates become slightly lower than they have been in the past, or you add more value to the price you charge.
A job you would previously quote at $1800 becomes $1500 because it means you’re more likely to land the client. Alternatively, you keep the price at $1800 but include more in the deliverables to value-add. When the work picks up again or your circumstances become less desperate, the worth of each job may change and cause you to reevaluate your prices and package inclusions to match.
There are so many factors that determine what a project is worth to you. There have been very high paying jobs I’ve turned down because I knew the client was a nightmare to work with, or I questioned the ethics of the business. Worth is purely individual and will differ from person to person.
When considering any job or project in front of you, ask yourself if the value of the client, job, project, or future gain is worth it to you right now.
I do want to say that this is a very simplified outline of worth VS value. The topic is quite complex and can be difficult to understand at the best of times. I’m just all about handing you those bite-sized pieces of information that begin to change your thinking and start to level up your business.
Until the next time we meet around the table, consider the worth and value of each project before you finalise your quote.
It could be the difference between a feast or a famine.