Why ‘Charging What You’re Worth’ is Bullshit

woman looking in mirror blur 300x248 Why Charging What Youre Worth is BullshitYou have, no doubt, been told to ‘charge what you’re worth.’

No matter where I go, there is a conversation to be had on this. If you’re on many email lists you’ll see this idea being exhorted frequently. And I’d like to share my concerns with it.

First of all, let me say this: I am a big fan of right livelihood. I love seeing people be able to be paid for doing what they love and are gifted at. I hate seeing people charge so much less than they really need and struggling. I hate seeing people give away their work for free and then not being able to pay their bills. I think a lot of people need to raise their prices a bit (and some a lot).

And I hate seeing people charge so much more than they need to get the ‘maximum profit’.

So, you’d think I’d be a natural fan of ‘charging what we’re worth’.

But I’m really not. 

Here’s my take: I think that the notion of charging what you’re worth is bullshit.

We see this all over the place with statements of ‘Don’t you deserve to earn six figures?’ or ‘You work so hard! Don’t you deserve to take that trip to Hawaii?’ A sense of entitlement constantly being fed that we deserve more than we’re getting. If we’re not earning the kind of money we’d like to earn it’s often framed as evidence that we don’t believe in our worth enough. But this is where it gets sticky. We are all worthy of having our needs met. We all deserve that (and, sadly, a lot of people don’t believe they are entitled to having their needs met). But we don’t deserve whatever we want (including other people’s money) just because we feel good about ourselves.

But, for the most part, I want to suggest that the whole notion of connecting our worth to the amount of money we charge or earn is a mistake. I think it does far more harm than good. I think it make us neurotic because it reinforces the idea that our deepest worth as a person is, in any way, connected to the amount of money we should charge. It has us look constantly at our own reflection is the mirror vs. out into the real world and our impact on others.

After all, when you hire someone to do something for you, are you paying them for their inherent value as a person or for the self-serving results they bring to you?

Imagine a contractor doing a crap job of the renovations on your house and finishing way over budget and months late (and then leaving a huge mess behind him). You’re infuriated. You refuse to pay what he’s asking, and his response is, ‘Hey! I’m worth it.’ He’s missing the point. This isn’t about his value as a person. It’s about the value you did or did not receive. Period. That’s the only factor in what you pay him.

The Dalai Lama is a wonderful man. But I don’t think I’d hire him as my contractor.

And my contractor might be a miserable bastard . . . who’s so good that he’s worth every penny he charges. 

To go a cut deeper: The Dalai Lama isn’t worth any more as a person than that sonnovabitch contractor. 

So, any focus on our worth as a person misses, I think, the whole point of what we charge. 

Like most things in business, we tend to get caught up in looking at it from our own point of view, rather than the point of view of the client. From their point of view, they could care less about ‘your worth’. They just really don’t think about it that much. If at all. 

But it goes deeper.

After all, if someone charges more than you, does that make them worth three times more than you as a person?

I charge $300/hour for my personal coaching. Does that make my time inherently half as valuable as someone who charges $600/hour? Or is it just the amount that felt right for me to charge given my lifestyle, gut feeling and business model?

Terms of ‘financial net worth’ are often used in the financial industry. We hear news anchors report that, “Warren Buffett is worth $billions!” But is he worth that or is that simply his net financial assets. When we don’t have money, we say ‘I’m broke’ as if there were some relationship between our personal level of brokenness and money. When people work minimum wage jobs, they might be told, ‘you’re worth more than that!’

But are we actually worth more than the others working with us?

Is a person worth more because they’re wealthier? Is Donald Trump’s life worth more than Gandhi’s?

I imagine a modern day marketing guru speaking to Martin Luther King Jr’s mother and saying, ‘Why just be a stay at home mom? You’re thinking to small! Stop trading your time for dollars. You need leverage if you want to make a real difference in the world. Stop doing the one to one model of raising your son. What you really want to do is the one to many model. Don’t you value your time? Isn’t your time worth more than that? So, hire a nanny and start building your business so you can be an empowered woman. What if you started teaching workshops on how to be a social justice leader and converted the attendees into a high end coaching package on how to be more effective at social change? You could create info products and sell those via mail order and make millions! And think of how much bigger an impact you’d have on the world with all that money and with that size of following!’

Of course, sadly for all humanity, because she thought so small and didn’t value her time, all she did was raise up Martin Luther King Jr. to be the man he was.  So sad for all of us. 

Another way to look at this: if you stop doing work that pays money are you worth less? 

Even more so: if you have no money (or worse are deep in debt) are you worth any less as a person?

If you choose to take a path that has you earn less money than you could have – is that always a sign of low self esteem? Maybe you have the skill set to be a badass corporate CEO but you choose to spend your time on your art and running a non-profit doing radical work that challenges the basis of the economy and doesn’t pay you well. Is this a sign that you don’t value your time? Or is it a sign that, perhaps, you value something even more than your individual life?

What if your service is legitimately worth far more than people can afford to pay you?

Of course, this can get slippery. 

Some people tend to genuinely collapse emotionally and walk through life as if everyone else’s needs matter more than their own. They become doormats.

Other people posture and walk through life blind to the needs of others.

Neither of those is healthy.

Ideally, we are in a composed place of valuing the needs of others as well as our own equally. Isn’t that the heart of democracy and good relationships? That we all matter equally?

So, what is your time worth?

Imagine you had only a week to live. Could you put a pricetag on that time. If someone offered you a billion for a day – with the caveat that you had to spend it on yourself alone – would you take it? Isn’t our time on this planet invaluable? You don’t know how much longer you have on this planet.

And what about the gifts you have to offer. If you offer healing, isn’t that invaluable? Isn’t helping someone heal heartache, end their fights in their marriage become a better parent . . . isn’t that invaluable? How does one put a price tag on this? And yet, would you pay someone an infinity of money for ‘healing’? Just because the essence of something is profoundly worthy doesn’t mean that you can charge whatever you want.

If I offered you a billion dollars to remove all your memories of your time with your one true love – would you take it?

How on Earth do we put a price on these things?

This entire economy seems hell bent on putting a price tag on everything so we can profit from it. One could argue that the core of the economy (credit to Derrick Jensen on this notion) is about converting living things into dead thing. We turn mountain tops into pop cans, trees into paper and people into numbers. If we can kill it, we can control it which means we can sell it and profit from it. Life can’t be controlled so easily. But if we can’t control and own something and put a pricetag on it, does that mean it has no value?

Do the forests have no value on their own? Does land have no value unless it is developed? Does the work of mothers around the world have no economic value? Are the oceans only useful to us as long as they have fish? Is water only valuable so long as we can bottle it and sell it?

In Starhawk’s brilliant book The Fifth Sacred Thing she speaks to the notion of earth, air, fire/energy, water and spirit being the five things that no one can or should own because they are the forces that create and sustain all life. They are beyond any monetary value. After all, without them, what does the economy matter?

So, if your life, your time on this Earth and your unique gifts are invaluable . . . how does one put a price tag on them? How does one ascribe worth to something that is worthy beyond measure? There’s a difference between the value of the essence of what you’re doing and the particular form you offer it in. Healing might be priceless but I’m not paying you a million dollars for a massage. 

Outside of the essential economic and activist work of protecting ‘the commons’ (earth, air, fire/energy, water and spirit) and making sure that nobody ever owns them and nobody ever even tried to privatize or put a price tag on them,  it seems to me that we do it by taking inherent worth out of the picture entirely.

We stop trying to put a price tag on our value as a person and we start asking ourselves what price makes sense given the lifestyle we want to have, what our real needs are, the amount that would feel good and genuinely sustain us and be accessible to our ideal clients. It also takes into consideration what others are charging and how much demand there is for what you’re offering. 

What you charge has nothing (precisely zero) to do with what you’re worth as a person and everything (100%) to do with the value people perceive they’re getting in what you’re offering. Period. That’s it.

How to set your price is a topic for another blog, but I can promise that taking your inherent self worth out of the picture will make the process a lot clearer for you.

In my world, pricing is a practical consideration worth your time to deeply consider, but it’s got nothing to do with what you’re worth. 

About Tad

  • http://www.facebook.com/clay.daulton Clay Daulton

    Tad, I just came to your post via Facebook and a good friend.

    I like the content of this article, but, “To go a cut deeper: The Dalai Lama isn’t worth any more as a person than that sonnovabitch contractor….”

    OMG Tad. I was just privileged enough to plan and host HH the Dalai Lama for 4 days in Portland, Or. The above statement , while from a meta/cosmic/all things equal level could be true, it’s completely ridiculous. HHoliness has developed into a fully enlightened Buddha, and that’s not just my opinion, it’s the experience of most everyone who’s near or with him.

    Take a moment with that Tad, before you start engaging the Dalai Lama in discussions around monetary worth. I’m all for striking statements, but this one is a bit terse.

  • http://marketingforhippies.com Tad Hargrave

    what do you think the Dalai Lama would say if you asked him to give you his most honest possible answer to the question, ‘are you worth more than anyone else on the planet?’

    and i thank you for your work in supporting the dalai lama whose work i deeply admire. i’m sure hosting someone of that stature is an incredible amount of work.

  • http://www.facebook.com/heysharonda Sharonda WarrioroftheLight Cro

    Exhale! This is sooooo refreshing to hear. As a Spiritual Entrepreneur who wants to make money and do good work in the world, I have come across so many coaches and consultants who use the” charge what you are worth model” and it always felt slimey to me. And its not because I have an adverse attraction to money energy! I want to be fair in the time and energy and I want my clients to show up relaxed and present and not worried about when paypal is going to hit their account for the payment. Thank you for going against the grain and being real
    Sharonda

  • http://marketingforhippies.com Tad Hargrave

    sharonda, you made my day. and yes – let’s all keep it real :-)

  • http://twitter.com/ellie_nor Elinor Predota

    BRAVO!!! The example you gave of Mrs King made me feel physically sick.

  • http://marketingforhippies.com Tad Hargrave

    ha. in a good way i hope?

  • http://www.facebook.com/ingrid.kincaid Ingrid Kincaid

    Such a valuable point. I am currently working with a writing coach as I finish my book. She spoke of it the same way. Some of her programs are extremely expensive as is her private, one-on-one coaching. At the same time she offers group conference calls once a month that are free and accessible to anyone and they provide information and insights that are invaluable. So for me, it is also finding balance in what I charge for my work and my time and how much I am willing to offer for free or at a group rate.

  • Ayush Jain

    “(100%) to do with the value people perceive.” is charging what people (masses) think you are worth!! and once they pay the value, you want to charge that value to others irrespective of the fact that you spend half of your time doing social work. You can lower the quantity of work but your quality determines your price.

    Obviously the topic becomes irrelevant if people charge what they aren’t worth…they will soon know themselves..basic economics of supply and demand!!

  • mary

    I’m with you Tad I always hated that ad with the tag line “because you;re worth it But even more so I hate to hear someone charging huge monies and then going on about earning six figures as if its their right and then not only not delivering the goods but not being able to deliver the goods. Its something that needs to be addressed big time in relation to online products , training etc. some kind of warped thinking has taken over that people believe that conning people out of money by making them feel needy is a worthwhile occupation. I’ts all a very sad reflection of how we measure what we contribute to the world.

  • http://marketingforhippies.com Tad Hargrave

    amen

  • bsaunders

    I think service providers, especially people who previously worked for professional-level wages. I’ve found it useful to think like a product salesperson. If I sell Fords, my product costs X. If I sell Porsches, my product costs X + Y. It’s not necessarily true that my income will be greater if I sell the more expensive product. It doesn’t reflect how good a salesperson I am at some absolute level. People simply pay more for Porsches than they do for Fords, and different people buy Porsches than buy Fords.

    Executives who are looking to get promoted have a different budget and expectations from someone who wants to get coached on dating. What I need to focus on to achieve a particular income is the business model, how I package the programs I offer, not “how much I am worth.”

  • beachmama

    My husband has a 35 year tree service business and when the economy took a dive, business plummeted. He was inclined to drop his prices and tried it here and there but it made no difference. Work is now pretty steady. His work as an arborist (climbing is his specialty) is VERY dangerous and there are many overhead costs. He always kept his prices in line with other tree service companies which I thought made no sense. People who are looking for the cheapest price have lots of choices. My husband’s value is in his experience, his professionalism, his vast knowledge, and his reputation for detail, technical ability, and safety. People who want the best, someone is is fair and even-handed and who gets the job done safely and efficiently, hire my husband. Personally, oftentimes I don’t think he charges enough. Clients are always thrilled with his work and we’ve never once had an issue or argument with payment. I suppose that speaks volumes. We’re not focused on the 6-figure thing, we’re focused on quality of life. We have very simple needs (compared to many) and that really frees us up to live a life based more on principle than on money. I like this conversation, makes me think. Thanks for this post Tad.

  • Terra Pfund Kroll

    You had me at The 5th Sacred Thing. You are a hippie.

  • clairesholisticpursuits

    This article is sensational. Thanks so much for this thought provoking goodness!!! What an incredible mindset to go into business with. Would also help so much with not taking things that happen in business personally, if your worth as a person is removed from the situation. Loved it, thanks again for the mindset shift!

  • http://SmudgedSymmetry.com/ Marinda Jansen van Rensburg

    Loved this article, Tad. Attaching your self-worth to your pricing creates an emotional mess, instead of focusing on doing quality work that solves a problem—which is what people pay you for, after all.

  • http://marketingforhippies.com Tad Hargrave

    thank marinda! so glad you liked it. here’s to less emotional messes :-)