the difference between price and value

Dear you,

When I was a kid, possibly ten years old or less, my dad drove me to Nicon Nuga, later called Nicon Hilton and now Transcorp Hilton. We got into the building, and it was beautiful and luxurious. They had a couple of artworks hanging around. There was a Bureau the Change office for currency conversion.? I remember seeing some airline offices where people could buy air tickets to travel. It screamed convenience!

My dad said we were going to have a meal here. I was so happy and excited. We walked to the restaurant beside the pool, and my dad asked me what I would like to drink; with glee, I said coke. Coca-cola's coke was my favorite at the time. I didn't like Fanta, it was too orangey and tasted like sweet vitamin C. Sprite felt like water-down coke, so it was only an option if coke was unavailable. Anyway, I asked for a bottle of coke. My father asked for juice or so.

The server brought my small 35cl bottle of coke, a tumbler filled with ice, and a slice of lime. I was impressed by the service. We ordered food as well. Everything we ordered came with something a little extra. The experience was really lovely. When the bill came, I peeked and saw that my tiny coke bottle cost 1000 naira! I exclaimed at my father. Why would he agree to pay for such? Coke costs 35 naira. Depending on where you go, you could get it for 30 naira or 40 naira. The 50cl bottle cost 50 naira. Why were we spending 1000 naira on a 35cl bottle!!! I felt so cheated, but my father maintained a calm demeanour. He smiled at me and said,

"Blessing, there is a difference between price and value. We are not paying for the coke; we are paying for much more. We are paying for the experience, the ambience, the music, the privacy, serenity, and even the network you could possibly make by just being here. Years from now, you will remember this experience."

Now, I realise he was right. That experience helped me realise the bottle of coke was not what we paid for. It was the value of the experience. There is a black and white TV we once had; people paid a huge chunk of money (higher than what it cost to buy a new one) to rent it now, because a good one in such good shape is so scarce and people often need it to recreate an era or be reminded of a memory. The value of that memory or moment is what they pay for, not the price of the TV itself. It's like buying a vintage car.

One time, I was in search for a typewriter to send personalised letters to my friends and recreate an experience. Unfortunately, I couldn't find one. It took me weeks. When I finally found one, a couple of my friends reached out to me and asked if I could help them buy a typewriter, and they were willing to pay extra for the convenience. They were not paying the price of the typewriter; they were paying for the value of the convenience and memory.

Rerouting this email to you as a service provider or employee, you need to realize that your skills are valuable. For example, when you put a price on your photography skill, you need to know that it is not the price people are paying for; they are paying for the value of that memory captured in a pleasing way. Likewise, when people pay me for consultation, they are paying for the value of clarity and expertise because that gives them a head start vs if they were doing it alone via trial and error.

So, I guess this letter is twofold:?

First, it is a call to action for you to invest in valuable experiences (I bungee jumped last weekend, by the way. Here’s a video). Invest in experiences that open your mind, exposes you and broaden how you think. That investment is worth more than money.

Second, when you want to put a price on your work, stop overthinking it or short-selling yourself. Instead, ask yourself, what is the value for your client? What would they get? What is it worth to them? How much would you be okay with charging that will cover your expenses, give you peace of mind, allow you to deliver that service with joy and energy, and make you feel like it is worth your time? Remember there is a difference between your audience and your customer, a key part of that difference is the willingness and ability to pay for your service. Ensure that you deliver on your own promise and keep your end of the bargain when you decide to package, price and sell a product, service or skill.

If you struggle with pricing, I hosted a conversation with Michael Janda (@morejanda) in 2020 and I figured it might help you. I'm turning that conversation into a more robust ebook, if you would like the ebook, sign up here, and you'll get it in your email (inbox, promotions, spam, or socials) this week.

I hope this letter gives you the confidence you need to price your skills and products better. Even more, I hope it helps you see that your skills are more valuable than you think they are to those who need them. Stop overthinking. You are enough.

With love,

Blessing Abeng