Dear Successful Entrepreneur,
Why do you give away your expertise? This question has baffled me for years.
You know the value of your expertise because it didn’t come easily. You’ve accumulated wisdom that only comes from scoring big wins and suffering crushing defeats. You’ve forgotten more about your business than most of your customers will ever know. An offhand observation you make could save a prospect thousands of dollars a year.
Your customers and prospects also know the value of your expertise. They pump you for free information every chance they get, often subtly, sometimes by dangling the carrot of new business, sometimes by threatening to pull their business.
Your wisdom must be pretty valuable indeed for people to crave it so badly. So again, why do you give it away?
You respond by saying, “That’s how our industry works.” Pardon me for saying so, but that response is beneath you. You’re too smart to leave money on the table. You’re too shrewd to imitate the foolish practices of competitors. You’re too tough a negotiator to cave in to unreasonable customer demands.
I’ll assume you agree with me on those last few points. And as long as we’re in sync as to your abilities, let me be bold enough to suggest that your “how the industry works” comment may be a copout. Perhaps what you really mean is, “I’d love to charge for my expertise, but I can’t figure out how.”
If it’s ideas you’re looking for, maybe I can help. To start with, one of my mentors told me to put a value on everything. How much is your time worth? One hundred dollars an hour? Five hundred? Whatever the number is, being aware of it every minute of the day is like a putting a cash register in your head that calculates how much free wisdom you’re handing out. Thinking about it in terms of dollars-and-cents helps you understand that you’re not giving away wisdom, you’re giving away money.
The next thing to do is package up your wisdom in marketable units. You can’t sell a conversation, but you can sell a one-hour block of consulting time. You may not be able to charge for an estimate to fix a leaky faucet, but you can charge for a complete home plumbing inspection. You can tell a prospect how to diversify her investments for free or invite her to an in-depth webinar at $25 per attendee.
A third key point to remember is that you can be selective. Just because you can charge for your expertise doesn’t mean that you have to. However, by placing a value on your expertise, you transform unprofitable freebies into powerful negotiating tools. In the end, you may end up giving that prospect free access to your $25 webinar – but now, maybe the prospect feels a little indebted. Maybe getting something for nothing is the hook that convinced her to attend. Either way, your prospect is that much closer to becoming a client.
Finally, keep track of the revenue you make from your expertise. Once you start seeing a trickle of cash, you’ll be inspired to continuously improve your “expertise packages” and make even more. Who knows? Maybe one day, the trickle will turn into a big honking revenue stream.
And oh, yeah – if you’re still worried about that “how the industry works” thing, don’t be. Placing a value on your expertise makes the free expertise offered by competitors look cheap in the eyes of your customers. If you allow prospects to pick your brain for nothing, they may like you, but they won’t respect you. And as you well know, mutual respect is the foundation of a strong and long lasting business relationship.
Respectfully yours,
Brad
