Why and how to charge what you're worth

Andrew Griffiths purchased his first business at age 17 and, in the two decades since, has become a global presenter, business coach and bestselling author, turning his entrepreneurial prowess into 14 books and earning the title of Australia’s number one small business author. The many years and countless pages have culminated in his discovery of the most crucial thing all business owners need to know – charging what you’re worth is everything.

Andrew’s latest book, Someone Has To Be The Most Expensive. Why Not Make It You? shares a treasure trove of expert advice on understanding your worth and valuing your expertise accordingly, with pricing to match.

“This is a book I’ve been meaning to write for many years because I struggled with charging what I was worth,” Andrew told the Flying Solo podcast. “I had a poverty mentality growing up, and there were no business role models in my life. I learned from the guy I bought the business from, who also had a poverty mentality. His mindset was to be successful in business, he had to be the cheapest. I inherited that thinking.

“I had to go virtually broke to turn the business around and grow from the cheapest to the most expensive. And it worked unbelievably well for me. People will find and respect you if you are great at what you do and are prepared to charge accordingly for it. That’s certainly my experience.”

Andrew Griffiths, author of Someone Has To Be The Most Expensive. Why Not Make It You?

You’re worth it

Andrew believes that many people struggle with self-worth when deciding on pricing, particularly those working in creative fields, which sparks a vicious cycle of under-charging.

“There’s a limiting belief about what people will be prepared to pay,” he says. “They set their pricing around what they think customers can afford to pay, as opposed to what they should be charging. Their only strategy is to be the cheapest, and that is not a strategy – that’s a recipe for disaster. Because when you’re the cheapest, you attract the wrong customers; you attract people that are only interested in cheap. When you’ve got nothing but cheap customers, they refer you to their cheap friends. It becomes a never-ending cycle.”

Why don’t we charge what we’re worth?

Andrew says that aside from a self-limiting mindset, concerns over current economic conditions and the fear of losing customers are also in play. However, his personal experience suggests that both factors are moot.

“I think it’s easy to get caught up in the ‘tough economic times’ mindset, but it becomes convenient to hide behind. I don’t think there’s a right or wrong time,” Andrew insists. “Charging what you are worth means that your business is more profitable, so you attract better customers and enjoy your business more. It’s a future-proofing strategy that I helped many businesses implement during the global financial crisis, which was a very tough time financially.

“Then there’s the fear factor. People think, ‘I’ll lose all my customers if I put up my prices’. I’ve gone through this with so many businesses over the years. Yet I have never seen a business lose all of its customers.

“Most businesses have two types of customers,” he explains. “They’ve got that type that respects them and pay on time, that will gladly pay more for what they do; it’s a respectful relationship – they are our great customers. The other kind of customer is those that want everything done last-minute. It’s a constant negotiation on price, they try to get out of paying what they owe, and they take forever to pay. They’re the ones that we tend to lose when we put up our prices – and they’re the ones we want to lose.

“The question is, do we have the customers we want or the customers we deserve? If we are not proactive about this, we end up with the ones we deserve. I’ve seen this to be a universal consistency across businesses worldwide,” Andrew warns.

Listen to Andrew Griffiths on the Flying Solo podcast:

How do I put up my prices?

When considering a price rise, Andrew says there are two key factors. Firstly, you must be worth the money you’re asking for, and secondly, you must keep your customers in the loop.

“If your model is to charge what you are worth and ideally be the most expensive, the caveat here is: you’ve got to be the best,” Andrew urges. “Being the best is the key to that recipe … you can’t just put lipstick on a wombat.

“If you suddenly put up your prices overnight, people get grumpy with you. But if you take your customers along and explain to them what you’re offering, what you’re doing more, or investing more to do, then you can explain why it will cost more and how you’ll give them better value to make the experience better for them.

“Customers want to understand the value,” says Andrew. “We’re in a value-driven world more than a price-driven one, no matter the economic times. If you understand why your customers value you, it is rarely about the product or the service. Instead, it’s about your experience, unique expertise and consistency. The more people value us, the more they’re prepared to pay for what we do, and the more likely they will refer us to like-minded friends. So, looking at value with fresh eyes is a key part of this.”

Your story has value

Andrew says that even the newest business can impart its value and charge what they are worth from the earliest stage. How? With the art of targeted storytelling.

“When setting our initial pricing, we generally use the justification of, ‘I’m new, so I’ve got to charge less’. I disagree with that as a pricing model,” says Andrew.

“A better attitude is: ‘I’m going to charge accordingly, but also make sure that I offer extraordinary, exceptional value and tell great stories. I’m going to do what others won’t do’. Then you can charge more because you’ll attract value-driven customers instead of those looking for cheapness.

“It’s about targeted storytelling, showing your customers your value by sharing stories about your business. Tell people your origin story – give some background about who you are, why you do what you do, and why you are good at it. Let your customers know that you are on their side, and share about your team, your products, your customers, and the difference you make in your community.

“When we let people in, they form an emotional relationship with us. This creates a deeper level of engagement, and people value us differently,” says Andrew. “If we tell nothing of our story and we just focus on the product, there’s no emotion to that – it’s just a transaction. We must move from transactions to experiences, and storytelling is an excellent tool for that.

“There’s a lot of things that people do in business; if they just changed a little bit, their business could become so much easier. Charging what you’re worth is one of those,” Andrew insists. “Once you start to charge what you are worth and your business becomes more profitable, everything gets easier – even now, amid economic gloom and uncertainty.”