I want to share a quick story, and how it really smacked me across the face with a realization of how often we leave money on the table as developers. I hope that by the end of this post, we’ll all feel less weird/guilty/embarassed about charging an appropriate amount of money for the value we provide.
When thinking about charging money for my skills, there are too many instances I completely disregard the value of what I’m able to do.
What I can do in an hour, may take someone years to accomplish.
How many hours have we all spent learning to code, reading books and blogs, watching screencasts, pouring over APIs?
Don’t forget these! We have invested the time, energy, and money in ourselves. And why do we make investments? For future payoff!
With that, on to my story.
A Call List
A guy I know helps run events, and like most events, people wait until the very last minute to confirm whether or not they’re coming. Despite countless emails, cough, cough, some people just don’t act.
So, a few days before, he ends up having make phone calls to everyone to ensure that they received the message that the deadline is very quickly approaching. He doesn’t like dropping people from an event without providing every opportunity for them to confirm. Nothing like having an angry participant yelling about how they didn’t receive any notices of a deadline because they don’t check that email address anymore.
So, anyway, he’s telling me how there’s a huge list and how he’s going to be paying a few people to sit and make phone calls all weekend, and into the next week.
He’s not exactly great with computers, and as I’m sitting there listening, he also asks me for some help formatting an Excel spreadsheet so that the callers can be more efficient with calling and marking whether or not the call was answered.
“Sure. Email it over, and I’ll clean it up before I leave today.”
A Wizard Appears
So, I’m sitting there looking at this list of just under 1,000 phone numbers and thinking about how long these people are going to have to be sitting there calling each person, and repeating a script.
As a fellow developer, I know what’s burning you up inside right now… This is the ideal case for automation.
I have a Twilio account and a few minutes. I pull out my iPhone, record a voice memo of the information each person on the call list needs, and within no more than 20 minutes total, I shoot off an automated call.
I also included my colleague’s number…
A few minutes later, he walks in with a confused look on his face. He received the phone call.
“How did you do that…?”
“Oh, well… Everyone on that list received the same message. All of the calls are done.”
I may as well have made a 737 jet disappear; the magic was the same in his eyes. I had achieved wizard status.
The next question is, what should we charge this person? The total Twilio fees ended up at about $11.00 or so, so I figured $20.00 or $25.00 is good. It didn’t take me much time or effort, and that more than covered what I’m actually paying in fees.
This person was ready, willing, and happy to spend hundreds of dollars to pay a few people to make all of these calls for him. I just saved him countless hours, and quite a bit of money. As quick as I said $25.00, I could have said $250.00 and he wouldn’t have flinched for a second.
If I spent some time and really broke down how much time and money I would save him, I could probably convince him to pay much more than even $250.00.
Understanding Our Value
So, what’s the true value of our work? The mistake I continually make is to sit and start thinking of an hourly rate, how long something will take, what’s the “fair” price to them, will they think I’m asking too much, etc. There’s a flood of questions I ask, when the answer is very plain and clear.
My work is worth whatever someone is willing to pay.
Most people I know aren’t willing to just give their money away. I know I’m not. We all calculate what something is worth to us, and if it’s worth it, we pay it. We make our decision based on the value a product or service provides us.
My guess is that I could charge $100.00 a month to automate these calls. I could write the script once, spend $11.00 in Twilio fees every now and then, and end up well ahead at the end of the year.
If I came across a website offering call services at $100.00 a month, I’m passing without even considering it. The value isn’t there for me. I could do it myself for much less, with very little time invested.
But, I know of at least one person already who would be entering his credit card this second at $100.00 a month for this. The value of automating these calls is well worth $100.00 a month to him. By paying for this service, he ends up ahead in money and time, a great value.
Wizards Don’t Pay for Magic!
The next time you’re ready to undercharge, or do something for free because it’s “easy,” remember this. Just because this magic flows through your hands typing on a keyboard, not everyone has been trained in these spells. What you would be utterly unwilling to pay, may be a great deal for someone else.
Anytime you can alleviate a pain point, save time, and save money for someone, the value you provide is whatever they’re willing to pay. If you can gain someone one more customer who provides a lifetime value of $1,000, then charging $500 is a great proposition no matter how much time or effort it takes you to accomplish the task.
No need to feel weird charging a fair amount when both parties benefit.
What About You?
Have you ever left money on the table because you failed to charge based on the value you provide?
Please share your story in the comments, or shoot me an email.