Nobody Cares About Cost
2-minute read ⚠️ Work In Progress
We're ... here to make more
but all that cost-saving corner-cutting
goes away when they see Value™
- the more expensive
- the more custom
- the better
because that means they’re confident
that they’re getting the most work done
How can we communicate your services
as an investment, rather than a cost?
Companies actually want to get rid of as much money as possible
How else are they going to get back so much?
What’s the Return on You?
They want your most expensive offering
if that can free up their time
to face bigger problems
If I handed you a mysterious box
that turned $1 into $1.05,
you’d get crankin’
In what environment do you turn $1 into $1.05?
This isn’t “give me 5 cents”
This is “oh you can make $1.05?
I trust you: here’s $1 up-front”
Life is rarely that straightforward, but now can you appreciate why businesses actually prefer to spend more money? It’s not about costs, but returns. If you took $100 & made a 10% return on $50, then you’d wish you could go back in time to turn that entire $100 into $110, instead of $50 into $55
“you need to spend money
to make money”
Why is this so counter-intuitive?
Individual consumers like you & me
don’t often think like businesses
Think about it this way:
businesses could cut costs,
but there’s no ceiling on profits
Businesses = profit machines
When it comes to us as individuals,
we’re highly risk-averse:
we play to not lose
Humans = survival machines
Ever heard of “loss aversion”?
We value losses 2-4 times more
than gains of the same value
So what can we do?
Thinking like a consultant
- TODO: explain value-based pricing (or google it before I draft my own take on it 😉)
Thinking like an investor
We’re going to stretch a little beyond the initial purpose of this post. Understanding how companies think helps you communicate yourself to employers, but this is a great opportunity to explore how else this can improve your life & career: let’s talk about co-opting this “investment mindset”
Don’t worry about your costs
Worry about their returns
⚠️ Full story: coming soon…