The story is told that Pablo Picasso was dining at an elite restaurant in New York when a woman recognized him and initiated conversation with him. She began gushing about his work and how she loved his style. He graciously accepted her comments which gave her the courage to ask him to draw a sketch for her.
He grabbed some paper, a pen and a pencil promptly sketched the scene of waiters passing trays of food. As the woman reached for the sketch, Picasso said, “Madame. That will be $10,000.” Shocked she replied, “But that only took you five minutes.” “No, madame, it took fifty years,” he replied.
Picasso priced his product to its value, not to its cost of manufacture. He priced his product to its investment value, not the sum of the cost of the paper plus the ink plus some hourly wage rate. A painting with the name “Picasso” is worth more than a similar painting with the name “McGillicuddy.”
LESSON: Determine your product’s economic value to the customer and price the product to that value, not the manufacturing cost.
APPLICATION: I hear this in my business alot, “Well so-and-so down the road can do it for half that.” I am sure you hear it too. And it is easy to get discouraged. But one thing I can guarantee is that I spend probably 3 times more time on my work than anyone else. I can also guarantee that I have invested YEARS in experience to do what I do. REMEMBER you want to attract the “RIGHT” kind of client and everyone that comes in your office will not fit this mold. The “Right” client is someone that knows “you pay for what you get.” They can see the difference in what you do. They aren’t shopping for a bargain, they are shopping for results. Don’t undersell yourself.
REF: “How To Become A Marketing Superstar” by Jeffery J. Fox, 2003