Value is subjective.
That’s not random internet douche, Johnny Freelance, just saying it. It’s the most commonly-accepted (by far) economic theory of value called… surprise, surprise… the Subjective Theory of Value (you can read more about it on WikiPedia here).
It stands in stark contrast to things like Marx’s Labor Theory of Value.
Marxism has seen a resurgence of late, but, on the economic side, no credible economist would dare try to defend Marx’s Labor Theory of Value. That’s because it doesn’t accurately describe human behavior.
Infamous online marketer, Frank Kern, did a video on this several years back. He parked two cars side-by-side in his driveway — a BMW of some sort and a Rolls Royce Ghost.
He, then, pointed out that mechanically the cars are virtually identical.
Same drivetrain, same chassis… even mostly the same tech inside.
The big difference was simply the look of each… and the brand name. The BMW sold for about 70K and the Rolls Royce 350K. The Labor Theory of Value doesn’t explain that. They both required virtually the same amount of labor.
The fact that a Michael Jordan rookie card sold in June of 2022 for $1.008 million… meanwhile I can buy a Steve Kerr rookie card for about 20 bucks. I mean, Steve did hit that game-winning shot, after all! No love.
In any case, the amount of labor to make each card is virtually the same.
Why the disparity in price?
Again, value is subjective.
(The class example is the “Diamond-Water Paradox” which you can read more about here.)
Now, you might be wondering… “Mr. Johnny Freelance, sir… who gives a rat’s patootie about all this?” Well, my friend, YOU do. I often get asked a variation on the same question:
- What is my freelance service worth?
- How much can I charge?
- How do I charge more?
The answer: value is subjective. Meaning… you can charge whatever you can get people to pay you. Your service is worth… whatever people will pay. It’s subjective. There’s no one right price.
Even IF, you offer an identical service to someone else.
Your portfolio, your sales copy, your reputation… and about 100 other factors can increase the “perceived value” of your service. It’s subjective. I’m gonna say that about 1,000 times so it sinks in.
It. Is. Subjective.
Your task, then, is to increase that perceived value so you CAN charge more. The most effective way to do that is by increasing the perceived value of your offer. It’s goes back to the title of this post:
“For everything you gain, you lose something else.”
That’s your client. In order to get your service, they must give up something… their dineros. It’s your job to make them want your service more than they want their dineors. That’s sales, marketing, etc.
You do that by increasing the perceived value.
In essence, it’s an equation…
Perceived value of your service: $5,000.
Cost of your service: $2,500.
So, they see it as getting $5,000 for only $2,500. They see it as getting one over on you. If I told you I’d trade you $1 for $2… that is, you give me one and I’ll give you two… wouldn’t you do that all day, every day?
That’s where you need to get with your offer.
So, let’s talk about how to do that.
(As you might guess, this is also something I cover in great detail in my Beginner’s Guide to Freelance course. In fact, Lesson 11 in that course is dedicated to “charging more for your services”. In fact, what that lesson is… is multiple ways to increase the perceived value of your offer.
So, as I’ve said… if you want the more advanced treatment, in video, where I can really dig in (in ways I just can’t in an single blog post), then that course is for you. It’s included in the extended trial you get with my referral link. In fact, you get access to all 30,000+ courses during the trial. Talk about an irresistible offer! 30,000+ training courses for… well, nothing. Anyway, you can get that extended trial using my referral link here: https://myjohn.us/bgtf.)
There are two parts to an irresistible offer:
- Superior Solution
- Superior Offer
To make sure I give credit where it’s due, this is a Todd Brown “thing”. If you don’t know who that is, he’s a fairly well-known marketing teacher. Anyway, he points out that it’s both the solution AND the offer.
The solution is the actual thing you deliver.
A membership site, a logo, a blog post, a brand kit, an Instagram post, etc. The solution itself needs to be superior to your competitors. This is where things like your portfolio, reviews, experience… all the typical things…
This is where they come into play.
Buuut… there are four critical factors that make a solution superior — and most freelancers really only focus on one or two. So, this is a place where you can increase the “perceived superiority” of your service just by talking about things that most freelancers don’t.
Those four things are:
- Dream outcome
- Probability of success
- Time delay
- Time and effort cost
Again, credit where due… these four things come from a guy named Alex Hormozi. Again, another marketing guy… doesn’t matter all that much and he doesn’t necessarily talk about them this same way, etc.
Anyway, most freelancers focus on #1, the dream outcome. Hell, most online business, most marketers, most copywriters, most big companies… most everybody. It’s commonly referred to as “hype”.
But, in reality, it’s often the other factors that matter more to people.
Because, at a certain point, how much better of an outcome can you really offer? For example, does one brand of soda pop really taste that much better than another? Are my membership sites really that much better than others?
Are your logos really that much better?
Or your blog posts?
Or social media graphics?
Or whatever the hell you do?
Probably not. And regardless… it’s diminishing returns. You can only hammer “dream outcome” so much before it’s like, “Okay, I got it… what else?” In reality, “probability of success” is usually a much bigger concern for people.
Let’s get “meta” for a second.
I’ve been telling you about my Beginner’s Guide to Freelance course. I’d guess that you probably generally believe that it’s a good course that will teach you some useful things. You probably accept I’m not lying about it. You’ve seen the student reviews and all that.
It’s likely less about the proposed outcome…
Or, believing me.
It’s likely more about you… can YOU do it? Can YOU implement what I teach? Will it work for YOU? Will it be the thing that makes the crucial difference in YOUR freelance career? (Of course, the answer is “yes” to all those questions.)
All that speaks to “probability of success”… for you.
So, ask yourself… how can I speak to the probability of success in the services I offer? Yeah, you can offer a guarantee… but, it’s like the class Tommy Boy line:
“Because they know all they sold ya was a guaranteed piece of sh*t. That’s all it is. Hey, if you want me to take a dump in a box and mark it guaranteed, I will. I got spare time. But for right now, for your sake, for your daughter’s sake, ya might wanna think about buying a quality item from me.”
A guarantee is nice, but not enough.
That’s why Job Success Score on Upwork, for example, is such a big deal. It’s an actual number illustrating that freelancer’s “probability of success”. Also, ratings. If a freelancer has a 4.9 out of 5 rating, that’s a high “probability of success”.
So, again, what are some ways you can speak to this on your website, in your marketing, in your content, when chatting with people about your service, etc.
And then, of course, we have “time delay” and “time and effort cost”. I find these are a bit more self-explanatory. Main thing is simply be sure to talk about them on your sales pages and in your marketing.
Last point on this… I said you need a superior solution. That means… better than your competitors. However, you should feel a sense of excitement now… because you realize superior isn’t just about talent.
It’s not just the outcome.
That is, you being a better developer or graphic designer, etc.
Superior can be a function of probability of success or time delay or time and effort cost. Your logos might be about as good as everyone else’s, but you deliver them in half the time. That’s a superior solution.
Or, you have better reviews.
Or, you require less input from the client.
And, so on. You have options in terms of how you make your service “superior”. I hope you now see that.
But, of course, that’s only the first part.
You also need a “Superior Offer”.
And, I’m gonna call an audible. I had intended on talking about that in this post, but it’s already waaay long and a decent amount of homework for you to work on, so we’ll pick up with the superior offer in tomorrow’s post.
For now, think about those four elements of a superior solution:
- Dream outcome
- Probability of success
- Time delay
- Time and effort cost
Look at your service and the way you talk about it (whether it’s on a sales page on your website, an Upwork page, just you talking to people about it — doesn’t matter). What’s missing? What aren’t you talking about?
Also, look at some of your competitors.
You can’t make your solution superior if you don’t know “to what” it’s superior. What is the outcome they’re promising? What’s the probability of success? Time delay? Time and effort cost?
Do they even talk about those things?
Ultimately, you want a sense of how you think you can better position your service as superior to all the other options. Again, doesn’t have to be perfect. Don’t get caught in analysis paralysis.
Do a little research, spark some ideas, and run with it.
And, again, if you want some more advanced training on all of this, grab the extended free trial of Skillshare and make your way through my Beginner’s Guide to Freelance course. Link is here: https://myjohn.us/bgtf
P.S. What questions do you have?