Am I Charging Enough? Picasso in the Diner
It is good for the man gracious in lending, who conducts his affairs with justice (Psalm 112:5).
As legend has it, two women followed the hostess to their table in a diner when the woman who was furthest behind stopped abruptly at a table where two men were steeped in conversation. “Excuse me,” she said to the older gentleman, her breath shortened by shock and delight. “Aren’t you Pablo Picasso?”
The gentleman looked briefly at his breakfast companion, who gave a short nod and a half-smile, then straightened his back and turned his head toward the intruder. Looking directly into her eyes, he said, “Why yes, I am.”
Blushing and panting, the woman replied, “Oh my! I’m such a fan. My husband will never believe this.” She quickly grabbed a paper napkin from the meticulously set but unoccupied table opposite the men and handing the napkin to Picasso, she excitedly beseeched, “Please, draw something. Anything. I will pay you.”
Picasso took the paper napkin, retrieved a pencil from the breast pocket of his button-down shirt, and began to sketch while the woman babbled incessantly to the other gentleman and to the few rubberneckers nearby.
Moments later, Picasso handed his artwork to his fan and promptly said, “That will be $25,000.”
Overcome with sticker-shock, the woman’s demeanor changed instantly and dramatically. Sheepishly, she replied, “But that took you less than five minutes.”
“That took me 25 years,” Picasso calmly responded.
Moral of the Story
Know your worth! This is the moral of the story, but not the end of the story.
Your worth is the sum of an equation that factors more than just years of experience. It includes the level of talent, production costs, distribution costs, promotional costs, and market value (the price the market will bear for a product or service).
With a little research and market testing, determining the price of an object is fairly straightforward. Determining fees for services is not always a simple calculation. Sometimes psychological factors play into the equation.
For example, while promoting “Gravy Wars,” I sold companion products like branded T-shirts and aprons. These ancillary items were meant to support book sales, so the markup was modest at best. One of the items I purchased in bulk was a heavy-duty wooden spoon. I thought it would be a hit at just $8, but it did not sell. After a few unsuccessful vendor events, I dropped the price to near cost, $5. It still did not sell. I did not want to give the spoons away because I knew they had value. After several months of meager or no spoon sales, I took a chance and increased the price to $10. They sold!
Sometimes people equate value with cost. It’s simply a function of psychology.
My husband has experienced something similar with his carpentry business. He built his solo business by word of mouth. Now retired, he typically charged customers for time and material, and his hourly rate was consistent regardless of the job’s location. Several times throughout his career, he lost bids in affluent neighborhoods because of skepticism about his modest rate.
Balance
Unlike pricing a product, determining the worth of your time and talent can be challenging. In addition to skill level, experience, production costs, and market value, you must factor your own psyche by setting a rate with which you will be comfortable, not resentful for undercharging and not guilty for overcharging.
Years ago, a developer told me a story about hiring a woman to clean homes and buildings after his construction crews left. She was happy for the work, and he was happy to employ her. Because she worked alone, each project she was assigned took a bit longer to complete, which the project manager calculated at the outset. The busy developer also contracted with a cleaning company that handled larger projects and tighter deadlines by deploying three or four people per project.
Even though several people were assigned to each project on the cleaning company’s roster, the woman who cleaned alone became resentful when she learned that the cleaning company was being paid more per project than she was. She immediately demanded to be paid the same. Her reasoning was ill-formed, but her resentment was something the developer knew he could not fix, so he paid her what she demanded that week and then never assigned her another project.
While it is helpful to know what competing service providers charge, it is not always possible to understand the full scope of those charges. The market will help you determine your fees, but you also must be secure enough to know when to reduce your fee and when to walk away if the customer is not able or willing to pay your rate.
Above all, be honest. When in doubt, take your concerns to God in prayer.
Lorraine Ranalli is an author, ghostwriter, and soft skills trainer, with a background in broadcasting and corporate communications. Impact: Deliver Effective, Meaningful, and Memorable Presentations is Lorraine’s reference book for the communicator’s toolbox. Inspired by life experiences, she has passionately facilitated Ascension’s Joy-Filled Marriage program for nearly two decades. Wife, mother, and Delco proud round out her credentials.