Over the weekend, we decided to watch an old movie. When I say old, it's not really old. We watched “The Matrix” and it's now 20 years old (1999), so it's been almost 20 years. If you haven't seen it, it's about this alternate universe or alternate reality. And that's kind of what I want to talk about today.
Time Is Money
You've heard the term time is money, right? Well, I think that might be an altered universe. Here's one of the things. Society really values time with money. If you think about it, and I'm not trying to get political here or make any stance or statements, but people tend to get all up in arms when they think about somebody making $15 an hour for a entry level job. But it seems like nobody bats an eye when somebody making $15 million a year to run the company that they work for right. Now, if an hourly worker worked to 2000 hours a year at $15 an hour, they would make about $30,000. But the CEO makes $7,500 per hour. Think about that.
In one day, the CEO makes more money than the average worker makes in a year, but they both make the company money. If you think about it, one is how the company makes money. Some of them may be flipping burgers, other may be stocking items or at the cash register, it doesn't matter. The bottom line is that those people are at what we call the front lines. The other one is there to maximize how money is made. And they orchestrate a team of people to come up with the philosophies and to figure all of that stuff out. But only one of those two can be automated, and that's one of the reasons why there's such an uproar.
We're not here to talk about $15 an hour jobs or CEOs. We're here to talk about the concept of time is money, and here's what I want you to start thinking about. Stop selling your time. How can you do that? You first have to get them to understand the fact that they're not buying your time, they're buying the results of what your time produces.
Trading Time For Money
Let's look at time. Time is a commodity. Time can be a negotiable item. For example, obviously there are strikes based on how much money or how much benefits people get, which is money, but the thing is is people can always buy time for less. One of the things in the web business is that you can buy a website from somebody who is in the United States making maybe $100,000 a year who really knows what they're doing. Or you can go over to India and get it done for $10 an hour. Or even better, you can go buy one of those self-made things where you're paying a company, where you can go in and do exactly that: build your own website and not pay anybody.
Now, I have a story behind that. There was a guy who I was doing web work for and wanted an additional page. And I told him, I said, “I'll do another page for you. It's going to cost you $150.” And he went, “Well, I don't want to pay that. I can do this myself.” And he did. He went in and created his own website and he made bundles of pages. And I asked him, as a friend, and I said, “So how'd that go?” He said, “Aw, it went great man. It only took me about 40 hours to get this done.” Now, if you value your time at $100 an hour, that would be $4,000 worth of time. If I had said, “Hey, I could save you about $4,000 just to let me do this for you,” it would have a completely different connotation than if I said, “Hey, for only $150 I'm going to build you a page.” Right?
So, that's what you have to do. You have to start selling value. Value is defined in one of three ways: either through outcomes, through money made or saved, or the cost of time. Just like that example I talked to you about. So how do we sell value? Well, there are three ways that I'd like to talk about today.
Underpromise & Overdeliver
The first one is underpromise and overdeliver. Find out what your client, or your prospect, or the person buying whatever it is you're selling values, and then give them a creative, positive visualization of the outcome of what they're going to get based on what you're going to deliver. So you may or may not be able to deliver that, but you want to find the lowest common denominator.
One of the things I say is for every dollar spent, you should make three. So if I can sit here and say, “Hey, if you spend a dollar with me and I make you three, you're going to be happy, right?” and they go, “Yeah, absolutely.” So if I can deliver $5 or $10 on every dollar they spend, man, am I a hero. So the key thing is get them to understand that you can reach a certain benchmark, but try to give them more. Then they'll keep coming back for more because they're going to want that.
Pay For Performance
The second possibility is pay for performance. In other words, when I achieve this goal, you will pay me $3. Now that may be great for them, but that might not be great for you, and there are multiple reasons why. First and foremost, you have to negotiate based on the results, and the risk is in your hands, meaning you may not always be able to control the outcome. What if you have to do something, and they have to do something, and you do what you needed to do, but they don't. You don't get paid, right? The other thing is you may or may not be able to control how that is measured. So if you're going to do a pay for performance style thing, there better be quite the pot of gold at the end of the rainbow because you're taking a lot of risk. And that's one of the things you have to manage, but sometimes that might work out in your favor. Again, you're not selling hours for dollars. You're selling the results.
The next possibility is reverse-engineered time. Now what do I mean by that? Okay, I remember that guy who makes a hundred bucks an hour. Well, what if I could go in and save him five hours per week? That equates to $500 a week that I'm saving him in time? That would be $2,000 a month. Now is that $150 worth the $2,000 a month return on investment? Absolutely. Would you do that every single month? Absolutely.
So that's the key. But you have to keep reminding them that before they were losing five hours a week. And if they're only spending $150 and making $2,000, that becomes the status quo. And sooner or later that does not have the same value. So make sure you're continually re-evaluating and also reinforcing to them on the benefits that they're getting from what you're providing. Make sure they understand the ongoing value because otherwise it can become complacent and start to look away from your services and be wooed by another solution!
Let me give you some final thoughts to think about. First and foremost, have a plan to either exit or move them up to another level. Sooner or later, you're not going to be able to deliver the same amount of value, or they may not perceive it. So maybe you have to do more to get them more value. The next thing is realize that your results and their results are going to vary. If you can create multiple of these, you'll be able to figure out what's going to work best on the average person. And finally, keep polishing your service and keep polishing your messages.
In the movie The Matrix, the hero Neo finally gets to see that the world surrounded by everything that he thinks is real is really computer code. So you need to crack the code of selling your hours for dollars.
I would love to hear your thoughts on this. Comment below and share your thoughts, ideas or questions about showing the concepts presented. Have you had to overcome any of the presented concepts? What worked and what did not live up to expectations? Do you have any ideas or advice you could share?
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