Make More Money By Applying Pricing Concepts to Yourself
Do you want to make more money? Get a raise? Be valued by your employer or your customers? Of course you do. What a stupid question. Here’s how.
Turns out, if you understand pricing, you know the answer to this question. Think about it. You are a product! A product that your employer purchases. You have a bundle of capabilities and attributes and they pay you money in exchange for your capabilities. You are a product.
Remember when people buy products, they make both the Will I? and the Which One? decisions. Will I buy something in this product category and if yes, then which one? Some products are purchased immediately after the Will I? decision, without ever asking which one? This happens for products with monopolies, great brand names, luxury goods, specialty items, first to market products and others. In each of these cases, the products tend to be more expensive. Why? Buyers are much less price sensitive when purchasing a Will I? only type product. (You can learn more from my earliest blogs.)
From an employer perspective, are you the ONLY person who can do your job? If so, you are a will I? product and should be able to ask for a raise (assuming your job is vital to your company).
However, most of the time people can be replaced. Hence you are most likely a Which one? type product. They can fire you and hire someone else. Or when looking for a new employee they can hire one of many different people.
People are price sensitive when buying will I? type products. They trade off attributes and price. The higher the quality, the higher the capability, the higher the price. Hence, higher quality better performing products are priced higher than their competitors.
Hopefully the lesson is clear now. You need to be higher performing and better quality than your competitors. As a product, you should always be working on your own product development. You should always be improving to get ahead or maybe just stay even with others.
One way to get ahead is to look at the capabilities of high performing, highly paid individuals. Then work hard at adding those capabilities to yourself. Read books on that topic. Hire a coach. Practice deliberately.
You will likely get better as you mature anyway, but if you take ownership of your own improvement you will get better much faster. You will earn more money because you’ll be worth more to your employer.
One thing to look at is called Deep Work. I just heard a podcast where Cal Newport, the author of Deep Work, described the concept, its importance and how to start doing it. The concept is pretty simple, FOCUS on what you’re doing. He really describes us as knowledge workers and how so few of us focus anymore because we are constantly distracted with email, and texts, and social media, and …
The reason I wrote this blog is after hearing Cal talk I couldn’t help but think this is a way that people can become more valuable to their companies, which should turn into making more money.
There are surely many areas where you can improve. Deep Work is almost certainly one of them. The real point though is to treat yourself like a product. Improve it. If you’re just like everybody else, you’re a commodity. You can’t get a raise. If you’re differentiated though you’re worth more. Raise your income by improving the product called you.
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