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Are you afraid of raising your rates?

Blog, Career, Money

“Those who can’t build value, have nothing left but to compete on price.” Paul Strikwerda

At the end of December 2011, Alex Rodriguez had earned $39,000,000. That’s 33 million in salary and winnings from the New York Yankees, and 6 million in endorsements. Not bad for a year’s work.

Do you think he’s worth it?

In 2006, entertainment tycoon David Geffen sold Jackson Pollock’s painting No. 5, 1948 for 140 million dollars. Assuming you had that kind of spare change, would you spend it on a painting described by some as “stunning drip”?

Can you tell me why 15-year old actress Abigail Breslin reportedly made $65K for 5 hours of voice-over work for the animated film “Zambezia”? Yes, that’s $13,000 per hour!

Let’s be honest: what did these people really do?

Read the rest of this story in my new book. Click on the cover to access the website and get a sneak peek. Use the buttons to buy the book.

Making Money In Your PJs cover

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Filed Under: Blog, Career, Money Tagged With: Abigail Breslin, Alex Rodriguez, David Geffen, dot com bubble, Double Dutch Blog, Dutch voice over, Herman Cain, Jackson Pollock, law of scarcity, Nethervoice, New York Yankees, Paul Strikwerda, perceived value, Peter Drucker, placebo reactors, Saatchi & Saatchi, Triggerfish Animation Studios, value added pricing, voice-over, voiceover, voiceovers, Warren Buffet, Zambezia

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Comments

  1. Mike Harrison says

    December 9, 2011 at 11:38 am

    Some folks spend small fortunes on baseball cards and other collectibles. When they show their collections to others, the price they paid for the items is secondary – if considered at all. What is important to the collector is that they will forever bask in the value of their purchase.

    Another great ‘window to wisdom’ from Paul Strikwerda.

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  2. Steven Lowell says

    December 9, 2011 at 12:40 pm

    I was given a taste of this just this week. To break it down:

    Budget quoted was ***

    I quoted higher because I live in NYC, and hey…its expensive.
    They asked me to do the job thinking that was an automatic acceptance of what they quoted.

    I stated, “Is my quote ok with you? The quote covers *****”.

    Client states, “Can you do it for this amount?”

    You can imagine it was lower.

    I expressed, “I have other things going on right now. Sorry.”

    The next day, client wrote back and agreed to my quote.

    What do I think happened?

    I think an intermediary tried to save money for someone else, and they were in a time crunch.

    I did the work and got paid, but part of me feels that will be the last I hear of these folks.

    Oh well…life goes on. If I couldnt get over it. I would need to get out of it.

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    • Paul Strikwerda says

      December 9, 2011 at 12:51 pm

      Great example, Steven!

      Purchase decisions are never based on price alone.

      “If that were the case, Mr. client, I will send you your order in two years, okay? I’ll also make sure that it will fall apart in two weeks, and you won’t be getting your money back. Don’t bother calling me, because I just closed our customer service department.”

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  3. Paul Strikwerda says

    December 9, 2011 at 12:41 pm

    In the case of money, stamps or baseball cards, it’s the symbolic value that matters.

    Voice-over professionals can build real value because their voice can inspire, entice and invite people to buy products or services. A $1,000 investment can lead to hundreds of thousands of dollars of business.

    It’s not about how much you spend. It’s about how much you make.

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  4. Stacey Stahl/CEM says

    December 9, 2011 at 1:07 pm

    Great post, Paul!

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    • Paul Strikwerda says

      December 9, 2011 at 1:11 pm

      Thank you, Stacey. Remember: your added value is always higher than your rate.

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  5. Robert Churchfield Jr says

    December 9, 2011 at 3:36 pm

    A couple good posts today, Paul. I dug your “Awedition” and this blog is another great and relevant piece.

    Thanks for providing this great value!…perceived, or not…chuckle…

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    • Paul Strikwerda says

      December 10, 2011 at 9:50 am

      That’s funny, Robert! For those of you wondering what the “The Awedition” is, here’s the video:

      http://www.youtube.com/watch?v=n5eOQ5pHrg4

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  6. Eric Anderson says

    December 10, 2011 at 8:04 am

    …..And yet more sage advice and direction from a Credible Master. Much Obliged Paul!!

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    • Paul Strikwerda says

      December 10, 2011 at 9:51 am

      I don’t know if I’m a master, but I strive to be incredibly credible! Thanks Eric.

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  7. ciaran says

    December 10, 2011 at 8:40 am

    I think this piece ties in with your recent article about the marketplace for creative industries as a whole being flooded with amateurs. If you charge a higher/premium rate, customers will assume you’re doing a better job, you’re a true pro and all that, and so treat you accordingly. Similarly, if you undercharge, motivation and attention to detail goes through the floor – as firefighter Red Adair said, “If you think it’s expensive to hire a professional, wait until you hire an amateur.”

    Parting shot – http://www.winwithoutpitching.com/why-i-charge-more – always relevant!

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    • Paul Strikwerda says

      December 10, 2011 at 10:03 am

      You’re right. This piece does tie in with my three previous posts.

      I loved the Open Letter to Future Clients. Blair’s comments echo what Jason Fried of 37signals had to say in “Those Bloody Bottom Feeders.”

      “It’s very safe to charge low rates, because you don’t have to prove anything. But as soon as you charge a customer a good price, it gives them the power to demand something from you, such as good quality and great service.

      Those are the types of pressures you want on you as a small business owner. You want to be forced to be good. Charging for something forces you to be good.”

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  8. Rick Lance says

    December 10, 2011 at 12:10 pm

    Once again, Paul, this article is so well written.
    You really broke it all down. Perceived value is what it’s all about.
    I have to retweet this since it applies to all types of industry.

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  9. Paul Strikwerda says

    December 10, 2011 at 1:52 pm

    I’m glad you perceived this article to be valuable, Rick. Sometimes it’s a bit scary to realize that we build our lives on perceptions, and yet that’s what I believe we do. To perceive is to believe.

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  10. steve hammill says

    December 10, 2011 at 7:41 pm

    Don’t get me started on baseball stars…or the world of art, where there are more idiots in power than sane people.

    Who the hell is Abigail Breslin? Good lord! There’s nothing that she can do for $13k/hour – that can be mentioned in polite company – that any high school girl who really wants to be a star can’t do. …and an average 15 year old might be able to turn that unmentionable crank too.

    *** Maybe the producer’s son wanted to meet her. ???
    *** Maybe the producer wanted to discover if Sarah Jessica Parker is as easy as she appears on “Sex and the City.”

    Even though no one talks about it anymore, quid pro quo is alive and well in show business. Terrible, but true!

    Fortunately, I can currently be aloof to offers of work for idiot’s pay. With good fortune, I’ll stay immune to this crap for another year while my health improves.

    At that point, the question revolves around slopping around in a V/O gutter; or riding with satisfaction in a new F350 4X4 on the way to a 3 week vacation in FILL_IN_THE_BLANK.

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  11. Paul Strikwerda says

    December 10, 2011 at 8:30 pm

    Abigail Breslin is one of the youngest actresses ever to be nominated for an Academy Award. You might have seen her in Little Miss Sunshine or Kit Kittredge, an American Girl.

    Have a great vacation, Steve!

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    • steve hammill says

      December 10, 2011 at 10:20 pm

      I looked her up before I posted, Paul, but until then I didn’t know of her. The wiki article didn’t change my mind, maybe that fraudulent wiki guy wrote the article 😉

      Have I become much less tolerant of happy horse manure since they took my morphine away…or have I always been so curmudgeonly?

      🙂

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  12. Paul Strikwerda says

    December 11, 2011 at 7:52 am

    I’ve seen both “Little Miss Sunshine” and “Kit Kettredge” and a few other Breslin movies. I don’t need Wikipedia to tell me how talented Abigail Breslin is. If the animation studio decided she’s worth 65K, she’s worth 65K.

    Some find it hard to accept that this 15-year old girl makes more in five hours than they do in a year. Others call it: living the American Dream.

    There are many sides to every tale, and it’s up to you and me how we choose to look at it. Our personal history, attitudes, beliefs and values, color how we perceive reality, and it determines how we label that view of the world. If we put on glasses with a gray filter, that’s what we’ll see.

    I’ve been called “snarcastic,” “European liberal,” and all sorts of other names. Whenever I hear these attempts to stereotype me, I fondly remember the words of one of my teachers:

    “No matter who you think you are, you are always more than that.”

    Happy healing, Steve!

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    • steve hammill says

      December 11, 2011 at 5:51 pm

      >>>If the animation studio decided she’s worth 65K, she’s worth 65K

      I whole-heartedly agree with that, Paul.

      That said, no matter how talented she is, you can find a dozen more 15 year olds of equal or superior talent.

      And if in ten years her body of work resembles that of DeNiro, Roberts, Jackson, Jolie, Hanks, or Bullock – I’ll happily eat my words. 🙂

      BTW – I’ve never stereotyped you beyond liberal, that I recall, Paul. It doesn’t matter, I still enjoy your stuff. 🙂

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  13. Tim says

    December 16, 2011 at 11:05 am

    I’m sort of in this dilemma both in my company and as a freelancer. My company offers a service with a premium price but we come with far better reliability and support but everyone just looks at the bottom line. Likewise, as a freelancer, I don’t have the word of mouth reputation to charge a high rate so everyone expects me to work for pennies.

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    • Paul Strikwerda says

      December 16, 2011 at 11:37 am

      Hi Tim, I don’t know how much clout you have within your company to address this issue. In your own business, you are the one who sets the rules.

      In my experience, not every client is a price shopper. As a freelancer, you don’t want those anyway. They can ruin your business. It’s your job as an entrepreneur to make a value proposition, justifying why you’re charging more.

      Just because you don’t have a word of mouth reputation, doesn’t mean you can’t charge a decent rate. Your rate is a statement about your quality and value. It’s a way to attract the customers you want to keep, and a way to separate you from the lowballing competition.

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  14. Lee Pinney says

    June 21, 2012 at 2:36 pm

    The problem with selling yourself too cheap is that there is no bottom to that pit. There will always be someone willing to take that $50 for three hours work. Sell cheap and make it up in volume? Not for me thank you.

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    • Paul Strikwerda says

      June 21, 2012 at 2:50 pm

      You’re absolutely right, Lee. In the voice-over business it’s impossible to make up in volume what you lose in price. I didn’t become a freelancer to do more for less.

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In this blog I may discuss/review products or books that I believe are relevant to my readers. As a service to them, I often provide links to those products or publications.Instead of having a tip jar, Nethervoice is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com. In other words, as an Amazon Associate I earn from qualifying purchases.

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