The Mumpreneur Hangout for the month of October held on the 29th of October in our usual circle style set up. We discussed the topic for the month, which was “Why women have this phobia for billing appropriately”.
Many of the Mumpreneurs shared their personal experiences around this and how they have managed to deal with it. I know most people will ask; does this phobia exist? Why will anyone be afraid to charge? Within a few minutes of discussion these issues started to come up and we had a rich discussion around the reasons why many women under-price their products.
This was the first issue raised. Some of the mumpreneurs lamented that the locations from which they operated did not allow them price above a certain threshold because the customers in that area would snub their product. A typical example – A mumpreneur has bead making shop located in the Ogba retail market area said even though she used expensive materials for her products and spent a lot of money training with one of the expensive schools in Lagos, she felt she couldn’t price above a certain amount because people in the area wouldn’t buy. Sometimes, we limit ourselves by location, when the world has gone global. Instead of underpricing, look for other strategies to expand your reach beyond your physical location. Besides, never make assumptions, some high net-worth individuals choose to live in the suburbs. They will find you, if you position yourself properly.
By nature, women are caregivers; we give up stuff for our siblings, husband, children and so on. This can easily become a habit that holds us back from making demands even when we are offering a service or product.
The fear of appearing greedy cripples us from pricing appropriately. It’s business ladies! We are in business to profit.
When you are not attracting your ideal customers, the cost of keeping them is higher than the cost of letting them go. We are in business to make money at the end of the day, if the business is not able to do that, we either find ways to cut costs without compromising quality or we increase prices.
Don’t be afraid to let customers go. An underpriced service or product will soon drown your business and you in the long run, if not addressed. Here’s the thing, if your pricing is value-based, customers who really recognize and need this value, will return even if they leave.
One of the mumpreneurs at the event shared her experience. Once, a customer insisted that she offer her a design at a particular price; she gave in to pressure and agreed to a price that was way less than the market value and just a little bit above the visible costs of the design. Upon delivery, the customer complained that she didn’t like it and wanted it revised; this would have eroded the tiny margin she had on the order in the first place so she told her she had to pay an additional charge for the to revision, only because her mum saw her struggling and told her “you are not redoing that thing in this house!”. In the end, the customer used this same design at an event and got a lot of positive feedback. She saw pictures of her in the piece, splashed everywhere.
What is the true cost of providing a service or product? Before you place a price on the product, consider all of the factors of production without forgetting YOU! Your time, your effort, your cost of living spread over time. If you took ill today, would you be able to get health insurance? Do you pay yourself a salary? Do you consider rent, even if you operate from your home?
Let’s also look at other factors; an example someone gave at the event was of her Jewelry making business. The materials are capital intensive and she realized that at the price she was offering her pieces of jewelry, she would not have been able to replace her equipment even if she sold thousands of the pieces, considering other costs. She still found it difficult to adjust her pricing until she said she decided to put herself under pressure by renting an office and taking up some of the bills in the home. For her, this was what pushed her from the habit of underpricing her pieces.
There is often the tendency to take what you offer for granted because it comes naturally or seemingly easy to you. So the thought of demanding payment for it makes you feel like a fraud or cheat.
We feel undeserving and try to overcompensate by going over and beyond to prove that we deserve what we are being paid. This is a challenge that is borne out of the way women are raised in Africa. From my interaction with many women, it is obvious that there is this unspoken rule that women deserve less compensation than men. A woman who tries to push for a raise even in the workplace is seen as greedy and over-ambitious, whereas a man is cheered on and given the raise.
These five points basically summarize the discussions we had at the hangout and the conversation continues beyond this one meeting. One of the things that have helped me overcome this is affirmations; I have a money mantra I adopted from Ese Ark’s book, Naked and I’ll share it below.
Dear Mumpreneur, you deserve to get paid well for your service or product. Offer value and charge for it. Don’t apologize.