It is often difficult for many employees, freelancers, and even business owners to understand, but your worth is more often than not determined by what you ask for.
If you get into an interview for a position and ask for $80k, even if the company you’re interviewing at has a budget of $190k, you will very likely only get the $80k you asked for (given you pass the interviews). From the company’s point of view, it’s a perfect deal. They have no obligation to pay you more, so why should they if you only ask for such a small amount?
The same is true for other situations. Many companies will probably happily hire you to get their software built if you only ask for $50 an hour as a freelancer, and they will have no incentive at all to pay you more because you never asked.
Even business owners and SaaS founders sometimes have problems with those things. They struggle to raise prices because they fear losing customers. Instead of charging $49 a month for something well worth it, they stay at the $19 they started with.
The first realization you need to come to is this: You will never find out how much you are worth unless you start to ask for more.
It is so much easier said than done, but there are a few things you can actually do to determine your own worth and then get into negotiations prepared and well aware.
There are many ways you can research prices and salaries. Just some ideas for you:
You can become friends with a recruiter. Ask them what ranges they usually look for in positions you want to apply to. Many of them will happily share those ranges with you in exchange for a potential opportunity to place you at a company. This works for both employees and freelancers pretty well.
If you are in the SaaS business or offer services, look at your competitor. Which of them have similar offers to yours, and what do they charge? You can take that as an opportunity to do some market research, and perhaps you find a chance to raise your prices.
Just Try It Out
The most straightforward strategy is sometimes the best strategy. You can only find out what you can potentially ask for by doing so. Just go ahead and ask for a raise or raise your prices and see how the other party reacts.
In the case of a SaaS, you can run A/B tests with different pricing models and see how visitors to your site react. You only use a few potential customers and know that you asked for too much in the worst case.
As an employee and freelancer, go ahead and ask for a raise. Prepare a few compelling reasons why you should get more money and ask your manager for a meeting to discuss this. And if this doesn’t work, try to apply elsewhere. You can still ask your boss whether they want to match an offer you get or let you go.
Improve Your Perceived Value
Your perceived value is the sum of all traits, skills, and offers that someone you do business with might use to determine how much they are willing to pay you. For employees and freelancers, that is usually their performance, their skills, and their experience. For businesses, that are typically the services and/or products they offer.
You can always work on these things and form another picture of what you have to offer. Getting a certification or adding a skill to your CV could make a difference of several $10k a year. Adding another feature or tier to your SaaS can justify asking for a few dollars more each month.
Work On Your Sales Skills
Every interview and meeting with a manager where you talk about money is a sales pitch. You are there to sell yourself and either ask for money or more of it. It is your job to tell the other party why exactly you are worth the amount of money you want. The other side’s job is to either conclude you are right or to tell you why that isn’t possible.
The art of sales is to sell what you have at the best price possible. The better you are, the better the outcome. Good salesmen can sell anything, but they also sell the right things to the right people. They understand what the other party really wants and offer them precisely what they need. It’s not about selling anything in this case, but also knowing when you have the wrong product for the right people.
Work On Your Marketing Skills
Marketing is the art of letting people know you exist, showing that your product is the best thing to solve their problems and that you are the best person to give them exactly what they need.
Unlike sales, marketing aims at creating awareness without specifically targeting individuals. It’s not about calling a specific person, scheduling an appointment, and then talking them into buying something. It’s about letting people know something exists and awakening the urge in as many of them as possible to buy your product.
A better landing page can increase subscriptions by 10+%. Being known in the community can lead to incredible job offers. The better you become at presenting yourself, the more you can often ask for. It becomes easier to put a value tag on your offer because you are open about what you do and often showcase publicly what you are capable of.
The last and most important thing you need to do is to become confident in yourself. You must believe yourself when you ask for something. If you can’t confidently ask for that raise because you don’t think you deserve it (hello impostor syndrome), your negotiation partner probably also won’t believe it.
When you are confident, your tone and posture usually reflect that. You’ll be able to express and explain your worth way more easily this way. A good manager will notice that you are dead serious about the matter, and this can have a pretty positive effect on negotiations.
As a business owner, you also need to believe in your product. Your product is not “probably the best,” it is “the best.” You solve those problems awesomely well because you can back it with many happy customers. Don’t be shy, and express the worth of your products properly. You also don’t need to lie but don’t try to talk your own product down because you want to be humble.