You want to make more money, you want to feel better about yourself,
you got to listen to this episode of the Inside BSS Show.
Hey, now I'm Dave Lorenzo.
I'm the godfather of growth and I'm here with my partner and my friend Nicki G.
Good morning, Nicola. How are you?
Good morning, Dave. I'm great. How are.
You?
I'm doing absolutely fantastic and I know you're looking at this goofy
headset that I'm wearing, folks.
We're trying out a new mic system and I'm the Guinea pig and I'm wearing an
operator number one headset and the cola will not let me forget it.
So today's topic is no guilt or a lack of guilt or why
you shouldn't feel guilty when you're running your business.
How guilt will weigh you down in running your business.
So I'm going to tee this up for Nicola and I'm going to start by talking about
how guilt will hold you back and I'm going to share
kind of an experience with you and we can discuss it and we can talk about ways
for our entrepreneurial friends who are listening to remove guilt
from their lives or from their business.
So anytime I go to sell to someone and I
have the feeling in the back of my mind that they can't afford my
service,
I used to kind of pull my punches and maybe a few times
I would cut my pitch short and perhaps not
make my A level offer,
my top tier offer and then drop down into some of the
lesser expensive offers,
and I would just go to one of the lesser expensive offers in the first place
because I would feel guilty that the person across from me might not have enough
money to afford my services.
Then something happened to me a number of years ago, more than 10 years ago,
which completely changed my feeling about this, changed my mindset.
Here's the scenario.
Somebody gets on my email list and they're getting a weekly email newsletter
from me and they call me and they say,
I want to talk to you about using your services.
I need your help growing my business. So I say, okay, fine.
We schedule the appointment and my first question to them is,
give me some background on your business. What's your revenue?
And this person says, my revenue is like $150,000,
and my top tier coaching program at the time was like
$45,000. And I immediately thought to myself,
this person's doing 150 grand a year,
they're never going to pay me 45 grand to help them.
This is crazy.
So rather than do the entire discovery call the way I
normally would and ask all of the questions that I would normally
ask,
I felt guilty doing that. And then saying to them,
here's what you need to do. You need my maximum intensity program,
which is $45,000 a year.
Rather than do that because I felt guilty taking $45,000 to a person
who told me they only,
their whole business was only doing $150,000 a year,
which meant they were probably taken home, what? 45, 50 grand?
I was going to take their last 50 grand for me to coach them.
So rather than do that, I pulled my punches and I said, listen,
I have $125 a month membership club. You need to join that.
And they pushed back and they said, no, no, no, no. I need one-on-one help.
I need one-on-one help. And I said, well,
my one-on-one help is really expensive.
And they immediately had a visceral reaction and they said,
you don't think I'm worth your top tier program?
And I said, what do you mean you don't think I can be helped? And I said,
no, that's not what I have,
but you just told me you only make your business is only $150,000 a year.
What could you be bringing home? You're not going to pay me.
How much is your top tier program? And I said, it's $45,000.
And they said, I just sold my business,
my other business for $18 million and you just lost
out on a $45,000 a year client. And they hung up the phone.
And I immediately thought, well,
I looked at myself in the mirror and I said a word that begins with A and ends
with whole. And I pointed right at myself because I blew it.
And to me,
what I realized over time was that guilt
about taking money from somebody who I perceived didn't have it,
that guilt that I projected is what prevented me
from signing up that client.
And so many times it prevents us from getting what we want.
Think about it another way, Nicole. Think about it from a financial perspective.
I grew up in a house where my dad worked for I B M for 40 years.
My mother worked for I B M for 18 years. They had nine to five jobs,
weren't entrepreneurs, and they made a very nice living.
Put my sister and I through school,
we went to private Catholic school growing up,
we lived in a nice neighborhood, we lived a very nice life,
but we didn't spend a lot of money because we were a middle class family and my
parents did everything they could to give us a great life and it is a great
life. It was a great life. But there was always this thing about, well,
how much does this cost and can we afford it?
And we'd have to do a careful analysis.
A couple of years we drove to go on vacation. We didn't fly because I don't
know, maybe the economy was bad or there was a lot of inflation or whatever.
So what does that project on me as a kid growing up? Well,
it gives me a feeling, a sense of money,
and my parents would call it financial responsibility,
but it also instills a level of guilt in me about
listen,
for years I drove a Toyota instead of driving a Lexus because oh,
it's the same car. Why do I need to pay for the additional brand name?
For years,
I opted to fly in coach instead of first class because hey,
it's not our business class because hey, it's not worth it.
It's just a little bit bigger of a seat. The plane gets there at the same time.
But what I didn't realize, Nicola,
was how that guilt permeates through
the rest of my life and the way I act and the way I
behave. So picture this, right?
I go to an event and I'm the keynote speaker at an event,
300 people in the event, I'm the last person to speak.
Everybody's heading to the airport afterwards and 25 people from
that event get on a plane.
Two of them are sitting next to me while I'm sitting in the middle seat in coach
and I just got paid 15 grand to give a talk and I'm sitting on the middle seat
in coach next to other people who are in the audience.
What does that do to my brand?
So the guilt that we feel,
we need to release ourselves from that and make decisions that are
best for us in our business and not allow those feelings of guilt
to change the way we behave. What do you think? I mean,
that's a lot of baggage that I just unloaded here in this therapy session.
So you tell us about how crazy I am now.
You're not crazy,
and this is probably why we get along so well is because there's so
many similarities even in our backgrounds, Dave,
we didn't grow up with a lot of means either.
Family vacations also included driving in the car to places we didn't fly
anywhere.
Sometimes it was 12 hours to get to the nearest beach from where I lived and
nowhere Pennsylvania.
So I'm glad you said that because it really helps
put this into context. We can
have guilt developed in our lives at a very young age and not even
realize it. You can also have guilt developed later on in your life as an adult,
but you've got to be aware that you have it because when you start working in
business,
it is going to drive some of the decisions that you're making and you've got
to be able to recognize it and stop it because it is bad for your business.
I really face this head on when I started working on my own and I knew
what my services were worth and what I ought to be charging in the market for
them. But you face these small,
sometimes it was small business owners and I would feel bad asking for the rate
I knew I should be charging. And when you give into that,
you had a great example,
you lost an excellent opportunity where you should have charged that amount
and you can have other circumstances where for me,
it was ending up with a client that was not a good client because of it,
because I undercharged what I should have because I felt bad.
That's not a good business decision and having worked with a lot of businesses,
I see guilt in other aspects of the business. Maybe it's an employee.
This is one I see fairly often where it's someone who they care for the
employee, so the owner keeps them there,
but they're a terrible employee. They can't do their job,
so they keep finding new positions for them,
but it creates issues throughout the organization because they're identified by
the rest of the employees who work with them,
their peers as someone who's not pulling their weight but is there because the
boss likes them.
That also creates problems for the work environment that you've created.
So if you are a business owner, you cannot allow guilt to drive your decisions.
You are running a business. We are capitalists.
That's why you have your own business.
You have to be focused on how can I make money for my business and make the
right decisions? And that requires removing the guilt from your decisions.
It can be very difficult, especially,
let me give you a particular example with family run businesses.
That's where it's really prevalent because you have the family
obligations pulling on your heartstrings like someone was laid off,
I need to give them a job.
They're a family member and they never seem to pull their weight at least most
often pull their weight like someone who is outside of your
business and is someone you don't have that kind of relationship with because
it's just a different dynamic and it makes it very difficult for you to drive
the revenue in your business that it ought to be achieving when you have these
issues of guilt that are terminating the organization.
Every business, every family business has Alfredo I love, we call 'em,
it's Alfredo from the Godfather. Everybody's got Alfredo,
and it's just so much easier to pay Fredo to go away than it is to give him a
job in your business. Just give him a no-show job,
pay him to go away so that he doesn't wreck the rest of your business.
There's another aspect of this guilt that I think we
need to address today,
and that's when the guilt creeps into how you price your
services. You should price your services now,
and this is particularly important for you as a professional service provider,
but if you're selling products, it matters too,
and I'll cover both sides of the equation.
You should price your services based on the value people get from
receiving your services.
You shouldn't price your services based on what people afford because if you
price your services based on what people can afford,
you're not doing yourself justice and you're going to end up working harder than
you should to make the money that you deserve for the time and effort you put in
and your profession. Your current profession is full of people
who adjust their rates and it's hourly rates.
I can't resist taking a shot at hourly rates.
It's hourly rates that they adjust because well,
people can't afford it.
So what I'm going to do is I'm going to give you a pass on this one and I'm
going to address your brethren who are criminal defense attorneys.
When I first started working with lawyers,
I worked with a lot of criminal defense lawyers because a really good friend of
mine was the president of the Florida Association of Criminal Defense Lawyers
and then the National Association of Criminal Defense Lawyers,
and he got me in front of them on many occasions,
and I will tell you that there's nobody I like having a beer with more than
somebody who's a criminal defense lawyer. They have the best stories,
but it's ridiculous how they'll adjust their
pricing to handle some of the most complicated stuff.
I know people and the criminal justice system only work because good lawyers are
willing to defend people who do bad things.
So let's just,
if you're listening to this now and you've got a problem with people who defend
murderers and rapists and people who commit hideous crimes,
I understand that you may have a problem with those people,
but if there aren't people out there who are willing to defend these people,
the system may not work for you or someone you care about when you're accused of
something and you didn't do it. So we got to set that aside.
Suspend your anger about people who defend criminals. Here's the thing,
I know a lot of people who are death penalty qualified here in Florida who do
death penalty work,
who don't charge fees that are worthy of the
heroics that they pull off, and they do that because they think to themselves,
I got to perform this public service. Well, no, that's guilt,
okay? You telling yourself that you're performing a public service,
that's guilt. You're bringing your baggage to this.
You can take one case a year that you do pro bono and perform your public
service and then charge an S ton of money for everything else you
do so that you get paid what you deserve.
Rich people commit crime, poor people commit crime.
There's nothing that says you only have to represent poor people.
You choose who your clients are and it's a function of guilt that you choose the
crappy clients. So stop doing that. I'm giving you dispensation.
That's what they say in the Catholic church. I'm freeing you.
I'm giving you permission to feel free of the guilt of
choosing crappy clients. Choose better clients.
You are worthy of the better clients.
The crappy clients will find representation. You can take one a year,
but the crappy clients will find representation. Now,
when it comes to product manufacturing,
if you put a ton of r and d research and development into your product,
if you put a ton of effort into your product, getting it to the market, right?
You have a product that has to have shelf space and you got to fight and claw
and scratch to get the shelf space,
maybe you got to pay the vendors to give you shelf space.
That's how stuff gets in the supermarket. Products pay for shelf space.
You deserve to charge a premium price.
If your product is better than everybody else's product, you deserve that.
Do not feel guilty, do not feel guilty. Other people,
especially people in procurement,
and these are people who I wish would just find another job,
but people in procurement will play on that guilt and try and get you to lower
your price. Don't do it for their reasons.
The only time you should lower your price is for your own reasons,
and you shouldn't let guilt play into that decision in any way possible.
I'm sure you want to respond because I attacked your brethren
in the legal profession because you charge the same way people in the oldest
profession charge. So have at it, do what you want to do. Well.
My brethren on the criminal defense side may not like my response on this one
because I'm going to agree with you, Dave, mark, this day down.
I agree with you.
You should not reduce your rates to take on clients because you
are one,
not recognizing the value of the services you know that you provide,
which command a higher rate for them. And two, I assure you,
you'll be buying a client that is not going to be a good client to you.
You want more of your best clients. You are not going to do that.
You're not going to get them in the door by lowering your rates.
You have excellent clients know why they're excellent clients and replicate that
people will pay you what you deserve.
That is a lesson that I learned the hard way myself.
You will find clients who will pay your rates and will see the value that you
offer and you will have a much more fulfilling legal career if you
do not lower your rates,
but you should do this in any professional services space. Do not lower your
rates to get those clients. Look,
and this is with the exception of you're starting out.
I get that everyone's starting out. You got to make money,
but when you have a demonstrated service, you're an excellent professional.
Don't do that to yourself because this is how you're making money.
You deserve the rate that you're charging. Now, aside from that,
we've got to just cut out the guilt from running a business.
You are running a business, you're making money.
It should not be an exercise in what your feelings are about it.
It has got to be about doing what is best for that business to make sure that
you are maximizing the value of it.
You're going to appreciate that and live a much better life as a business owner
when you're focused on it. So remove the guilt.
Yeah,
guilt has no place in determining price or how hard you go
after you sell to go after a client.
And I see this all the time in people who sell, and I've done it myself.
I just told you the story.
I wouldn't sell as hard to somebody who I thought couldn't afford my
services. Now,
I sell hard to everybody and I don't feel any guilt when somebody
says, Hey, I don't like to be sold to.
The way that I look at it is selling is helping,
and if I don't sell to you, you don't know that I can help you.
So I got to be a savage and do everything I can to go after that client
because that client is better off with me than without me.
And to put a bow on this entire discussion before we wrap it up,
I talked about something I can't remember, Nicola,
if it was on the Sunday special or if it was in a regular
show, but do you remember, it's got to be a couple of weeks ago now,
almost a month ago,
I talked about somebody who wanted a consultation with me but didn't want to pay
my consultation fee. You remember that? All right,
so I got an email from this person and maybe they're listening
to the show and it doesn't really matter to me if they listen to the show.
I got an email from them asking me for the link to my consultation page now
ready to pay to see if there's something we can do, I can do to help them.
I replied to the person. I said, yeah, sure, I'll send you the link.
I didn't send it to 'em this week. I knew I was busy.
I was doing a little traveling.
You and I had an event we did together yesterday,
so I knew I had a lot of stuff going on this week, so I didn't send it to 'em.
I'm going to send it to 'em next week.
Remains to be seen whether they'll actually pay it or not,
but good on them for recognizing and taking the step to
say, Hey,
this is valuable and maybe I should pay for it.
Whenever that happens to me and somebody says, oh my God,
because as we're recording this,
my consultation fee is $850 and you get an hour with me for the
$850, but you're not buying an hour.
You're buying 33 years of business experience for that $850.
And I recognize that there are people who just swerved off the side of the
road as they're listening to this show and they're like, Jesus Christ,
this guy charges $850 an hour.
I'm a lawyer and I only charge $400 an hour and I've been a lawyer for 15 years,
blah, blah, blah. It's not my problem that you only charge $400 an hour, right?
I know people who are nine, 10 year lawyers in the bankruptcy space,
they're charging $1,100 an hour. Now,
there are lawyers at Gibson Dunn that charge $1,600 an hour, okay?
I feel bad that I'm only charging eight 50. I feel like I'm taking food out of
my kid's mouth by only charging eight 50.
So God bless me for doing this service for you and charging less.
The way that I look at it is my lifetime of experience,
if you ask the right questions, is worth probably quadruple what you're paying.
So you should thank me that you get to pay $850 an hour,
and that's not arrogance.
That's just recognizing the value that I provide.
There are people out there right now.
I worked with one for years and years and years.
There's a guy named Marcus Buckingham. You can look him up.
He was the original author on First Break All the
Rules and Now Discover your strengths to bestselling books.
He was at the Gallup organization.
His office was right next to mine in New York City when I started the Manhattan
Division of Consulting for Gallup. And at the time that we were
working together when I was a little baby consultant, he was getting,
at that time, he was getting, I think $45,000 for a keynote speech,
and I was getting 1200 bucks to give a speech.
And at that time,
he's a great speaker and he has a British accent,
which is worth 10 grand in and of itself.
The British accent alone is worth 10 grand.
So his content was almost
identical to the content that I was delivering because it was all based on
Gallup research,
but the experience he had and the stories he shared were
far more valuable because I didn't have that experience.
He had been at Gallup for, I think at the time, 15 years,
and he had had 15 years of additional experience working with dozens of
different industries using the things that Gallup had discovered in those
industries. And in that one keynote speech,
if there were 500 people in the room,
a hundred people could come away with things that could transform their
business.
So the event planners that booked him to speak and paid him 45 grand for that
talk, they could say, Hey, listen,
you're going to get transformative material from Marcus Buckingham,
the author of these two books, who has had all of this experience.
Or they could have booked Dave Lorenzo who would share Gallup's research and at
the time didn't have any of the experience,
but they could probably get $3,000 for attendance at an event where Marcus
Buckingham was the keynote and they could probably get like 50 bucks for an
event where Dave Lorenzo was the keynote because of the breadth of experience
that Marcus had. Same content, different level of experience,
different stories, different impact on the audience,
and that's the difference between value and
not delivering value, and we shouldn't feel guilty.
Marcus never felt guilty a day in his life.
Now he's charging a hundred thousand dollars for a keynote speech because he's
got 25 years of experience, and he's never felt guilty a day in his life.
God bless him, and I hope he's doing well,
and I hope he's listening to this and thinking as he's sipping his tea,
I'm making a ton of money and he's right, or I can't do a British accent,
otherwise I would've done So. No guilt. We don't have guilt.
People are going to pay it, so why are you not charging it?
I have to reiterate the point that you made,
which I think is the main takeaway here, Dave,
which is that you are not just paying for that hour of time when we are talking
about the fee for speaker or it's an hour for a consultation with someone.
It's not just an hour of time of talking about an issue.
It is all of your experience that goes into that hour because that is a lot of
value that you are delivering in that short window time.
I've personally been burned by this,
and I tell you that from experience because oftentimes we learn the best lessons
from experiences, especially the ones that did not go well for us. I delivered,
and I'll tell this in a quick story.
I delivered a pitch to a company for a lawsuit that I wanted to handle
on their behalf. It had been filed.
Sometimes you get the opportunity to go to the Bakeoff, we call it,
and there's two others that are there. They're pitching there themselves too,
and you've got to provide something that the other two aren't going to provide
to have the best pitch. And in the end,
what happened was we didn't get the business. This was several years ago,
didn't get the case, and I had delivered a strategy that I thought was like,
how could someone have taught that? I really thought this through?
There's no way that they thought about this as much as we did,
and it comes to find out that they used the strategy.
They just used the cheaper option to employ the strategy,
so do not do it because that value that was delivered in
that short period of time was immense.
It was years and years of experience and thinking that went into that to have it
taken and used by someone else. So do not sell yourself short.
You're running a business.
You need to be selling your experience in those windows of time that you're
selling or with your product on the shelf.
You're selling everything that went into you developing that product,
the way you've marketed, the way you've positioned it,
to get that premium to sit there on that top shelf.
I love it. This is the Inside Bs show. My name is Dave Lorenzo.
I'm the godfather of growth, and you are.
Nicki.
T, and we're here every day with a great new show for you.
We'll see you right back here again tomorrow, folks. Hey, do us a favor.
I don't know how you found the show,
but I'm betting you probably found it because somebody sent it to you,
somebody recommended it to you, somebody shared it with you.
Do yourself a favor. Do another entrepreneur a favor,
share the show with a friend, share it with another entrepreneur.
It's good karma for you,
and you may just change someone's business or change their life.
We'll see you back here again tomorrow, folks. Until then,
here's hoping you make a great living and live a great life. Take care.