
From Pro bono to Premium (Part 1)
In my short journey as an entrepreneur, and from my experience working with other young entrepreneurs, I have found out that transitioning from selling your products for free or for a minimum price, to selling your products/service for a premium is not an easy task. This is very common with entrepreneurs whose product is basically services oriented; I mean your product is not a tangible item. The frustration from this kind of experience has made some quit in the process because they couldn’t find a way to make the transition. They were frustrated for being under-priced for too long and then feel undervalued.
Most in this category delve in entrepreneurship with a zeal to sell their idea or talent without proper guide or plan. At the start they are faced with challenges such as, inability to connect with potential clients/customer, zero network, inexperience with market segmentation, little or no customer validation knowledge, lack of identity, fear, competition from big names/brand, and an overwhelming pressure to succeed.
As the journey progresses, only a handful really get to make the transition successfully. Some are fortunate to stumble on good network that enable them make the transition in less time. Again, some have are opportune not to even experience this whole process as between start and success, things they was almost no barrier.
Who one will want to pay a premium to a faceless brand? Imagine Ayo Makun of AY LIVE puts a huge billboard of his next AY LIVE event at Eko Hotels, and all the faces of comedians lined up beside him are faceless comedians, names you can’t identify anywhere in the country or on social media, comedians with no story. Imagine Kate Henshaw preparing for her wedding, and her friends suggest Sikiratulamutejuola to be her preferred MUA for the day. You know Kate won’t oblige.
Think about this; you want to start a new company, or are alrady in business, and you want to make a logo, an image for your image, and you got recommended a chap who can’t show you his previous work, and you want to cash on his cheap price to do the job for you. It’s certainly a risk
I have seen talented graphic designer stay in the pro-bono zone for too long. I have come in contact with skilled and talented tailors who can make good dresses but are struggling to come out of the NGN1500 per dress zone. Well, I know someone is thinking “What? NGN1500 per dress is good business na.” It actually is. But compare that person’s brand to, names like Yomi Casual, Bolaji Sparks, Ouch, MaiAtafo, etc. Same business, different class. Now we’re on same page.
The truth is, navigating from pro-bono (or giving your services for less) to premium is a journey. Young entrepreneurs need to understand that in-between is a process, if followed with proper guidance can yield huge results. It is totally about mastering the business of your talent. You can’t become a master in one day. Sadly enough, the pressure to succeed, pressure from the desire to make an impact, the pressure from society all make the journey overwhelming.
Making the Switch
In order to make the switch, you need a self-assessment. You need to know where you are in the journey; you need to know if you are ready to charge a premium; you need to analyze your product or service to determine what it is worth. Answer the following questions; to stick with the graphics design example –
First, make a list of 5 top competitors you admire their market (and are your target)
· On a scale of 1 through 10, how good is your work in contrast to what your target customer would want to pay for?
· Do you have the tools that your competitors have? Make a list of those you have and those you don’t have.
· On a scale of 1 through 10, what quality of work can your tools produce?
· Are your friends willing or eager to refer your work? Please know that willing and eager are not the same. A person can be willing to refer your work not because they think it is good but because, their moral conscience as your friend cages them to. Again, a person may refer your work based on what the other person is willing to pay. In order words, they may refer you because you’re not top quality and your price is low. Choose which applies to you (be sincere).
· Since you started your journey, how can you classify your clientele? Group them into those who want your work for free, for little, and those who pay you good money. This will lead to the next point
· How much is premium? You must define what premium means to you. Remember, the journey to premium is a process. As you grow, so your network will. The goal is not about raising the price; it is about finding a way to launch yourself to the network of clients that can pay a premium for what you do.
· What is your cost analysis like? The problem with many service providers is that, they don’t know what it cost them to provide their service. How much does it cost you to produce a graphic artwork? I mean; time, data (to surf the internet for pictures/vectors), creativity, coffee, water, electricity, back-up power (generator). Another illustration, how much does it cost you to make a dress; let’s assume the client brought their fabric to you — time, sketch, design, creativity (your idea), electricity, back-up power, back-ache, medications, coffee,
In doing this self-assessment, be sincere about your current position. Be sincere about your work. You may want to bring an honest and trust-worthy friend to do it with you.
The self-assessment questions are part of The Product/Brand assessment tool that I use during our Launch Kit program for Startups and entrepreneurs. If you want this tool to assess your product, service or brand, kindly send an email to maxwell.ukueje@gmail.com
