What Does Your Price Imply About Your Value?

When I first started my engineering consulting business I was hard pressed to land any clients. I had wrongly assumed that price primarily drives the marketplace and that by offering a lower than industry price I was offering more value. In truth, price plus Perceived Value drives your Market Value.

Let me explain.

I was 23 years old with no debt, no house, and nothing to tie me down. I believed that starting a Engineering Consulting business focused on manufacturing and profitability would be a good fit for me since I already had several years of successful project engineering under my belt. I also believed that by lowering my price per hour I would entice more clients to retain me. With a lower overhead rate, I believed I could undercut my competition. What I hadn’t counted on was perceived market value.

I quoted and estimated a dozen projects. I was rejected every time. At one point, a brokerage company that was outsourcing a large project contacted me. I was told I had the qualifications that they wanted, but my price was way off. I expected him to tell me I was too high, and was shocked to learn that because of my low price they believed I didn’t fully understand the scope of the project or that I would not be able to complete the project by running out of funds.

I rapidly explained my logic on the price and the project manager understood what I was trying to do. He then doubled my price and resubmitted my quote.

I was hired.

The first phase of the position required six time-study engineers to track two manufacturing lines 24 hours a day. The project was on the Lincoln Continental and Ford Focus engine frames. The company that ultimately contracted me was unable to produce enough quality engine frames to meet Ford Q1 status and was at risk of paying for Ford downtime. For every hour the Ford plant we supplied was down it cost this company in the neighborhood of $1 million dollars. Needless to say there was a lot of stress and attention on this project.

After four weeks of long hours and a massive Pareto analysis, I submitted a plan to accelerate the production speeds of the line.

My contract was up, but now I had intimate knowledge of the line (my real and perceived value had increased) and they wanted me to implement my plan. So we renegotiated my contract for another two months and I doubled my hourly rate which increased my perceived marketplace value.

After two months, we had already increased the line speeds, minimized any risk of downtime to Ford and had a steady plan to put this product line into profitability. Because of this work, I had three other manufacturing clients that wanted my services. My current client didn’t want me to go just yet, so they offered to double my hourly rate, yet again, if I would stay another month. By this time I am making more money in a day than what I would have in a week under the original contract.

I had to call my potential new clients and let them know I wasn’t going to be able to start their projects untill after the projected that was just extended had ended. To which all my new clients offered to increase my rate of pay to compete with this new hourly rate.

I went from a new start-up consultant, hoping to make $60K a year (decent for 1993) to averaging over $200K a year. All because of perceived value. Since others were willing to pay the increased rate and I was willing to turn work down because I had higher offers, a bidding war occurred. I had my pick of projects, made more money than I ever had, and had more contracts than I could handle for years.

Was I actually more valuable? Maybe (with my increased knowledge), but what I really learned though is Perceived Value and Real Value are two very different things.

So what does this have to do with dating?

Quite a bit it seems!

What does the poor “nice” guy do when he first wants to date a girl (and yes this included me till my 30′s)? He figures he will be very sweet; complimenting her looks, offering to take her anywhere or buy her something. This is the guy that tries to help her solve any problem she has. He places her on a pedestal (but not high enough to see up her dress). And what does she do? She rejects him, either by telling him she just wants to be friends, or by ignoring and avoiding him.

The problem isn’t just one of being nice, or needy, or even confident enough. The issues is his perceived value compared to her perceived value. All women want to be with a man they perceive as having higher value than themselves. This is one reason the guy usually makes more than the girl he is with does. But the dynamic is not one of just money, but the overall package of perceived value.

Think about the interactions this girl has had with other men. If she is attractive, she has been complimented to death. Guys have gone way overboard immediately offering to buy her things, to take her out, hell, to even take her on an exotic vacation. Believe me, I know – I have done it.

And if you are offering something perceived as high value then you may get the date. When I was 27 and making great money, I was able to land a very hot “Miss Hawaiian Tropics” calendar girl. She was a waitress at a local BBQ shop, and I would go in to see her a couple of times a week. We flirted a little, and I offered to take her on a cruise. Yes, you read that right… I offered to take her on a cruise for a first date.

And guess what happened? We went on a cruise where we slept in the same room. No, we didn’t have sex. She wanted the experience of the cruise, and she enjoyed the good time I provided, but the way I had presented myself combined with my “nice” attitude lowered my perceived value. I was slated in the “friends” category.

After two months of going on dates with her, I finally had it. On Friday night she said she wanted to come over after she got off work. I canceled my plans with the guys to be with her. She arrived at my house, proceeded to give me a short peck on the cheek then took a shower. After the shower she puts on one sexy dress and started on her makeup. I asked her, “Are we were going somewhere?” She informed me she was going to go hang out with a “friend”.

This same girl had dated a guy that cheated on her, wasn’t available all that often to be with her, had kept her at a distance and basically made her believe that his relative value to hers was higher.

And what did she do? Drop everything if he called. Break dates with me or friends to be with him. Chase him and pine for him. And she would have sex with him whenever he wanted.

So I started really thinking about the dynamics and the social interaction between us. As I have understood more, I realize there are ways to demonstrate high value without having to brag, or tell stories of some exotic adventure you may or may not have been on.

We know that women in general are going to pick the man with the highest value. Not the highest real value, but the one that makes her feel he has the highest value relative to what she believes her value truly is, and that is his perceived value. If she thinks you have high value, you will be treated as such.

But this is where the fallacy lies. Remember the real life consulting example, when I charged too little per hour compared to other bidders versus when I charged five times more than that? My Real Value was pretty much the same at either price. I got the job done, and increased the company’s ROI. As I racked up my fees though, I was viewed as having a much higher Perceived Value. This is the value you are judged against in most social situations.

I knew I needed to raise my perceived value in dating as well, but anything I started to say or discuss sounded like bragging. After a lot of thought I realized when I didn’t like the girl that much, I was more demanding of her. I also complied less with her, and instead compelled her to comply with me. Said another way, an easy way to demonstrate high value and therefore increase you perceived value is to ask girls to do things for you.

It is always situational, but if I was out I would have the girl buy me a drink. Or hand me a beer. Save my seat. Hold my jacket. Just little task that had them complying with my wishes. As I got better, my request became more outlandish and more fun. I had girls refer to me as “Master” or “Sir”. This is always fun and good for some role playing.

And every single time I started an interaction with a girl and had her comply with my easy little task, she became more attracted to me. Even telling a waitress to comply with something she would do anyway works. And the better looking she is, the more this works.

You have to realize that most men do not do this. And only the guys that perceive their value as being higher than hers would even dare. You are leading her by giving her task, and she perceives you to be of higher value since she only complies with men she likes.

As time as gone on, I have told women to wash my bike, truck, or boat. I have had them do my laundry or cook me dinner. I have asked them to post pictures to a website, or search for some information I needed. I have had them stop for something to drink before they came over. Anything little I could think of that would allow them the opportunity to comply with my wishes.

And as they comply, this allows you to compliment them in a way that also demonstrates high value. Rather than saying “You are so beautiful”, which is the typical nice guy opener, you can say, “Hey, watch my seat…” Then when you return, “Thank you so much for guarding my seat. You must be really ferocious”, with a slight wink.

Sometimes, if she doesn’t move out of my chair fast enough I will follow with, “You can move now”, then reward her by spending a little time with her.

Most people want to feel they have earned your time. Girls especially want to feel they had to work to get you. Put a high price on yourself. As others start to comply and feel your perceived value, then sit back and enjoy the women try to prove their value to you.

As originally seen on RetrunofKings.com What Does Your Price Imply About Your Value?