Problems, not Solutions, Are Where the Money Is

So I gave a talk earlier this week on my book, “Principles of Applied Stupidity.”

One of the elements of the book that I’m starting to really expand and emphasize is the whole concept of “not solving problems.”  I’ve blogged about this before, see previous blog posts in the lower right hand column…

Anyway, after the presentation, one of the attendees came up to me and asked, “how do I approach the whole concept of charging for my services?  Isn’t the solution to a problem the thing that I offer to a customer that is of value?

This is a very vexing question that affects any independent business person who isn’t selling a commodity service at a set-by-others rate.Unfortunately, I couldn’t articulate a response to her at the time, but it really intrigued and inspired me to have to face this question, and here is my response, two days late:

Again, we tend to think of problems as bad things that need to be dispensed with and suppressed as quickly as possible.  (Did you ever take “timed tests”?)   This is not necessarily the best approach.  The whole concept of Principles of Applied Stupidity is to take what you were taught in school and turn it upside down.

So here is one story to use as an example: let’s suppose I wander into my local car dealer, and I tell them that my car is making a rattling noise in third gear.  Now obviously, from my perspective, I am looking for the cheapest solution possible.  Car dealers know this of course, and have developed a fabulous system for dealing with it.

For one thing, they never, ever, ever have a quick and simple answer for me.  Instead, they say, sign here, go get yourself some nice free coffee, read your book, we will get back to you.  An hour later, they will come to me and tell me, “we found the problem causing the rattle.  It’s this.  And while we had it on the lift we also found…” and at this point they will tell me about more problems that I have that I did not know I had. 

You’ll notice, that they never once talked about the extensive factory training and certification of the guy who’s going to fix my frammer-strammer (or whatever it is that’s broken).  They do talk about the dire consequences of what will happen if I don’t fix it.  The focus is on MY car and MY problems.  They don't talk about themselves or THEIR skills.

By saying nothing they IMPLY two things: 1) they are experts at this and they know what they’re doing, and 2) the price they’re charging is a fair market rate so there’s no point in even discussing it. 

I suppose some people will try and haggle, and I have successfully haggled with them in the past here and there, but for the most part, it’s not cost-effective to go shopping around.  The darn thing is up on the lift, let’s just get it done.

So, in transferring this to a general personal services consultancy negotiation, it’s easy in these situations to be very aware of the hard-won value of your own expertise/knowledge and how much money you want.  But what really is driving the sale price is your customer’s problem.  The bigger that problem is, the more money it is worth to have it fixed. 

Diagnosing problems is often a bigger part of your service than solving them.  It’s amazing how many people sit around waiting for their customer to diagnose the problem, and then get called up to come in and fix it.  Another point is that not only do people not always know how many problems they have, they may be very well aware of the problems they have but are ashamed of them, or they don’t think there’s anyone out there who can fix them, or they are afraid to find out just how expensive it would be to fix them.

I had a client once who paid me $300 for a TV production job.  I came in and did it, but at the same time I kept identifying needs that that customer was not conscious of until I pointed out potential fixes.  It took a couple of years, but that same job gradually became, instead of a $300 job, a $3000 job.  I was not hosing them, I simply showed them that they did not have $300 worth of problems, they had $3000 worth of problems, and by the way I had $3000 worth of solutions.  Believe it or not, they were thrilled, and they won’t hire anyone else to do this job for them, because I’m the only person they can find who cares about their problems.

So again, a lot of people offer solutions, but problems are where the money is.  Problems are wonderful.  Spend more time looking for problems, in analyzing problems, and talking about problems.  Solutions are the easy part.  The size of the problem determines the value of your work, not what you’re going to do to solve it.

©   Justin Locke