Pull my lever: Efficiency and Effectiveness

Fake Ninjas Make Real Ninjas Stabby

This month’s Word Carnival topic is Price vs Value and my post comes in two parts. First: the marketing 101 bit about how you figure out your value. Second: the “everybody talks about price vs value the same way, so let’s turn it on its head” discussion (where you, the smartest kid in class, and your Prof go smoke a bowl behind the campus Library and talk about the REAL WORLD, MAN!)

Marketing 101: Value vs Cost (aka: how not to screw yourself out of all the money you’re leaving on the table, or: you’re not a goddamn robot so why are you pricing yourself like one?)

Every business ninja is just so happy to tell you that you need to charge according to the value you bring to the table rather than the cost of your services provided (hourly rate + cost of goods sold), but very rarely will anyone tell you how to figure out that value. So here it is:

Turns out, value is really fucking simple to figure out. There are only two levers: Efficiency and Effectiveness.

Almost all formulas for figuring out your value (rather than your cost of services provided) is based on two bits:

Efficiency is being REALLY good at what you do, how quickly you can do it, and knowing the things an expert in your field knows. I’ll often call this leverage in other places around my blog. Experts are better than newbies because they bring leverage to the table. Leverage, as any monkey with a really long lever can tell you, makes making a difference more efficient.

Effectiveness is delivering REALLY powerful results. Say you have $1 to spend. You could go to Walmart and buy… what, maybe a candy bar or something? Or you could go to the Dollar Tree and get 10 pair of tube socks, give them to 10 different transients, and make 10 people pretty darn happy. Efficiency, in this scenario, is knowing that The Dollar Tree is a “better” spot to spend $1 than Walmart.

When you’re a professional, effectiveness is a measure of how much you improve someone’s quality of life by working with them. Check it:


Pardon the chicken scratch. QoL on the up-down axis is “Quality of Life” and time is represented on the left-right axis. The magnifying glass – that’s the point when you’re hired. The point you’re working with someone is called the “intervention” period. And the leap in your customer’s quality of life from having worked with you? Effectiveness.

So, how do you communicate effectiveness? Two ways.

#1: You need to clearly articulate, in a viscerally meaningful way to the customer, the change in the quality of life that your product or service provides.

Say you run a food blog encouraging folks to eat healthier. Efficiency probably means you put more veggies on plates, right? But if you think talking about veggies on plates is even remotely interesting to a customer, you need your head examined.

So what about effectiveness? Over the lifetime of someone eating healthier food, what’s the medical cost saved? What’s the difference in that lifetime healthcare price tag between the time before they knew your blog, and the time that they’ve been a loyal reader for a year? For a family of 4, that might be something incredible. That number becomes your “Why” – as in, why are we going to all this trouble to add a few more veggies to someone’s plate? Make it visceral.

What do I mean by visceral? I was in Weight Watchers back in 2005. The first or second week, they pass around a hard, heavy, yellow foam mass. It looks like a really fake unbaked loaf of bread. “This,” the instructor tells you, “is what 5 pounds of fat looks like. When you lose your first five pounds, this is what you’ll have taken off.”

That was something I could understand. 5 pounds wasn’t just a number on the scale anymore. It was a big ugly, heavy chunk of fat that I could hold in my hands. Visceral.

#2: You need to tell a tangible story which clearly articulates #1.

Pie-in-the-sky goals about veggies on plates and visceral mounds of fat are nothing without story and actionable examples. Everybody wants to write the Great American Novel, right? How many actually get there? Maybe half? How many actually get there who participate in writing groups? Probably a lot more, right? And how many actually get there who participate in NaNoWriMo? Probably a lot more, still.

Why do you suppose that is? Tangible stories. We can clearly see examples of folks doing good work right in front of us, so suddenly it’s also possible for us, too. When the “winners” of NaNoWriMo extoll their glories for all to see… we want that to be us. That ennui between where we are and where we want to be, that’s the quality of life gap.

You might have to obfuscate a little bit if you can’t reveal actual customer names – make up a back story, whatever. Blogging regularly about your successes and failures in the community will make your actions more poignant and meaningful to the community. Taking this one step further, giving potential customers a story they care about is an easy pathway to giving them an easy action item to complete to become a customer.

The foodbank in Fort Collins can turn $1 into 4 meals for a family of four. So I can pay for a family’s daily meals one dollar at a time. That’s a powerful give-and-take lever that also tells me what kind of good I’m doing by pulling the lever – and what kind of damage I’m doing by not.

Given two levers for value – which one will you pull?

Turns out, it’s not an either-or choice, but most professionals treat it like one.

It’s just a lot easier to articulate efficiency than effectiveness. After all, your customer probably can’t do what you do (or if they can, they can’t do it as efficiently). When you can do something in 5 minutes that takes a client 5 hours, that provides a pretty handy visceral example of how your client values spending their own time.

Clients have leverage in other areas, so it only makes sense to outsource to someone with more leverage in areas they lack. Even so, there will always be silly people out there: “my nephew knows Photoshop, so I know this only takes 5 minutes to do…”, “Why do I need a copywriter or editor? I con write just fine, their only going to waste time…” (it physically hurt to write that, btw). Even between experts there’s often disagreement on what effectiveness looks like.

My point is: you have to be able to work both levers in order to truly convey your value. Efficiency purchased with 15 hard-earned years of experience might wow a client the day they sign the contract, but without the “why” of effectiveness, a client could forget all about your experience the first time you have a disagreement.

Efficiency + Effectiveness = Value.

So there’s your Marketing 101 lesson for the day. Wanna take it a step further?

Burning it up Behind the campus Library 101: Why “value” is a totally bullshit social construct

Value can be totally faked. End to end, hook line and sinker. Innocent folks are schemed every day out of their hard-earned money because some huckster motherfucker has figured out how to game their value system.

We can learn the process to fake value, but because we’re not evil sonsabitches, we’re going to use our powers for good to teach our friends how to:

  1. never get played by a slimy salesperson again,
  2. never get roped into another “ohmygodwhyamIhere” prospect meeting again, and…
  3. never buy/download another “maybe this has my perfect answer” elearning/webinar/ebook/bootcamp/manifesto again

“Ninjas”, “gurus”, and “mavens” utilize shortcuts to simulate value which doesn’t really exist. The differences are subtle but important (and can be read about in more detail in Chip and Dan Heath’s fabulous book: Decisive – not an affiliate link, I just love their work).

First: Ninjas, Gurus, and Mavens almost always utilize what’s called a narrow frame decision framework. Binary, yes-no, black-or-white, should-I-or-shouldn’t-I decisions. Narrow frame decisions force you to abandon alternative solutions (because if you don’t know alternatives exist, you’ll be hard-pressed to think of them unless prompted). Moreover, if this is a problem you’ve been struggling with for a while, they know you’ve likely single-tracked the problem-solving process (considered only ONE solution at a time over a long haul, rather than a whole slew of solutions over a short period so you can narrow down options).

Second: Ninjas, Gurus, and Mavens almost always play towards confirmation bias – a cognitive bias which totally blows. Confirmation bias is your (and my) tendency to believe information which fits your beliefs. Believe in Santa Claus? You’re more likely to read, remember, and share articles which confirm the jolly elf’s existence than those which state otherwise.

Third: Ninjas, Gurus, and Mavens are masters are manipulating our emotions with “problem/solution” sets perfectly articulated toward our vulnerabilities while totally downplaying that it actually takes work to solve a problem and not just a purchase. How many pieces of dusty gym equipment do you have in your basement? Right.

Fourth: Ninjas, Gurus, and Mavens utilize the halo effect. They’ll attempt to find common ground with you or associate themselves with something you hold dear (your family, God, your sex life, whatever) and this connection short-circuits your brain’s logic centers into a false comparison between your problem and your like of the thing they’re associating themselves with (rather than their solution they’re offering).

Fifth: Ninjas, Gurus, and Mavens will almost always attempt to keep your options artificially limited by creating false scarcity. Exploding deals and other nonsense like that. The reason is – if you have to single-source your decision making, if you have to trust your own instinct, and if you have less time to mull, you’re more likely to accept the premise that the solution they’re offering matches the problem you have.

Sixth: Ninjas, Gurus, and Mavens know that stretch pricing is good because as a culture, Americans believe in “no pain, no gain”. The thing we’re being offered is set just higher of our comfortable range. The amount of time we’re being asked for, the amount of information prior to being paid, the amount of detail we have to give to the RFP… sound familiar?

So how do you fight ’em? How do you not get played? Not get roped into a bad pitch with a prospect? Not download yet another fucking webinar/ebook/whatever?

  1. No exploding offer is so urgent you can’t call a trusted mentor to check your thinking. If it’s that urgent, it’s likely a scam.
  2. Always pause to consider if you can solve the problem another way, tweak the variables, or solve a different problem to ease the pain of the current problem.
  3. Understand that you’re likely to agree with agreeable bullshit and have someone who is your polar opposite check your thinking.
  4. Understand that real solutions take effort, time, AND the right tools. The shortcut to success is hard work.
  5. Give yourself some space from the problem. Does the problem affect things you know and love, or just a small subset of your life instead? Did the solution-provider evoke something you revere? If so, you should take a breather before throwing down your wallet or donating time.
  6. Commit to a “hard offer”. You can only go so far before you have to charge. You can only pay so much before you have to ask your significant other. You can only give 5 minutes to a coffee meeting or phone call before you move on to your next business.

And if you are a marketer, what does this all mean? If you work hard enough at inventing value, you can convince your clients/prospects of damn near anything, but you probably shouldn’t. In fact, the onus is on YOU (and me, too, so don’t feel like Atlas over there) to educate the crap out of your competitors, friends, family, clients, and prospects on how to make better decisions regarding your area of expertise.

I talked last week about how I’d rather have a client view me as irreplaceable than interchangeable and the notion of valuing your own time enough to say no to “coffee meetings”. To that end, I’ve started tooling around with a new project I call “Pick Noses, Not Brains”. I want it to serve as a flag freelancers can fly to let the world know WHY they don’t accept “brain-drain coffee meetings” or “just a quick question” over email – and why rejecting those meetings is perfectly acceptable.

Here’s our first shot at a badge, what do you think?:

Pick Noses Not Brains

Did I miss anything about value? Let me know in the comments!

Note: This post is part of the monthly Word Carnival. Every month, a whole slew of experts in their respective fields get together and blog around a common theme (cool, right!?) This month’s topic: Price vs Value. Click the link to check out the rest!