If you’re an entrepreneur, at some point that Tiffany paperclip will have found its way into your newsfeed.
For those who haven’t seen it yet this was the original post below:
(There’s actually a gold Tiffany paperclip too which is $1,500 that has done the rounds as well.)
Now I’m all for entrepreneurs charging what they’re worth and not being bullied or scared into lower prices than they should charge. It’s hard when starting your own business. And undervaluing your products and services hurts not just you but your whole industry.
But the Tiffany paperclip doesn’t illustrate that, at all.
This paperclip is the price it is for 2 reasons:
- Good branding
- The material it’s made from
These are the two contributing factors that cause it to be “worth” the amount it is and make people willing to pay that price.
Tiffany didn’t just start their company one day, get an ordinary paperclip and slap a $165-$1500 price tag on it.
They earned that price.
So before anyone looks at this “inspirational” Tiffany paperclip post and thinks “yeah fuck you arseholes, my prices aren’t too high” (the arseholes being your clients in this instance), for the sake of your business ask yourself honestly first; have you earned that higher price?
If your branding isn’t good, or the materials you use aren’t, chances are you haven’t earned such a lofty price tag…yet.
Why good branding lets you charge higher prices
A brand identity, in its simplest form, is the equivalent of someone’s personality.
When someone, who knows me, hears my name they have certain associations that will spring to mind as a result. Hearing my name has more information linked to it than just that it refers to me.
The same is true for businesses and the role of branding is to make sure those associations are good and what you want them to be. Even if you do no marketing, and have no idea what your brand identity is, those associations will exist if you have already launched your business.
That’s why I always stress to people how important it is to decide what you would like those associations to be right from the start so you can, at least, steer them in the desired direction.
A strong brand, that people have positive associations with, will lead to huge financial gains.
A few years ago the market value of Coca-Cola was almost $200 Billion but their physical tangible assets were actually only worth approximately $90 billion at that very same time. That’s a huge discrepancy between the actual assets they own and the company’s value.
That gap is the value the brand adds.
Pretty important when what you sell is sugar water.
Building a strong brand leads people to think your products or services are better even when they aren’t.
In fact, strong branding can literally change our perception of taste.
In 1983 Pepsi ran blind taste tests against Coke, and Pepsi came out the winner so they started running ads to showcase this:
Needless to say Coca-Cola, got their knickers in a bit of a twist about this and promptly freaked the fuck out before stopping to really think things through.
I imagine everyone at Coca-Cola HQ looked something like this at the time:
In their panic, they then created New Coke.
And of course, since this was to combat the advert from Pepsi, they made damn sure it tasted better than both original Coke and Pepsi.
And you know what happened when they launched?
People petitioned for the old Coke back.
The Coke that tasted worse than both the competitor and the new version; they wanted that Coke back.
What Coca-Cola forgot to factor in is that Pepsi and the new coke might have won in blind taste tests, but in non-blind taste tests the original coke won.
The Coca-Cola brand was so powerful that it literally changed how people tasted the product.
If you have a strong brand you don’t even necessarily need to have the strongest product.
That said, good products and services help, which brings me to:
Is the material you’re using good enough?
Over the years Coca-Cola built up a strong enough brand that actually being better than the competition, “using better material”, didn’t matter.
But when you’re first starting out “better material” matters a lot.
You can decide to position your brand as high quality or having great products and services but unless you actually deliver on that you won’t get that initial groundswell of people backing your company to survive.
I responded to one of the many posts about the Tiffany paperclip when it flooded my newsfeed; voicing my concerns about how suggesting people should raise their prices and are worth more based on this is misleading. One of the responses I then received in regard to the material of the paperclip was to say that we ourselves are gold and silver and therefore worth the prices we’re charging.
Whilst this is a lovely thought, it is worth taking stock to of whether that is actually, really true.
I run a marketing consultancy and as such sometimes look for new people to hire for jobs relating to this. Sometimes I post in relevant Facebook groups to look for new contractors. And I can tell you a lot of the responses I receive are a very long way away from gold and silver. Christ, even when I post on LinkedIn they’re a very long way from gold and silver.
Maybe the services of those posting would actually be of high quality, but I will never find out because their approaches aren’t.
Due to the democratisation of technology, it is easier than ever before to start a new business. But people aren’t treating the start of these businesses like actual businesses.
One of my areas of expertise is how to create great client relationships, so I accept that I probably have higher standards than most for this, but in so many business approaches the basics are glaringly lacking.
Someone posts that they’re looking for a person to do x then you see the comments start going:
“Oh pick me”
“Right up my street”
“Omg that would be perfect for me”
“Send me a DM I can help”
“Would love to do this”
I don’t know about you, but I wouldn’t hire any of those people.
They’re not showing me that their products or services are going to be made of anything even vaguely close to gold or silver. These responses lack all the fundamentals for when applying for a job or pitching for business.
The person who posted the job is potentially offering you something.
When someone offers you something, you’re the one who should put in most of the effort.
Just like how everyone thought it was unreasonable when a man trying to give away a free table the other week was then called selfish and told he was ruining Christmas for not delivering it 180 miles, also for free. This is no different.
The person posting to hire someone shouldn’t have to struggle just to find out what relevant experience you have and how you might be able to help them.
Sure they’re looking for someone to do something for them too, i.e. work for them, but I bet they’re a lot less bothered about whether it’s specifically you or someone else than you are about getting the role. You’re the one who wants something in that exchange.
The onus is on you to put in the effort.
Stating how you can help them and your relevant experience shouldn’t even be seen as effort either; that’s just a baseline anyone should include if they expect another person to consider them for a job.
The internet is filled with people telling others “You can do it” and to “Know your worth ????” but you also have to show that worth.
And if you really want to be able to charge higher prices; if you want to be perceived as silver or gold? Then you need to go over and above too.
You need to bother clicking on that person’s name or Googling them and finding out as much info as you can to tailor your response appropriately to them. Just as you would with a traditional covering letter and CV, the same applies to small businesses building themselves online.
No one is just going to magically recognise your intrinsic worth without you showing it to them and proving it. If there is any possible way to can find out more information or t0 do more, do it. That’s what makes you silver or gold.
I’m all for self-belief but just deciding your products or services are worth more without backing it up with strong branding, or good materials, is just delusion.
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