Jordan Belfort (played by Leonardo diCaprio), at one of his sales training conferences, looks an audience member right in the eye, hands him a pen, and says:
“Sell me this pen.”
And the rambling begins.
“Well, it’s a good pen, it’s a ballpoint…”
Each audience member he hands the pen to mutters a similar response. One after the other failing to realize the basic technique that drove Mr. Belfort to earn hundreds of millions of dollars selling worthless stocks to the rich wanting to be richer.
The screen goes dark. Credits roll.
So what does Martin Scorsese and this lunatic, drug-addicted stockbroker have to do with learning to sell websites?
“I need a new website.”
“Great! I can do that for you. I can make it responsive. I can build it on WordPress. I can host it for dirt cheap!”
And so the commoditization game goes. Our industry reeling from clients that supposedly have no budgets, no time, and no patience.
The other day I was presenting to a WordPress Meetup group in Boulder, Colorado. My third slide asked the audience how much their average project went for:
“How many people here, on average, sell websites for less than $5,000?”
Just about all of the hands in the room went up.
“And how many sell for more than $5,000 per project?”
A single hand in the front of the room went up.
While this one example is anecdotal at best, from helping web professionals build successful businesses every day at uGurus, I know that there is a systemic problem in our industry. Web pros aren’t getting paid enough. Across the board.
Because we are all looking at the pen.
Earlier in The Wolf of Wall Street, before the closing scene referenced above, Jordan Belfort is sitting in a diner with his pack of pre-millionaire, degenerate friends, and he does the same exercise:
“Sell me this pen.”
Instead of staring at the pen, his friend Brad takes the pen, looks Jordan in the eye, and says:
“Can you write down your name for me?”
“I don’t have a pen…”
Let’s pull this analogy full circle:
“I need a website.”
“Are you getting enough customers?”
“Well, not really…but what does that have to do with my website?”
When people fail to identify a clear problem, then they just sell a pen for what a pen is: a ball-point writing utensil. Pens are a commodity. If you fail to identify a problem worth solving with your customer, then you too are selling a commodity.
While websites are not as cheap as a pen, you certainly won’t break the $5,000 barrier per project if you fall into the commodity trap.
The commodity trap is when you sell a solution without a problem.
When there is a clear problem worth solving, pricing is only limited by the cost of the problem (not the price of the commodity).
In 1965, NASA had a problem. If you took a regular ballpoint pen into space, the ink would ooze out when under pressure and zero gravity. I’m no physicist, but the obvious solution was to use pencils. There is even an urban legend making fun of ‘Merica that our government spent a heap of money trying to develop a space pen while The Soviets simply used pencils.
When I was in high school, some anti-America guy spoke in one of my history classes touting this urban legend as fact. If I would have known what I know now, I would have made him look like an idiot. (Unfortunately Google didn’t exist back then).
You see, there is a problem with pencils. First, they are flammable because they are made out of wood. Second, when you write, little pieces of graphite flake off, and in zero gravity that means they float off and get stuck in important panels and buttons.
These issues, while not a big deal on earth, can be the difference between life and death in space. And death in space sucks.
Opposed to what the popular urban legend portrays, it wasn’t our government that spent a million dollars developing the Space Pen, but a man named Paul C. Fisher.
Paul saw a problem worth solving.
It took him a while and a bunch of money, but eventually he was able to invent a pen that could effectively write in space in zero gravity, under pressure, and at extreme temperatures.
He sold his first four hundred to NASA in 1965 for $2.95 each.
Wow. Big win, right? A whole $2.95!!!
But in 1965, the average Bic ballpoint pen probably cost five cents. So, in all fairness, he was selling pens in volume at 5,900% higher than the market cost of a ballpoint pen.
Selling gold on the open market is the commodity trap. People are only willing to pay for the weight of pure gold you have. If the market swings down, I will only pay what the market will bear for your gold. Doesn’t matter how shiny it is. Doesn’t matter what shape it’s in. Doesn’t matter if it’s from India, Brazil, or the Rocky Mountains of Colorado.
It’s a commodity. And commodities go for commodity prices.
But slap some gold with a bunch of silicon (sand) and plastic, and punch out a microchip, and you are no longer selling a commodity, but a high value good that solves a real problem.
You can find about $2 worth of gold in old iPhones…but iPhones cost upwards of $600.
Okay, okay. No more analogies, lets get to the goods.
Solutions that solve problems can be as valuable as the cost of the problem they are solving (or the possible gains to be made).
When a customer calls and says, “I need a website,” don’t answer with, “sure, I can build a website that will cost X.”
If you do, you will be knee deep in the commodity trap, and it will be too late.
And definitely don’t draft up a scope of work and say:
“Yes! I can build a website! I will make your website responsive! And it will be on WordPress! And WordPress is FREE! And it will have a contact form! And then it will have an animation on the homepage! Yipee, animations on homepages! But just wait! We’ll also SEO your SEM until your social goes viral!!!”
I really hope you never sound like that when selling.
But if you can take my exaggerated scene of selling a scope of work for what it is: looking at the pen and selling the features you see right in front of you, then you will realize a fault in your ways.
Instead, respond with:
“I don’t think you need a website. I think you need more customers (donors, volunteers, partners, patrons, activists). How do you get customers today?”
And with that, you will be on your way to discovering the true pain your client is experiencing.
Once you find a problem worth solving, and you can build a website to solve that problem, the limit of your price is the limit of what that problem is worth to your client and not the cost of websites on the open market.
Jordan Belfort sold worthless stocks by inviting his customers to value them based on the opportunity they created, not how much the paper cost to print them on.
Unlike the Wolf, you are actually selling something that has value. Websites and Online Businesses can solve immensely painful problems and create massive business opportunity.
So go forth, sell The Wolf of Wall Street Way.
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