I saw a LinkedIn post recently from someone I respect in the US who shared how much money they had earned in the last year. It was quite a foreign concept to me, and to most people in NZ I suspect. Now, I didn’t have any feelings to this either way, but what I did find interesting was how in the comments, everyone (US based) was congratulating this individual. Imagine someone in NZ posting, or I could say boasting, about how much money they had made? I would have thought they would be about as popular as an All-Black coach losing a test series on home turf.
When I was last in the US it was amazing how everyone was chasing the $ and you could feel it everywhere you went. They seem to have a more open relationship with money, and I can’t help wondering whether we have it right or wrong with our relationship to money in New Zealand.
Arriving in the UK in the mid-90s, was the first time I noticed that money was a thing to be sought after. I had come from living as a student and money was never something we bragged about. Typically, we could always scrape up enough for a night out, but that was about it, and it didn’t matter. Fast forward to living in London and there was always talk about how much money people were earning per hour, and for the first time in my mid-twenties I wanted to earn more. Maybe I was a late bloomer, but I definitely wasn’t alone.
Why is this an important subject now?
There are two major reasons for those of us in business. Most companies are having to raise their prices in response to inflationary pressures on the supply side of things. And there are some significant upward pressures on salary expectations. Economists are telling us that for employees to at least be on a parr with where they were a year ago, they need to have at least a 5 – 10% increase in salary.
I notice that raising prices is something that many in business feel uncomfortable about. I recall labouring over a couple of price increases myself in the past, only to find that my clients were not at all concerned. It is natural to feel some nervousness, but it is something we need to get over. Typically, customers will be understanding where we are delivering tangible value, and we take the time to communicate the reasons for increase.
One of my favourite business books I have read recently is by Andrew Griffith (he is joining us on our next ‘Expert Series’ on 07 Sep 2022) called “Someone has to be the most expensive why not make it you.” Andrew highlights an interesting point. He says that he sets his prices so that at least 50% of his opportunities do not go ahead. I had a similar discussion with an adviser to us a couple of years ago, after telling him we had closed 100% of the opportunities that had come to us in the last few months. I was expecting a pat on the back and a congratulations, and instead I got a “well clearly you are too cheap!”.
One of the most common reasons salespeople give for missing the deal, is that their prices were too high. Price can be a factor, but more often than not, it is because we failed to demonstrate the value in our offer. Buying decisions are usually made first at an emotional level, and are not based solely on logic, and price is first and foremost - a logical factor.
When we look to staff, it is important for them and their managers to understand what they value. People are often quick to think that money is the number one reason people take up a role, when more often than not, remuneration does not even make the top 3. I have seen it many times, when people have moved jobs solely for money, and then regret the decision. If we do find ourselves in an economic slowdown or even a recession, and companies have to consider downsizing, then it is often employees who are overpaid who are likely to go first. The reason I say this, is in warning to anyone considering money as their number one motivator to move. I have taken two opportunities in my career, where I have considerably reduced my earnings in the short to medium term, but both of those opportunities have turned out to be the best career decisions I have ever made.
I have also chosen to work with companies and suppliers that seemed on paper to be the most expensive, but turned out to be the right decision. We have all had the experience of going with the cheapest price, which then ended up costing us more in the long run. As the saying goes, “If you think it’s too expensive to hire a professional … wait until you hire an amateur.”
My closing points are that perhaps as a country we need to show more maturity about money, to understand it more deeply, to not be embarrassed about it, and to recognise that if we are delivering great value, not being cheapest is a good thing. Salespeople need to realise that often money is a just a ‘hygiene factor’. I would also like to say, in my opinion, never join a business just for the money, and that should be the same for choosing to work with a company as a supplier.
