The Prostitute Principle
Posted in online marketing on February 21st, 2010 by adminTags: marketing consulting, online marketing, prostitute principle, seo
The “Prostitute Principle” (not to be confused with the prostitute principal — har har har) is a phenomenon that many consultants are probably familiar with.
It refers to the difficulty of charging services after they have already been rendered.
Call girls, of course, have found a way to deal with this problem — and that is to always get paid up front.
Think about this for a minute: if you tell me that you desperately want to double the size of your business, and i tell you that I can help you — for a cost — as long as that cost is ‘reasonably’ less than they perceived benefit you receive by doubling your business you are probably interested.
Now, if the grand sum of my work is 15 minutes of tweaking your site, many people will begrudge the consultant his fair share of the proceeds.
Even funnier, is that almost no one will admit that they would feel this way. However, it’s part of human nature that they don’t see the 10 years of experience that gave someone the knowledge to know WHAT to tweak. They only see the 10 minutes of work and think: “gosh, someone else could have done that just as easily and charged a LOT less”. Nevermind, that 9 out of 10 professionals wouldn’t have known what to do and would have worked for months with less to show in results.
The mark of the true professional is someone who can cut through the clutter, simplify, and not be focused on trying to make simple concepts complicated. Unfortunately, these are also the same behaviours that will make you susceptible to the prostitute principle.
Oh, but wait, I know….all my readers are more evolved and would never do that, right?
Sound off. Leave a comment. It’s a follow link for your site after all.
I agree with you. It is the same with pieces of art. People always say ‘I could’ve done that’ but the thing is years of experience brought that artist to something simple.
right nicola…it’s the old story about picasso in a restaurant…. a woman asks him for a sketch on a napkin. he takes out a pen and hastily draws something for her and then say, ‘that will be 50 thousand dollars.’
she thinks she’s been taken, so she complains, ‘that only took you 5 minutes!’
at which point he says, ‘no, that has taken me 50 years.’
poignant message there.
r8r
nicepost.
thank you.
i agree me too
It’s the same with computer repair technicians. If I come visit your house and fix your computer, and it took me 10 minutes, and I charge you for the hour, since I had to come to your home, know your problem, fix it, and drive back home, it is seen as a rip off.
Or worse yet, sitting there waiting for a scan to run for 2 hours and really do only 1 hour of work.
that’s why I usually take their PC’s to my home and let em run a scan and then just charge em for the actual hours of work, usually only one hour though. Keeps complaints down and less drama.
Great post. Hindsight is 20/20. It’s like watching a comedian, of course anyone can say those words, but ti takes a true pro to contort words into something worthwhile and meaningful.
Nice post. I also agree with the above comment concerning computer issues, charges and customer dealings.
agree, it just take some time to get an expert in your subject and that should be honored!
thank you, really an article that has opened my eyes
You`re 100% right… Good post
I love your blog and how write you
Nice post. I also agree with the above comment concerning computer issues, charges and customer dealings.
Great post. Hindsight is 20/20. It’s like watching a comedian, of course anyone can say those words!
I agree with you in spirit, but not in the letter-only because I don’t have enough experience to honestly say yes 100% right. But all the logic seem sound.
” The mark of the true professional is someone who can cut through the clutter, simplify, and not be focused on trying to make simple concepts complicated. Unfortunately, these are also the same behaviours that will make you susceptible to the prostitute principle.” I completely agree with this statement because a true professional must be versatile and does a clever mind. This attitude will make perceive his level.
I’ve also seen this in previous careers where the time vs. amount charged seemingly becomes out of balance. In consulting, you need to set your fees up front as you suggest, and if possible, don’t let the customer watch over your shoulder. If they insist, then you can try to engage them in the process, explaining what you are doing. On the (thankfully) few times I’ve tried that, the customer seemed to feel that the extra education was worth the time.
It’s all about ROI (return on investment) I know other people know stuff I don’t and if it took you 15 mins to fix something so be it…it’s like cars in the United States people think BIG cars mean they’re worth more, no one buys a $50 hatch back people want a big SUV or p/u for that price like the bigger it is (or the longer it takes) the more value…
It’s all about ROI (return on investment) I know other people know stuff I don’t and if it took you 15 mins to fix something so be it…it’s like cars in the United States people think BIG cars mean they’re worth more, no one buys a $50,000 hatch back people want a big SUV or p/u for that price like the bigger it is (or the longer it takes) the more value…
Prostitute, my opinion is this you need to stop this kind of biz, first of all it can ruin, family, friends, and most of all your own life..
someone from garage sale cow thinks that i’m a prostitute and wanted to lecture me on the erosion of society i was contributing to…lol. read the post.
This is great! I had no idea that call-girl mathematics could be so useful in a business setting. I am eager to learn more. You’ve found yourself a loyal reader, for sure.
Thanks, Rake.
i am getting a little bit nervous though. with posts with the words, “bookie”, “prostitute” and “smoking crack” in the titles i’m starting to get some ‘interesting’ search traffic
That post reminds me that businessman are using different business techniques. Thanks for your post.
I always ask for an initial payment. I have learned the hard way and then I also realized that money asked out front puts you in an important position.
ohhh oooo!!!! i never knew that even prostitute have principle untill i read this post…
I hate clients like your example. They want to get the job done “perfectly” and fast but doesn’t want to pay you with the right amount. I have already experienced that. I am a graphic artist. A client went back to me for another project because he likes my work. When I told him the price it would cost him (which is very reasonable), he told me that his designer can do the job faster and cheaper. I did not agreed with what he wanted.
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Hi, this reminds me when I was working as an engineer and read about the story from MIT, which relates a true story about an excellent engineer who has retired from GE. When there was an issue which the company could not solve, he was called in and gave the instructions to fix the problem. GE then received a bill for US$10,000, and told the engineer to break down and explain the cost. He wrote “Chalk $1″… “Knowing where to mark the Chalk $9,999″. GE paid up.
Another approach that would also satisfy the customer would be to create a prototype. This way it gives the customer an idea of what they are paying for before thye have to pay. It is a good compromise.
It is a challenge to get paid after providing the value because then the client can decide to track the hours and “negotiate”. However, if you have a clear “unique process” as learned through Dan Sullivan at Strategic Coach (www.strategiccoach.com), then it really becomes easy to charge up front. Our prospects know that if they want to engage us, we invoice up front for each stage.
We’ve been doing this in our business for a long time. And it has solved a number of issues that would otherwise have been challenging for our growth.
We were even interviewed in the Globe & Mail – “How To Get Paid Like Michael Dell” by John Warrillow (http://www.theglobeandmail.com/report-on-business/your-business/exit/how-to-get-paid-like-michael-dell/article1429350/). Big companies do this as well – like the print-on-demand book publishers. You pay, they print and ship. Easy-peasy.
Nothing’s perfect, but by charging up front, the only obstacle is our own confidence about what to charge!
Nice post, I fact I work in this business for some time and still not know what this meant till I read this post. Very useful information and a good article.
Thanks for the valuable info here.