Nela Kačmarčik-Maduna
Feminine Economic Literacy

The Value Vortex: Secrets to Communicating Worth of the “intangibles”

Table of Contents

Introduction

Feminine economic literacy is a topic deeply rooted in my formal education. I have the privilege of knowledge and feel a duty and responsibility to help others understand economics as part of their daily lives.

The feminine touch eliminates my resistance to warrior-like technical jargon. I firmly believe that money should serve people instead of frightening us.

I reject the emotional connection between someone’s self-worth and the monetary expression of money because I believe that human value exists independently of how much we earn.

I also write about detaching time from money and about why monetary measures are challenging for some investments. Although their returns can be expressed in money, certain investments are non-monetary by definition. Similarly, some investments involve monetary commitments, although the effects are much greater than what can be quantified in terms of money.

The common thread in these topics is my life philosophy: I seek solutions rather than worry about problems.

Everything I write takes into account the modern insights of behavioral economics because this discipline best bridges my formal economic education with years of experience in communication.

Let’s just not talk about money!

When I heard Kristina say that “people would rather talk about sex than about money,” the scale of this issue became clear to me.

I’ve seen a growing unease about bringing up money topics after hearing that statement.

Statements like “Oh, we’ll figure out the payment!” or “They just want to make money” now make more sense to me.

Of course, there is a logical explanation for this discomfort. There is a strong mutual connection between self-esteem and earnings. Research and practice prove that the level of earnings is conditioned by a sense of self-worth, but also that a lack of money diminishes self-esteem.

“When I can’t afford to provide my child with a quality meal or nice clothes for school, the discomfort in me grows. Of course, I want to talk about it less and less,” a friend told me the other day.

There are many like her, I’m afraid.

On the other hand, women’s economic literacy and financial independence influence their participation in society, fairness, and gender equality.

In 2022, I joined a community of female entrepreneurs from around the world gathered around the EU project “The Break”. All of us are dedicated to socially responsible business and sustainable development. We want to contribute to society, humanity, and the environment, and have a great level of awareness that the economy cannot be sustainable if entrepreneurs are motivated solely by profit.

I used a poll to find out how they felt about money. I asked them how comfortable they are talking about money in public, with their partners, or with their friends. The results were kind of exactly as expected: maybe they can talk openly about money in a small group of people they trust. Most people don’t like the idea of talking about money in public.

“I’d rather pay others than myself.”

“I just can’t seem to learn everything I need to know about taxes to better manage my business finances.”

“I’m still learning; I know I can manage money better, earn more, and achieve more.”

“I’m not fond of finances, and I’m always surprised by something.”

“Too much importance is attributed to money, yet it’s not talked about much.”

“I’m sure that gender wage inequality could be solved with more knowledge about economics, money, and investments.”

All these statements are so familiar to me, as if I’ve heard them hundreds of times, no matter what environment I’m in – regardless of age, education, or other characteristics of identity.

We constantly balance between “You only live once” and “We need to save money for rainy days”.

Most of us have cookbooks that are stained with cake mix leftovers from family members who have passed down secret recipes for perfect cakes. To this day, I haven’t heard of a single woman giving her daughter or niece a financial planner or investment recipes.

That could be one reason why women make less money. It’s possible that younger people will learn how to use cryptocurrencies, NFT smart contracts, or cash flows better than we did.

In the end, maybe it’s time to think about the proverbs again?

Time has long been (and should not be!) the same as money.

For a long time, knowledge has helped women make more money, use the things they make more than once, and be in places they aren’t physically present. This unfairness of unequal pay will only go away when guys like these become bigger influences than women who can only make money off of their appearances or beauty.

Everyone is better off when women make more money, but men are especially better off because they don’t have to be both saviors and providers .

On the other hand, female insights gives us a fresh look at things, and when we have more money, that fresh look has a bigger effect on more people and gives us more freedom to choose how to spend our time, how to look, and what choices to make.

Lastly, what can each of us do?

  1. First, keep your time and money separate. Sell results and effects, not your physical presence.
  2. Second, think of money as a way to get what you want. Third, show respect for other women by paying the full price.
  3. Finally, be careful about what is free, because “free” often hides the most expensive thing: our time.

What Shapes Your Perception of Intangible Worth?

Effective value Communication means being able to tell others about your values, beliefs, and the unique things that make you or your business special. This is why it’s important:

  • Being able to clearly state your values and beliefs helps other people trust and believe in you.
  • Good communication makes sure that everyone knows what the goals and standards are.
  • When you talk about your values, you naturally attract relationships and opportunities that are in line with those values.
  • People are inspired and motivated to act when they can communicate clearly.
  • When you’re in business, communicating your values consistently helps build your image and brand.
  • People will follow your values more easily if you explain them clearly. This will help you have better relationships with others and do better at work.

Why Conveying the Worth of Intangible Values

Things that can’t be seen or touched, like a company’s image, its ideas, its employees, and its relationships with customers, are very important to the success and competitiveness of people and businesses today. The importance of communicating the worth of these invisible values lies in being able to spot, boost, and make the most of non-physical assets that help you reach your personal and professional goals. Why is that so important for women to know about money?

Better recognition and understanding: Putting a price on intangible values makes sure that these often-invisible assets are seen and valued (read: included in the price!). It shows us how important they are, so we can care for and guard them.

Competitive Advantage: Being able to explain the importance of intangible values can give you a big edge over your competitors. For example, a strong brand image can help you charge higher prices, and strong intellectual property can make it hard for your competitors to enter the market.

Trust and confidence among stakeholders: Stakeholders, such as customers, workers, investors, and business partners, trust and believe in you more when you communicate clearly about intangible values. People are more likely to back and work with you if they know how valuable your intangible assets are, such as your dedication to new ideas or your focus on the customer.

Strategic Decision-Making: Making strategic decisions depends on getting across the importance of ideas that can’t be seen or touched. People in charge are more likely to protect and improve their brand’s image if they know how important it is. Recognizing the value of a skilled workforce also pushes companies to invest in their employees’ health and growth.

Risk management: Being able to communicate the worth of intangible assets helps you spot and reduce possible threats to those assets, like keeping intellectual property safe from theft or lowering the risk of damage to your image through good crisis communication.

Long-Term Sustainability: You can make decisions that help your offer last longer and be more reliable in a business world that changes quickly by explaining how important these assets are.

Basically, explaining the worth of intangible values is a responsible move that helps people understand, trust, and get the most out of these assets. It keeps intangibles from being ignored or discounted, and it sets people and businesses up for success in an economy that is based on intangibles.

The Concept of the Value Vortex

The Value Vortex is a dynamic and interconnected system that illustrates how various intangible assets and factors interact to create and amplify value within an organization or broader ecosystem. This idea takes into account the fact that intangible assets don’t exist in a vacuum; instead, they work together to create a constant flow of value. The idea of the Value Vortex is important for understanding how complicated intangible assets are and how they affect business and personal success:

Synergy and Amplification: The Value Vortex illustrates how intangible assets, like brand reputation, human capital, and innovation, interact and amplify one another. For example, a strong brand reputation can attract top talent, which, in turn, drives innovation and further enhances the brand’s value.

Ecosystem Building: The concept extends beyond individual organizations and encompasses the broader ecosystem in which they operate. Collaborative networks and partnerships can amplify intangible values, creating a virtuous cycle of value creation. Such collaborations leverage each other’s strengths, expanding the reach and impact of their combined intangible assets.

Adaptability and Resilience: The Value Vortex is not static; it is constantly evolving and responding to changes in the business environment. Organizations that understand and harness the power of the Value Vortex can build sustainable competitive advantages and adapt to emerging opportunities and challenges.

Interconnectedness of Intangible Assets: The concept emphasizes the interconnectedness of intangible assets, demonstrating how intellectual property, brand reputation, human capital, customer relationships, and more work together. By recognizing this interconnectedness, individuals and organizations can optimize their intangible assets to achieve personal and business success.

Long-Term Value Creation: The Value Vortex reinforces the idea that intangible assets are essential for long-term value creation. By nurturing and integrating these intangibles into their strategies, individuals and organizations can establish a robust foundation for sustained success.

Time is not money!

Mathematically, the relationship between these two ideas is represented by a complex function formula rather than an equal sign. There should be at least three subdivisions in my description. The first pertains to the fact that we can buy additional time with money and that this exchange is also at risk of theft. The second heading discusses the concept of time value of money, and the third indicates a complex, yet unobtrusive, system for turning time into additional cash.

Money can buy us time

In reality, time is one of the values that is easily sellable, meaning it’s a ‘product’ we willingly buy. Of course, time is not sold under that name, nor is buying a watch considered buying time. We buy time as an intangible part of some other product or service.

I have gladly purchased online educational programs, even though almost all knowledge is available for free. By buying these programs, I was buying time for myself because I was getting a shortcut instead of spending months reading dozens of books and watching hundreds of videos. I saved time on acquiring new information and later processing it by purchasing and following a structured program that selected the most important, useful information and connected it with specific instructions on how to use it.

The lesson from this specific example helped me become aware of the relationship between time scarcity and the profusion of freely or inexpensively available knowledge. One aspect of time shortage is the realization that there are several time-wasting distractions to be on the lookout for. A few examples include those who try to fix their own faults and doubts by snatching your time, unnecessary meetings, other people’s priorities, attention grabbers, and so on. To be effective in either prevention or response, I feel constant study is necessary…

Time value of money

As an economist, this was one of my favorite lessons. The formula was easy to remember, and its effectiveness and practicality fascinated me. I practically understood the seriousness of this concept in real life, as I spent most of my working life on one-year contracts. It was impossible for me to get a mortgage to buy an apartment, so I listened with boredom to discussions about ‘how much money you return compared to the amount of the loan you take.’ In other words, the price of the time value of money was unattainable for me. If I had the opportunity to pay for it back then, I would have gladly agreed, as would millions of others. Tomorrow’s money was uncertain or non-existent for me, so even today’s promise of it made no sense to me. On the other hand, money that someone possessed in the present had the potential to become much more valuable in the future, following that fascinating formula from the beginning.

How to convert your time into more money?

The third subheading leads to many additional contents. The era in which we are fortunate to live allows for the multiplication of both money and time by using digital technologies. In addition to speculating on the values of cryptocurrencies and NFTs, the benefits of the online space enable almost perfectly targeted marketing, as well as passive income through the use of knowledge and information converted into digital products – from books and educational programs to webinars and group services that save time and other resources. In short, we can multiply or sell our time at a higher price if we know how. If we are able to offer our knowledge and skills to ideal clients at the right time and in the right way, the time we invested in preparation and publication returns multiple-fold. Of course, it sounds much simpler in description than in implementation, but such instructions and programs that facilitate and expedite implementation are available in exchange for money.

Whether time or money is more valuable is a question with a seemingly infinite number of ‘most correct’ answers, much like the chicken-or-egg conundrum. As far as I’m concerned, knowledge is power, and it holds the key to the vaults of both time and money.

Why does time poverty affect women more?

Global studies confirming that women perform a disproportionate share of unpaid work, especially domestic chores, are not scarce. This includes caring for children, the elderly, and the sick, as well as household tasks related to food preparation and household shopping. As a result, women find it difficult to change their circumstances and professions because they often lack the time to participate in decision-making in the community, acquire knowledge about adaptation or investment strategies for life changes. They also have less time for (better) paying jobs, which directly affects their income and leads to missed opportunities.

One study from the World Bank archives introduced the interpretation of ‘time poverty’ as a state of prolonged work and the absence of alternative options, again concluding that this phenomenon affects women much more.

A person experiences time poverty when they are obliged to work overtime, typically resulting in a lack of financial resources. If this person were to reduce their working hours below the baseline, they would be forced into poverty.

Thus, the shortage of leisure time is due to a confluence of these factors. First, there’s less time for fun and relaxation because all hours spent working count (whether at a job or doing things around the house like cooking, collecting water, and gathering firewood). Second, if a person’s household is already poor, reducing their working hours will have an impact on their standard of living, and if their household is initially not poor, reducing their working hours will likely cause them to fall into financial poverty due to a loss of income or reduced spending.

How to better allocate your time?

The first book I recommend is “Happier Hour” by Cassie Holmes, which presents insights based on real experiences, along with simple yet powerful tools that will guide readers towards a more fulfilling life.

The book helps you design your schedule with purpose, removing randomness and unproductive moments along the way, which is especially crucial in today’s world, which can be noisy and distracting at times. The author believes that the book offers a story that allows for developing harmony between goals and one’s own lifestyle, so producing a narrative that will remain in people’s minds for many years to come.

How to say NO and set boundaries?

In her popular book titled “The Power of Saying No” researcher and professor Vanessa Patrick investigates a ground-breaking new approach to the field of research known as the science of refusal. She makes a public presentation of the idea that is known as “empowered refusal,” which is a novel framework that makes it possible for refusal to become a tool for managing one’s own life. The shocking truths about the power that lies behind the word “no” are exposed throughout this book.

Protecting your time and putting your attention where it has to be are of the utmost significance in the modern world. When it comes to reaching goals in one’s personal life as well as one’s career, having the ability to say “no” becomes an essential skill. The idea of empowered refusal offers a one-of-a-kind and optimistic method to effectively managing one’s energy and aspirations. Taking this strategy paves the way for significant and favorable life improvements.

This enlightening book assists readers in avoiding disagreements, establishing boundaries, enhancing communication, and having difficult conversations. I believe that these are the components that make up stronger control over one’s own life that a young person (particularly a woman) can accomplish early on in their career.

Empowering women with financial knowledge to communicate value effectively

(translation from my linkedin post)

How can they value you more if you don’t value your time yourself?

It truly infuriates me when I hear that time is money.

In my opinion, time is more valuable than money.

If you ask me, time poverty is more challenging than material scarcity.

If you ask me, the biggest risk for an educated young woman to experience time poverty lies in her inability to say NO.

Unfortunately, there are numerous demands that come your way, which you think you MUST fulfill – for friends, family, love, reputation… but with the objective question of whether it’s truly something that NO ONE else can do or that NO ONE else will do, you become more aware and responsible towards yourself.

Ultimately, when you narrow down the few decisions that depend on you and that no one else can do, assess whether they are worth your effort and time. Your biggest enemy will be vanity, but an objective mentor can help with that.

How Value Vortex Affects Feminine Economic Literacy

There are sayings that “a woman holds the three pillars of the house”,but in reality, the fourth pillar, which is said to be held by a man, is actually the economy and funds.

It’s easy to confirm that there are more men than women in formal government positions in finance and economics around the world. It’s harder to figure out why this is happening, but social norms and views are likely to play a role. Many people can’t understand how the economy keeps going, but they can’t avoid it either.

At first glance, even a quick look at public stories or media content makes it clear that women are not supposed to know much about money, economics, or finances. They only need to spend, save, or reluctantly talk about money.

When people talk about rights, empowerment, and female equality, among other things, the economy is the last thing that comes up.

We allow comments about balancing different duties, ethics, and sensitivity when we talk about “business” women, but we tend to focus more on the fashion and social aspects of these comments. Sadly, when people talk about protecting women’s rights, they still mostly talk about protecting their basic rights and keeping them safe from abuse.

Trying to change society norms is hard, especially when no one wants or needs the change to happen.

This article doesn’t try very hard; it just provides a short list of reasons why women should be financially literate.

To rephrase, increased female earnings benefit men, children, nations, and businesses equally.

The first tale is about a young, gorgeous, intelligent woman named Sanja.

Sanja was obligated to have children, earn a doctorate, and put up with men’s sexist comments. She was financially secure enough to turn down sketchy business deals and ignore unsolicited advances. She was under no obligation to accept the demeaning nickname her male coworkers gave her.

She made enough money so that she wouldn’t have to risk her health by working excessive hours. She could learn at her own pace and contribute in the manner that most interested her. Working with her was a pleasure because everything she did was excellent and genuine. With her salary, she was able to hire reliable help at both home and work.She had enough cash to spend, which helped other people (both men and women) make more money.

Her husband was pleased with the increase in the family’s financial stability. Sanja’s son was content because he hadn’t been taught that he had to provide financially for his future family. Sanja’s kid grew up with a strong sense of pride and a positive role model; she valued education and actively sought out new experiences. Sanja was able to support herself since she refused extortion or low-paying gigs. She worked with a clientele who appreciated her contributions. Her efforts were fruitful, so she was able to confidently demand the appropriate payment.

In the second tale, there was a woman named Mina who was usually neatly dressed and friendly.

Mina was an amazing pastry cook, particularly for cakes, and worked as an assistant in an accounting firm. When she lost her job and didn’t feel like starting her own accounting firm out of her wealth of expertise, she chose to turn her passion into a way to make money.

She took both free and paid classes to learn how to market her products and services online. Friends and delighted clients gave her glowing recommendations, and she quickly started earning a respectable income. She was in a position to spend money on high-quality ingredients while still making a profit. She was now in a position to hire top-tier associates and increase her product line. She made enough money to fund more advertising campaigns and attract new customers. Customers who insisted on finding the cheapest option were easy for her to reject.

She could help women who wished to make money from their passions for free. Mina made enough money to afford to be well-dressed and nice at all times.

In the third tale, there was once an adorable young woman named Ana who had widespread acclaim.

Ana, a seasoned media and social media analyst and influencer, was a regular fixture. She willingly gave interviews to the press, went on television, and offered her thoughts on the news.

They also knew that Ana was the kind to “swipe” her credit card frequently and jet off to far-flung locales. She gladly accepted any and all offers for sponsorship, from the smallest to the largest brands.

She responded, “It’s not all about money,” but she knew that she would always have a guy at her side to pay the expenses.

This remained the case throughout her life, despite the fact that she had a hard time maintaining partnerships. For one, there was the absentee father of her daughter. Another had charisma and resourcefulness, but ended up behind bars. She narrowly escaped the third one, who was abusive. The fourth one was ideal, but he ended up falling for someone else.

Credit card interest was so unrelenting that even with regular payments, Ana was unable to turn away business. Ana had no idea how to charge more since she was afraid no one would hire her.

She was financially illiterate and uninterested in economics. Worse, because of her fame, many thought she was wealthy and therefore expected her to be a big spender.

There are many small stories about women we know in all three stories.

These days, we can get information with just a few clicks, and we can learn some things from messages we send to our “younger selves.”

It will take more time to change social norms, but every trip starts with the first step.

This step can be feminine, elegant, and strong, in my opinion.

Can a Positive Money Mindset Improve Your Financial Health?

Cultivating a positive money mindset is like tending to a garden of financial possibilities in your life.

It’s all about nurturing your beliefs and feelings about money to help you grow and maintain a healthy relationship with your finances. This goes beyond just making money; it means recognizing that money is a tool to achieve your goals, support your loved ones, and make a positive impact in the world.

To develop a positive money mindset, it’s crucial to challenge any negative beliefs that might be holding you back. That means spotting and changing thoughts like “money is always tight” or “I don’t deserve financial success.” Instead, try affirmations like “abundance comes my way easily” and “I’m worthy of financial prosperity.” This shift in your thinking can empower you to approach money matters with more confidence and clarity.

Another key aspect is understanding your self-worth and what you bring to the table. When you know your value and acknowledge your unique skills and experiences, you can be more assertive and proactive in your financial decisions. This self-confidence helps you negotiate better, get fair compensation for your work, and take control of your financial future.

Having a positive money mindset can greatly impact how you communicate your worth, whether it’s in personal or professional settings. With a healthy money mindset, you’ll be better at explaining the value you bring to a project, a team, or a partnership. This clarity in communication will enable you to stand up for fair pay, negotiate effectively, and create win-win situations.

Moreover, it empowers you to set boundaries and make informed financial choices. You won’t be afraid to turn down opportunities that don’t align with your values or financial goals. This sense of self-respect and financial integrity leads to more fulfilling and sustainable financial decisions.

When it comes to identifying and dealing with common money mindset challenges, you must first acknowledge the deep-rooted beliefs that may be holding you back. A common example is the widespread prevalence of scarcity beliefs, which can have their roots in formative experiences with money. It’s crucial to realize that the world is ripe with possibilities, resources, and money, and that you are entitled to your fair part.

You should also get over whatever apprehension you have about discussing money. The topic of money is typically avoided because of the discomfort it might cause. By facing and overcoming these obstacles, you’ll be able to develop transparent and fruitful monetary relationships where you and others can talk freely and honestly about money.

In the end, creating a positive money mentality and tackling mindset difficulties go hand in hand. It’s about giving yourself the tools you need to confidently articulate your worth, make smart financial decisions, and lay the groundwork for lasting success. This isn’t a quest for financial gain alone; rather, it’s an opportunity to develop a healthy, self-affirming relationship with money that will improve all aspects of your life.

I am regularly listening to Brainy Business by Melina Palmer, specifically two episodes related to our strange relationship with money.

Mental accounting, a concept introduced by Nobel Prize winner Richard Thaler, explains how people often approach the value of money and resources in relative rather than absolute terms.

This irrational viewpoint has serious repercussions for both private and corporate decision-making.

The process of “mental accounting” entails classifying monetary transactions as either “income” or “expenses” or “wealth” or “investments,” and then handling them accordingly.

People’s propensity to spend money depends in part on how they mentally divide it up. The temptation to spend is greatest with current assets like bank accounts and cash, and it is lowest with future income sources like retirement savings. Better financial choices can be made by individuals and organizations with an understanding of mental accounting.

Brands can utilize it to promote their products effectively. Time is another resource that can be accounted for mentally in the same way as money. More effective use of resources is possible when people are aware of the flaws in their mental accounting processes.

As we have seen, mental accounting is a cognitive process that influences people’s views on the use of money and other resources. Individuals can benefit from a better knowledge of these biases while making financial decisions, while businesses can use mental accounting in their advertising. The implications of mental accounting on resource allocation, happiness, and financial well-being are relevant in both personal and professional settings.

The second episode talks about how the parts of our brains that deal with pain are close to the parts that work when we pay for something.

A lot of people find it painful to pay for things, but there is a way to make it easier. The situation is very important for how much pain someone feels when they pay. Both paying and spending are linked: spending lessens the pleasure of paying, and paying lessens the pain of spending.

The way the price is discussed or presented also affects the pain we feel when paying. Things that come before the price are more important than the price itself. ‘Scrooges’ are people who can’t part with their money, and ‘spendthrifts’ spend too much without feeling enough pain. It’s interesting that these buying habits don’t change when income does.

Making changes to the frame can make a difference. Putting the word “small” in front of a fee or selling the item as an investment makes people more likely to buy it and lessens their pain. When buying expensive items, for example, feeling good about yourself can make the pain of paying less noticeable.

When you think about losing something, it makes paying more painful. But sometimes people are willing to pay to avoid the pain of losing time. ‘Purchased experience’ is the idea behind how payment can make us less happy when we spend. Companies should think about other ways to pay, like coupons or tokens, to make the experience of spending more fun.

In general, businesses should try to make customers feel like they are getting something useful when they spend money, not like their money is going to waste. Companies can improve the customer experience and make the payment process less painful by figuring out what makes paying painful and using those things.

Is everything worth the price you pay?

Everything, including your time, work, and results, is worth what it costs. That’s why a lot of young people, especially women, are scared to say how much they want for their offer.

Things look different to me now, so many years after my first days on the job.

When you are just starting out in your job and need to set a price for your services, skills, or goods, don’t be afraid to include good information in the price.

I might not have been the best example of a responsible consumer, especially when I was young and starting to get my money after years of lack, poverty, and unmet wants. The unfathomable pleasure I felt made me drunk and put me in danger. I let my feelings control what I bought and how much I spent. I enjoyed the short-term highs of happiness and satisfaction that came from getting a lot of things that I didn’t need. I didn’t want to waste that big sample, so I used it to come to a lifelong conclusion that has been proven many times: everything costs exactly what it costs.

Many discounts made me buy clothes that, after being taken out of the closet one or two times, took up all the available room. Years later, stacks of cheap t-shirts, dresses, and jackets proved that the money I thought I saved by buying things on sale that I didn’t need was worth exactly what I paid for them: that moment of happiness when I realized I could afford something I never thought I could years before.

The second kind of pleasure came to me much later, when I realized that the money I spent helped pay someone’s salary. It tied together the story of the economy in my mind. The third wave of satisfaction that pile of useless clothes, which had seen me spend money without thinking, gave me when I decided to donate it: as I carefully cleaned and rearranged everything that was waiting for better opportunities, a smaller waist, or more courage, I thought about how happy someone would be to receive such a gift. That’s how it was. Girls, young moms, students, teachers, and people who helped other people had more fun with bags and purses. I smiled again because of their happiness.

Finally, I felt even better when I realized how much more room I had in my head thanks to the empty shelves, drawers, and closets.

The moral of this story, which I wrote about in my first book, is that you should spend money because it makes you and other people happy. Do the right thing and only pay what something is worth to you. In the same way, you don’t hide the fact that the worth that this exchange gives to the customer is part of the price of what you sell. For someone, this information helps them make a choice, and the sharing of benefits will make the happiness grow.

Determining the Right Price and Requesting It Without a Lump in Your Throat

Before answering the dilemma in the title, let’s take a moment to look in the mirror and ask ourselves where our fear of charging for our effort, time, and knowledge comes from. Whom are we comparing ourselves to? From whom do we seek approval or permission? In other words, where does our resistance to the idea of offering quality come from? When we tally up all the praise from customers and clients, reviews, and ratings, let’s turn it into a poster and put it in a visible place so that it reminds us every morning, noon, and evening why we do what we do.

After we’ve grappled with our own demons, I recommend reading the article “Stop Telling Women They Have Impostor Syndrome.” In short, the authors remind us that “impostor syndrome” or self-doubt is a diagnosis that is more frequently attributed to women, and they argue that the fact that this is even considered a diagnosis is problematic.

The idea, which comes from the 1970s, erases the effects of systemic racism, classism, xenophobia, and other biases, diagnosing a fairly common feeling of unease, uncertainty, and mild anxiety at work, especially among women. The best way to deal with impostor syndrome is not to fix the person, but to make a space that supports different types of leadership and sees different racial, ethnic, and gender identities as just as professional as traditional ways of acting, claim the co-authors of this piece.

So, feeling uncomfortable and doubting one’s own worth and traits is not a harmless problem that makes women think their prices are lower than they really are. Yes, there is a problem. Here are some ways that women can help their clients and buyers understand why a higher price is worth it. Of course, this isn’t about tricks or lies. It’s about making sure that both the supply and demand sides have the right idea of what’s going on. Thank goodness there are times when a few words are enough.

Scientists call the first factor that has a big effect on how much something is worth (and therefore how willing someone is to pay more) the “sense of fairness.” That is, customers think something is more valuable when they can see how much time or work went into making it.

In his educational example, Dan Ariely explored a locksmith who charged less for his services when he was new and it took him longer to do the job to show how unfair this concept can be for a beginner craftsman. It made clients even more likely to tip him when it took him longer to do the same job and he made more mistakes. A lot of research has shown that most people don’t know how much something is worth, so they figure out what a “fair price” is by looking at how much time or work it took to get it.

What can you learn from this then?

Customers and clients won’t be happy with the price you want to charge if they don’t think you earn it. If your customers are unhappy and make you lower your prices for no good reason, you won’t be happy either. People who count on the sales of your goods and services will be the most upset. That’s why it’s so important to make your deal seem as valuable as possible.

How do you do that?

The Inside BE portal provides an excellent example:

Imagine this ideal scenario: it’s Friday night, and you and your friends have just arrived at your favorite bar. You notice that there are two new beers on the menu, both at the same price.

The first one is an India Pale Ale (IPA) with the following description: “An authentic IPA craft beer produced by top American brewers. It’s perfectly balanced, bitter flavor thanks to the unique hop nuggets added at the perfect time in the final 15 minutes of the brewing process. This produces just the right amount of alpha acids without sacrificing the citrusy flavor of the beer.”

The second beer is also an IPA. But this time, it’s just an IPA, at the same price, and without a juicy description. Which one would you choose?

The answer is probably the first one. But why? You’ve just read a few sentences about hops, about which, honestly, you probably don’t know much. Heck, even though I don’t know anything about it, I’d try it right away.

The point here is not to educate the customer. The point is to show them the value behind the product. Allow the customer to imagine the production process in their head and visualize how the brewers work hard to provide the best possible experience for their table. Essentially, the product is described in a way it deserves to be described.

When it comes to catering, research also shows that the physical environment of a restaurant directly impacts price perception. Experts explicitly advise restaurateurs to provide customers with an environment that communicates the value of the service. We could remember numerous examples endlessly: banks, beauty treatments, education…

The same applies to product packaging. The way people perceive the packaging of a product directly influences how they perceive its quality. Therefore, don’t underestimate the importance of presentation. For the perception of value, often the presentation is more important than the product or service itself.

In conclusion, it’s crucial to show customers the value of your product. Describe the time and effort you’ve invested in delivering the best possible product or service to the customer. Ideally, create a brand that will be the first, only, and best in its category; in other words, create a “category of one” for your product or service. Use descriptive, vivid, and appealing language, and be sure to share the story behind your product. Ideally, use the same language your client uses in your own content.

Context matters.

The perceived value of your product also depends on its form and environment.

Do not underestimate that.

For the perception of value, often the presentation is more important than the product or service itself.

Remember, they say, “All that glitters is not gold.”

However, if what you offer is “gold,” don’t forget that it must shine.

Value elements from the perspective of your client or sponsor

Alex Hormozi, an American businessman, outlines a valuable formula for determining the worth of an offer. This formula hinges on four key elements from the client’s perspective:

Dream Outcome: This refers to the client’s ideal result or goal achieved through the offer. The more aligned the offer is with the client’s dream outcome, the higher the perceived value.

Perceived Likelihood of Achievement: This element reflects the client’s belief in the likelihood of realizing the dream outcome. If the offer instills confidence in the client regarding its effectiveness, it contributes positively to the overall valuation.

Time Delay: Time is a crucial factor. The longer it takes to achieve the desired result, the lower the perceived value. Clients generally place a higher value on offers that promise quicker results.

Effort Required: This relates to the amount of work or effort the client needs to invest. Offers that are perceived as requiring less effort, while still delivering the dream outcome, are valued more highly.

Let’s consider an example in the context of an employer investing in human capital:

An employer is considering investing in training programs for their young employees to enhance their skills and productivity. The value proposition for the employer includes:

Dream Outcome: This involves envisioning a future workforce with advanced skills, increased efficiency, and higher productivity. It also encompasses the positive impact on the company’s bottom line.

Perceived Likelihood of Achievement: The employer assesses the likelihood of the training programs effectively improving employee performance based on factors like the program’s track record, expertise of the trainers, and success stories from similar initiatives.

Time Delay: The employer evaluates how long it will take for the trained employees to start delivering the desired results. A shorter time frame, indicating quicker returns on the investment, increases the perceived value.

Effort Required: The employer considers the level of effort needed to implement and oversee the training programs. Programs that are well-structured, easy to integrate into the existing workflow, and require minimal administrative effort are perceived as more valuable.

In this scenario, the value of the investment in human capital is determined by how the employer values these factors. The likelihood that an employer will invest in a training program is higher if the program is well-designed and takes into account these value aspects.

Determining and Communicating Value

Valuing intangible assets, like brand recognition, is crucial for businesses. Even though intangible assets aren’t physical, they can significantly impact sales and success. Here are three ways to value them, according to the American Institute of Certified Public Accountants (AICPA):

Market Approach: This method determines value by comparing the intangible asset to similar ones in the market. It relies on relative analysis but can be tricky because finding similar assets from other companies with enough data can be challenging.

Income Approach: When intangible assets generate cash flow, the income approach is suitable. For example, the relief from royalty method estimates potential royalty payments or the avoided loss of income from using the asset.

Cost Approach: This approach is based on the idea of substitution and doesn’t consider future benefits related to time or amount.

Usually, costs related to making intangible assets are taken off right away. These assets don’t show up on a business’s balance sheet and don’t have any book value. When a business is bought, the price paid usually goes over the value of its assets as shown on the balance sheet. The extra money paid is listed on the balance sheet of the company that bought the item as an intangible asset.

In basic terms, figuring out how much an intangible asset is worth means comparing it to other intangible assets on the market, thinking about how much money it could make, or guessing how much it will cost. At first, these assets aren’t shown on the balance sheet. But when a company buys another, any extra money paid is counted as an intangible asset on the balance sheet of the buyer.

Effective communication of value through branding, messaging, and customer experience is a fundamental aspect of business success. It involves creating a cohesive and compelling narrative that resonates with customers, aligns with their needs and desires, and fosters a lasting and loyal relationship. Here’s an elaboration on the key elements of this process:

Branding is the foundation upon which value communication is built. It encompasses the visual elements, such as logos and color schemes, as well as the intangible aspects, like a company’s mission, values, and personality. A strong brand communicates a sense of identity and sets a business apart from its competitors. It helps customers recognize and trust a company, making it easier for them to choose its products or services.

Effective branding also involves consistency. When customers see a brand consistently delivering on its promises, it reinforces the perception of value. For example, Apple’s branding emphasizes innovation and user-friendly design. This consistency in branding has led to a loyal customer base that eagerly anticipates each new product release.

Messaging involves the words and content used to convey a brand’s value proposition. Clear and compelling messaging is crucial for articulating what a company stands for and how it can solve customers’ problems. Effective messaging should highlight the unique features and benefits of a product or service while resonating with the target audience.

For instance, Nike’s iconic “Just Do It” slogan is not just about sneakers; it’s a message that inspires individuals to push their limits and achieve their goals. This message communicates a broader value related to motivation and empowerment, fostering a deep connection between the brand and its customers.

Customer Experience is the tangible embodiment of a brand’s promise. It’s how customers interact with the company, its products, and its employees. A positive customer experience reaffirms the communicated value, while a negative one can erode it.

For example, Amazon‘s commitment to fast, reliable delivery has become a hallmark of their customer experience. This reliability reinforces the perception of value and keeps customers coming back. On the other hand, a restaurant’s commitment to providing a warm and welcoming atmosphere complements the value proposition of an enjoyable dining experience.

In conclusion, communicating value through branding, messaging, and customer experience is about creating a holistic and consistent narrative that resonates with customers, sets a company apart, and builds trust and loyalty. When these elements align, they reinforce the perceived value and drive customer satisfaction and long-term relationships. Businesses that excel in these areas often enjoy sustained success and growth.

Real-world examples of effectively communicating value

Google (Digital Assets): Google’s effective communication of the value of its digital assets, primarily its search engine, has translated into substantial financial gains. By providing users with a superior search experience, Google attracts a massive user base, making its advertising platform highly lucrative. In 2022, Google’s revenue amounted to over $224.47 billion, illustrating the direct correlation between the value of its digital assets and its substantial monetary success.

LinkedIn (Human Capital): LinkedIn’s emphasis on personal and professional growth through effective communication has positioned it as a valuable platform for both individuals and businesses. The company generates revenue through premium subscriptions, job postings, and advertising. In 2022, LinkedIn contributed over $13.8 billion in revenue to its parent company, Microsoft. This financial success is a testament to the platform’s ability to monetize the value of users’ human capital by connecting professionals with opportunities.

Tesla (Strategic Communication): Tesla’s strategic communication efforts, led by Elon Musk, have significantly impacted the company’s market valuation and financial performance. Musk’s public statements influence Tesla’s stock price and investor sentiment. Tesla’s market capitalization reached over $694 billion in 2023, making it one of the most valuable automakers globally. The effective communication of Tesla’s commitment to electric vehicles, innovation, and sustainability has contributed to the company’s ability to attract investors and customers willing to pay a premium for its products.

These examples highlight how effective communication strategies can directly translate into substantial monetary gains by attracting customers, investors, and partners, ultimately driving the financial success of businesses in various domains.

The Value Vortex Unveiled

Using the term “value vortex” to talk about intangible values means a constantly changing and linked system where intangible assets and factors create and build value within a business or an environment as a whole.

This idea is especially important in today’s knowledge-based economy, where intellectual property, brand image, human capital, and customer relationships are some of the most important intangible assets that determine a company’s success and ability to compete.

The value vortex is based on the idea that invisible values don’t exist in a vacuum; instead, they affect each other to create a steady flow of value.

How the topics discussed in this white paper converge in the Value Vortex

When talking about the value vortex of intangibles, strategic communication is very important because it turns on and improves all the interconnected intangible assets, making the system stronger and more active. Here’s a description of what it means:

Aligning Stakeholders: Good strategic communication helps align both internal and external stakeholders with the values, purpose, and intangible assets of the company. At the center of the value vortex are intangible values like brand image, intellectual property, and innovation. This makes sure that employees, partners, customers, and investors understand and support these values. When everyone is on the same page, these invisible assets work better together and as a whole.

Building and Improving Brand Reputation: One important part of the value spiral is building and improving brand reputation, which can be done through strategic communication. Companies can build and maintain a good brand image by using consistent messaging, stories, and involvement. This will help customers trust and stay loyal to the brand. In turn, this leads to more loyal customers, stronger brand loyalty, and a competitive edge.

Using Human Capital: Communication is key to finding and keeping good employees, who are another important invisible asset. Good communication can show that a company cares about its employees’ growth, new ideas, and a good work environment. It can also encourage people to work together and share information, which can help human capital reach its full potential.

Keeping and growing customer relationships: It’s important to use strategic communication to keep and grow customer relationships. It lets businesses hear what customers have to say, fix problems, and give each customer a unique experience. Companies can build a feeling of community and trust with their customers through personalized messages and interactions. This makes customers more loyal and increases the intangible value of customer relationships.

Data-Driven Insights: Communication makes it easier to get and share data-driven insights. By clearly explaining the worth of data and analytics, businesses can urge people to make decisions based on data, which increases the intangible value of data. In turn, this helps businesses find new possibilities, make smart strategic decisions, and keep making their operations better.

Collaborative Ecosystems: One important part of collaborative ecosystems is strategic communication. It helps organizations tell possible partners and allies about their goals and values in a clear way, which encourages cooperation and synergy within the ecosystem. Through shared resources and teamwork, this collaboration makes intangible goods more valuable.

Crisis management and reducing risks: Good communication is very important for controlling and reducing risks to intangible assets. A good communication plan can help limit the damage during a crisis or threat to your image, rebuild trust, and safeguard the intangible values that are at the heart of the value vortex.

In summary, strategic communication is the glue that binds together the various elements of the value vortex of intangibles. It makes sure that not only are intangible assets identified, but also their full potential is used. It creates an environment of understanding, unity, and flexibility that helps businesses deal with the challenges of today’s business world and use their intangible values to gain and keep a competitive edge. Without good strategy communication, intangible assets in the value vortex might not reach their full potential or be used to their fullest.

Actionable Steps you can adopt for Implementing Value Communication Strategies

Figure out your unique value proposition (UVP): Be in the category of one. First, be clear about what makes you or your business special and useful to the people you want to reach. Tell me about the problem you solve and how you do it better than other people. This is what your value communication plan is built on.

Create an interesting business story: Write a story that tells your audience about your unique selling point and connects with them. Tell stories about your business to make it memorable and easy to connect with. Make sure that your story shows what you stand for and what you believe in.

Sending the Same Message: Keep your message the same across all channels, like your website, social media, and face-to-face conversations. A consistent message shows that you are valuable and helps people trust you.

Know Who You’re Writing For: Spend some time getting to know the wants, needs, and problems of your audience. Personalize your message to address their unique concerns and show how your product or service can help.

Use social proof: Show off the good experiences of past customers or clients by using testimonials, reviews, case studies, and recommendations. Social proof is a strong way to get people to believe and trust you.

Show Your Expertise: You can share what you know by using content marketing, giving talks, or making teaching materials. Make yourself or your business look like an expert in the field to increase your worth.

Track and Change: Use analytics and feedback tools to see how well your efforts to communicate are working. Always keep an eye on how your strategy is working and be ready to make changes to better meet the changing wants and expectations of your audience.

Tips for Improving Your Personal and Business Value Perception

Self-Reflection: Understand your own strengths, weaknesses, and unique skills. Self-awareness is key to effectively communicating your personal values.

Continuous Learning: Invest in ongoing education and skill development. Staying up-to-date and continuously improving your expertise enhances your perceived value.

Networking: Build and nurture a strong professional network. Engaging with others in your industry or field can open doors to new opportunities and reinforce your value.

Deliver Consistent Quality: Consistency is vital in maintaining a positive perception of value. Deliver high-quality results consistently to build a reputation for reliability.

Communicate Impact: When discussing your achievements, focus on the impact you’ve made, whether in personal or business contexts. Highlight the positive changes you’ve contributed to or the problems you’ve solved.

Listen to understand: Actively seek feedback from colleagues, clients, or mentors. Constructive input can help you refine your approach and further improve your value.

Adapt to Market Changes: Stay attuned to market trends and shifts in customer needs. Being flexible and adapting your offerings to meet evolving demands enhances your relevance and value perception.

In summary, the value vortex concept provides a holistic framework for understanding how your intangible assets interact and create a continuous flow of value.

It underscores the importance of recognizing, nurturing, and leveraging intangible assets to drive success in today’s knowledge-based economy, whether on a personal or business level.