Money, money, money. Most of us, I believe, have poor relationships with money. Another belief of mine is that some of us have warped or skewed views on the topic that we think are universally shared by others when they are not.

In this article I’ve tried to sift through these ideas and hold up the truths that I think are universal across time and cultures, and in so curating them maybe I’ll be able to help you improve your relationship with money and earn more.

1. It’s Impolite to Discuss Money in Personal Relationships
If your momma raised you right then you know it’s rude to ask someone you just met how much they paid for their house or to ask anyone other than your closest friends how much money they made last year or to volunteer your own information to such audiences.

In my own circle of friends I have some with whom we’ve agreed we’re going to have open, ongoing discussions about our financial situations and aspirations, and others with whom I’m just as close but do not have these conversations. Unless you come to an understanding with that friend or family member that these issues are on the table in your relationship, they’re not.

2. It’s Unprofessional to Not Discuss Money in Business
The corollary of the first truth is that it does not apply in a business context. The opposite is true: an inability to talk about money is transmitted as a sign of poor business acumen. Our professional troubles with money begin here by confusing these first two truths.

I accept that in some cultures it is agreed that the topic of money will come a little later in the conversation but etiquette is too often the stated reason for a discomfort in discussing what needs to be discussed when the time is right. In most of the Western world the time is right as early as the second sentence or soon thereafter.

A consulting client of mine years ago once asked me in exasperation how early he should be talking about money. (He was getting tired of me prodding him to broach the subject earlier and earlier.) Exaggerating just a little to make my point I said, “I want you to answer the phone, ‘Hello, ABC Agency – If you don’t have $50,000, please hang up!’”

3. Not Talking About Money Causes Stress
This was revolutionary to me when I was taught it: most stress in our lives is caused by the things we don’t do. Money conversations are stressful because we’re not having them.

If you want to relieve your stress around the topic simply program yourself to talk money early and often. A minimum level of engagement (MLOE) is a great way to begin to do this. (Follow this link to see ten more articles in which I discuss MLOE.)

4. Avoiding Money Discussions Causes Over-Investment, Leading You to “Cut Your Losses” by Accepting Less
The idea that a high cost of sale will cause you to take less money sounds absurd, even backwards, but this happens all the time.

How many times have you been in a presentation, dragging things out as long as you can until you finally arrive at the last page of your deck only to hear the client say, “We don’t have that kind of money!”

You cut your losses properly by having money conversations early and thus avoiding going down the long road with someone who does not have the resources to work with your firm. The opposite however is more common. In these situations where we have over-invested in the sale only to find that the client cannot afford us we’re more desperate to get something for our efforts and therefore we’re likely to take less.

With apologies to my first bosses, I proved this to be true for my first ten years in the agency business. You have more courage early than you do late. Use it to be discerning and ruthless where you have to be.

5. Budget Discussions and Ranges Change as You Move Up the Decision Maker Ladder
This truth is an important one to keep in mind to balance some of the earlier truths around talking about money early. You will hear objections and encounter limitations lower in the organization that do not exist higher up. Executives have the ability to get money and expand budgets, so don’t confuse the need to discuss money early with the idea that every budget or objection you hear is insurmountable.

Talking money early actually flies in the face of some principles of value-based pricing where the prevailing guidance is to speak about money last. This is true in conversation with executives who have the ability to bring more resources to bear. Lower on the totem pole you want to be talking money early. Once you get in front of the executive sponsor you can then put options on the table that are far beyond what their underlings think the company will spend.

The following conversation is just one variation that’s been relayed to me dozens of times over the years:

Agency principal to client: “Our fees for this would be $150k.”

VP of marketing: “We don’t have $150k for this.”

CEO, correcting his VP: “We have as much as we need to do this properly.”

Talk about money early unless you’re already dealing at the highest levels of the organization; leave it late for the big boys and girls.

6. Money Is a Tie-Breaker
Price is like chemistry in that it’s often seen as the reason a buying decision was made in situations where the ability or quality of the firms under consideration was seen by the client to be equal.

Almost everybody leaves out the last part that I put in italics. You win or lose on price when your perceived ability to solve the client’s problem is no greater than that of other firms under consideration.

The exceptions are the “price buyer” clients who want lowest price no matter what, but these are not the clients you build a business on. At worst you would sell excess capacity to these folks with all the value-added services stripped out. At best you wouldn’t do business with them at all.

To sell on price is to transmit to the client the very clear message that you do not believe your firm is a better option than the others. All this begs the question, why would anyone build such a firm? And, how do these people muster the inspiration to go to work in the morning?

So, if you’re losing business on price it’s not because you’re not cheap enough, it’s because you’re not good enough.

7. The Money You Command is Directly Proportional to Your Self-Esteem
Ahhh, now we come to The Truth. To correct my last statement in the previous truth, you cut price not because you’re not good enough but because you believe you’re not good enough.

Profit margin in a consultative sale of ideas and advice is a direct measure of the self-esteem of the salesperson. Period.

I’ll make a pretty good bet that your pricing has increased over the years. You probably charge considerably more today for the same thing you did five years earlier and the only thing that’s really changed in those five years is your confidence. Your confidence has grown the way most people grow their confidence: by feeling competent and then taking a small step. Once you get to the new pricing level you feel exhilarated and maybe even a little lucky to be charging what you charge. Then you get used to it and ask for a little bit more in the next step up. In this way you grow your confidence slowly.

We both know this is the cycle so why don’t we just make a little pact right now: you’re going to skip the next three price increments and go right to the fourth or the fifth with your next price on the next new client.

In this way you’ll hack the confidence cycle and reinvent your pricing and profit margin one new client at a time. This new pricing will soon become routine, just as all the increases have, and then you’ll hack it again, but you’re going to start with the next new opportunity.

Deal?

Deal. Now do it.