“Your Price is Too High”
June 18th, 2010 by Bob Bly
What do you do when a customer says, ?Your price is too high??
The best way to handle this is to prevent it from happening in the first place.
Your best chance of making the sale is if your price quotation is within the prospect?s budget. Your best chance of having that happen is to know the budget before you give your price.
And the best way of knowing the budget before you give your price is simply to ask.
Here?s a comfortable, nonaggressive way to get this information: Instead of just coming out and asking what their budget is, which makes some prospects uncomfortable, ask them this nonthreatening question instead:
?Do you have a budget??
The prospect will answer either yes or no. If they say they have a budget, the conversation goes like this:
YOU: Do you have a budget?
PROSPECT: Yes.
YOU: Would you mind sharing what that is with me?
If the prospect does not have a budget, this conversation might go as follows:
YOU: Do you have a budget?
PROSPECT: No.
YOU: Well, did you at least have a dollar figure or range in mind of what you?d like it to cost?
About half the prospects will give you an answer so you can tailor your price quote accordingly.
The other half won?t, so you just have to go ahead and make your estimate without this knowledge.
This entry was posted on Friday, June 18th, 2010 at 11:09 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
June 18th, 2010 at 11:14 am
Going to give that a try…
June 18th, 2010 at 1:37 pm
This is a fantastic thing to put on the table especially at the initial stages of the project.
I talked to a prospective client who came to me via a referral after discussing on the phone for about 10 minutes, he asked me.
“How much do you charge?”
I switched it around and said… “Well I’d actually like to get a feel for your budget and then perhaps adjust my fee accordingly if need be….So I’d like to ask if you’ve got a budget in mind…”
Prospect: “Yes, I do have, its about $150”
(me thinking: no way am I taking on this guy as a client. 150!!! DOLLARS!!!!… for a website)
Me: “Oh my, its hard to get a full blown website for $150..”
*conversation continues, deal is off, client can’t fork up necessary fees*
About a day later another website deal… BUT this time, I assumed that the client would be able to pay the considerably paltry sum of $500 for a website…
Turns out they couldn’t pay and I SHOULD have figured it out when one of the 3 guys I met said “cheaper would be better” on the phone about a few hours before.
COST – about 3 hours travelling time, a few drinks and wasted energy.
Conclusion – its definitely a MUST to get price out of the way, personally, I think it’s bothersome to talk about price, I mean if I’ve got a track record, I’ve boosted business for many companies, why on Earth should I lower the price for you???
June 19th, 2010 at 3:13 pm
Bob,
I have tried your method several times, and have found that most people will not tell you a budget they have in mind(even though they may often have one). What I have tried instead is giving a range of price for the work to be done. I usually say “I usually charge from x to y when I do work like that for my clients”. Is that something that is acceptable to you? In some cases, I get a no. Most often, I do get a yes.
Have you tried a range of prices at all?
Thanks.
Lesley Peters
June 20th, 2010 at 3:51 pm
If you are looking for a long term relationship with your customers, tell this customer to go somewhere else, Bob.
Customers that only buy on price have no loyalty to you at all and are gone as soon as they find somebody else that is prepared to go under your price.
You better concentrate on customers that appreciate you because of the quality of your work.
June 20th, 2010 at 8:54 pm
Thank you for giving consideration to a customers budget when discussing prices and costs. All transactions become a negotiation between the seller and the buyer.
Sometimes, the customer just won’t have any idea about the price of the work they’re requesting.
Sometimes the seller won’t have any idea about how to price their work.
Not everybody is a ‘bargain hunter’ but nobody likes to feel ‘ripped off’ either.
June 20th, 2010 at 11:58 pm
I’m doing the same. I don’t actually give my rate, unless they insist to get my rate. I always add to my last statement that price can still be negotiable.
June 21st, 2010 at 6:07 am
Position your rate in contrast of long term output / value to their company, not on the service or product your selling. Giving a rate for your service or product commodotizes what you are selling and creates a price sensitivity – which people perceive as a cost/expense. Instead, stay firm on your rate and on the long term value you bring to their company. [after discussion] “In order for me to help you raise profits by 30% (increase leads by 30%, save 40% year over year) etc., my rate will be…”
It isn’t always easy, but leaving jobs on the table due to rate sensitivity is sometimes the only way to preserve your value as a service provider/consultant.
I echo the comment by Hans de Groot
June 21st, 2010 at 8:34 am
I think one of the best things you can do, when it comes to price, is to tentatively pre-qualify a potential client.
I tend to do a little research. I try to look at the projects they’ve undertaken in the past. I look at their web site and their existing marketing materials. If it appears they have taken on projects that show they value good work and professionalism, then I move forward with the project. However, if everything I find screams “cheap” I pass and move on.
I find it usually only takes a couple minutes.
This method is not always the best route to take, but it does help, and I believe it has assisted me in avoiding clients who may not have an appreciation for high quality, or who view highly professional marketing materials as an expense rather than an investment.
June 21st, 2010 at 6:05 pm
I charge a flat per-project fee, based on what I consider a comfortable hourly wage for the approximate amount of time such a job typically takes. I distribute my per-project rate sheet to prospective clients early in the discussion. The ones who can see the value of what I’m offering will hire me. The ones who can’t won’t. Either scenario is a win-win situation.
June 23rd, 2010 at 2:39 pm
I could spend all day describing the time I’ve wasted over the years meeting with prospects who didn’t have budgets for even the reasonable and competitive prices I offered on their projects.
Highlights — or is it lowlights? — included the builder of million-dollar homes (in the early 90s) who I met with for a couple hours in his own 5,000-sq ft home, who during our conversation learned that my hourly rate was then $85, and who responded to my mailed proposal by leaving me a phone message on a Sunday morning that my price of $1000 to write his brochure was way out of line from what he was expecting or intending to pay.
I sent him a short thank you letter expressing my regret that we wouldn’t be working together and wishing him good luck in getting exactly the quality of brochure his company deserves.
I’ve gotten better at identifying and weeding out prospects who can’t afford me. Posting of typical copywriting charges on my website also helps to take care of tire-kickers. And the only time I lose to empty-walleted prospects any more is on the phone. Only qualified prospects get an in-person meeting.
June 26th, 2010 at 9:40 pm
I once asked a potential client her budget. Her response? “I don’t have a budget. When I want something, I find out what it will cost, and then sacrifice to get it.”
I still get chills when I hear those words.
June 27th, 2010 at 4:07 am
What happens if the price/budget is lower then you are willing to give or you could get better somewhere else?
June 27th, 2010 at 9:44 pm
I actually find it hard to give my actual price to my clients. There are some who don’t care about your pricing as long as the work will have great result. But for some, they are making a big deal and even will insult you for asking for a higher price.
June 29th, 2010 at 9:25 am
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June 29th, 2010 at 10:26 pm
When a client appreciates and understands and uses direct response, life is a lot easier. These clients genuinely understand the value of good copy.
July 5th, 2010 at 10:48 pm
I always make sure that we meet half way. If my client can’t directly give the job rate I do the pricing nd open for consideration if possible.
July 19th, 2010 at 7:29 pm
You need to know the flow of the work before you can give your quote. If you aren’t sure about the pricing, you can compare it to the pricing of your other work. As an alternative, you can simply ask your client about his/her budget. Then from there, you could finalize your pricing.
July 22nd, 2010 at 12:10 pm
I used to figure that if they say they can’t afford me that I didn’t provide enough value up front.
However, when I hear that, I fall back to a series of thoughts I want this person to go through.
1. He’s probably already defined to me that he needs me, and that what I have will resolve his worst nightmares, and could generate at least another $X00,000 for him. So we know what it’s worth to him.
2. I turn my marketing funnel upside down. Instead of working people from the low end up, I work them from the high end down. We already know he wants what I have, he said so in step one.
So, I just have to find the price point that works for him. I’ll cut something out of what we’ll do and make sure that he is good with that. Trading dollars for services and time, cut some out.
Or, I’ll go from one-on-one coaching, to groups, or even to email coaching, or even to having him join into an even larger group on my online forum. Everyone of those will give him similar results, and give him much of the information he’ll need. Some will just take longer, and he might not get as close personal help.
But, what I’m doing is moving him down my marketing funnel to find the price point to get him what he wants. He had already said he wants it in step one. I just need to find how to get it to him.
July 24th, 2010 at 8:44 pm
I always give range of prices.
Also if you lose a prospect because you they want a lot of work for a ridiculously low price, it is no loss to you; and I would recommend that you give the prospect the name and phone number of your number one competitor so this prospect can suck the live out of your competitor. Cheers!
August 3rd, 2010 at 3:10 pm
With our economic condition, most people are after of who can offer them lower price. This thinking is applicable for products or services offered. So as a service provider, for example, you really need to know first the budget of your client before laying down your service fee. In this way, you and your client can meet half way if you think his/her pricing isn’t reasonable.
August 5th, 2010 at 4:09 am
I’m doing the same. I don’t actually give my rate, unless they insist to get my rate. I always add to my last statement that price can still be negotiable.
That is exactly how I do it
August 16th, 2010 at 12:32 pm
I find the longer I’m in business, the more I attract prospects who want to know about my background, see my writing samples, and have an idea of my time availability before they get around to asking about pricing. In short, they’ve worked with professional writers in the past. Depending on the complexity of the project, at that point I either let them a detailed quote is on the way, or, if it’s a straightforward project I’ve done numerous times, I can tell them what the price is right then.
On occasion, that price is more than what they can or want to pay. If I can, I make some suggestions on how we can change the scope of the project to fit their budget. Sometimes that works for them, sometimes not. But I never burn a bridge. They may get back in touch with me at some point if their situation changes.
August 18th, 2010 at 5:56 pm
I hate those people buyers who would like to bargain your price even if they are aware of the right compensation for your work. Seems like buyers they don’t recognize the fact that you also need to earn for a living.
September 15th, 2010 at 6:01 pm
Here is a suggestion about pricing:
Tell the Client:
“I need to gather some more information about your firm before I can answer your question about my charge. I wish to do a work that maximizes your returns, and I am able to concentrate on that, without distraction of thinking about myself. It won’t be long now…and I will be able to give you your answer”
Meanwhile , I would look over their previous efforts. Do they look professional? Do they look shody, and a rush job? Find out how much importance they put on marketing vs. other facets of their business. Is their janitorial Dept. more important than marketing?!!! and so on.
The fact that I have told them I want to maximize their returns, without being distracted with concerns about myself would tell them I am professional, take all the time necessary, quality conscious, and there to stay.
I have built myslef up to seem “very expensive”, so then anything less than that is a plesant surprise to them.
January 5th, 2011 at 6:06 am
Your question is noticeable. Its a habit of every customer to criticize on price.
August 30th, 2011 at 8:06 pm
nice business tactic. it’s nice nice to hear customers complaining about your product price so avoiding them to ask those is a nice idea.
– Jack Leak
January 10th, 2012 at 6:18 pm
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