Don’t quote price ranges. When you tell a prospect that your offering falls somewhere between X (the lowest price) and Y (the highest price), you both lose.
The prospect will hear what’s in their best interest: X. The vendor (you) will hear what’s in your best interest: Y. No matter what price you settle on, the customer will pay more than they expected and you will make less. Both lose.
When quoting prices, give one number. You may need to negotiate down from there, but the customer can only feel like they are winning. And if you go in prepared to trim down from the original quote, you will win too.
Good point, Mike, but I’m not sure I totally agree. If you go into a meeting with a number you intend to whittle down to make the client feel like they ‘won’, it also sends a message that you have ‘padded’ the amount and there is probably more they can get you to give up. I try never to reduce a price without at the same time reducing services.
Disagree!??!?!? That will get you banned from the site (I kid. I kid).
I think you make an EXCELLENT point. Thanks for sharing!
I think in general it’s ok to move on price, but you should never make a concession without asking for something in return. That way, you:
a) don’t give the impression that you were padding the initial quote
b) don’t make them smell desperation, which only leads to them either going for blood or having second doubts about how valuable/desirable your service/product really is
c) ensure that they leave feeling good about the deal. Imagine I offer you Widget X for $100. You say “that’s too much”. I say “ok, fine – $80” without asking for anything in return. You say ok. Then after our meeting you think to yourself “I probably could have done even better. Why didn’t I keep pushing?”
The concession you ask for in return can be pretty much anything, and avoids these problems…
GREAT TIPS, Kurtis! Thank you.
exactly true, you don’t go into a Rolex shop and barter. You do that at a pawn shop.
Much like Kurtis said , I do not like moving on price without a great reason. The one thing I often do that works well is ask for a longer time commitment. So if I quote 400/month for 6 month minimum and they want it for $300/month, you can say I will do $300 if you agree to a 12 months minimum.
I totally agree. Price adjustments must always have consequences. Otherwise we cheapen ourselves just by dropping the price.
be confident enough in your skills to quote a price that matches the value you are giving
Absolutely true. Any tips you have on this would be MUCH appreciated.
I always try to put it in terms of how much each customer is worth to them, then take simple math and work outwards. For example if 1 customer is worth $500. (keep in mind repeat business is a factor)
Take a traffic target like 1000 unique visitors a month / conversion rate of just 2% is 20 customers x $500 = $10000.00
Now if you can produce even 10k why wouldn’t they pay you 500-1k a month no questions asked (they never have an answer against that question 🙂 )
I realize that business is far more complex and has more factors you should probably customized to each business but this is how I approach it in a basic sense. You could also take the approach of talking about how much they spend on other forms of advertising for the same ROI.
Excellent point. It is pure, simple math.
This applies every bit as much to deadlines. Most techies say “6-8 weeks” thinking that they may be able to do it in 10, but that sounds really long….
The client hears 6 weeks and hopes that perhaps there can be some “found efficiency” that could make it happen in 5… (and they really need 4 but don’t say anything because they could stretch and survive with 6).
The two week range just caused a 6 week mismatch… and that 6 weeks is miserable to live through.
Great point Dan. Just so I am clear…. are you suggest to say “its takes 8 weeks” and beat it. That’s what I would do, but want to see if you agree or feel otherwise.
I’d tell them 10 (based on the scenario above that said the tech thought “they may be able to do it in ten”) and work like crazy to over-deliver.
90% of deadlines are arbitrary – and you can often lead your client to a “better date”. For the 10% that are truly hard deadlines, bust it and get it done… but you have the margin to do so because the rest of your clients’ expectations were “adjusted” at the beginning.