The meeting has gone really well, your potential client seems to really like you and what you’ve got to offer. And then it comes to the discussion around price…
Not everyone finds talking about price difficult, but from my experience of working with groups and in one-to-one sessions with literally hundreds of people each year, I know that many of us really squirm when it comes to “that” part of the meeting. This happens especially when the “product” is the person themselves – their coaching, consultancy or training services, for instance.
The irony is that price is probably one of the items that is on your potential new client’s mind as they are listening to, and hopefully getting excited about, what they are going to be able to do as a result of working with you. Maybe they even have a niggling worry – this all sounds so good, is it going to be more than I can afford?
In this article, I’m going to explore:
- Why it is important to talk money with your customers
- Why talking about price might be difficult for many of us
- Some tips and techniques to help you talk about price with confidence.
It is important to talk money with your customers because…
- Customers want to know
That doesn’t seem very insightful, does it? But it’s the truth. Unless you are successful and fortunate enough to be selling to clients who have unlimited budgets, your customers need and want to know how much it will cost. That’s a good enough reason to become confident in talking about pricing just on its own!
- Customers will appreciate your honesty.
Customers want to do business with people and companies who are straightforward, transparent and honest. Think about your own buying behaviours and preferences. They value straight answers to their questions, and it will help them if you table price first, rather than them having to find the right moment to ask. Transparency leads to trust, which leads to sales!
- You can save everyone a lot of time.
Being transparent about pricing means that you save yourself time by not pursuing people who don’t have the budget, or who have a different perception of value. You will save those people time as well. You will also save time for you and the customers who do choose to buy from you. If pricing is clear, upfront and agreed, you can then spend more time together on adding value to each other’s business and discussing how you can best service the client.
Reasons or excuses?
Sometimes there are genuine reasons for not communicating openly about price. In my experience, these include:
- Strict competitive tender processes.
- Complex projects involving highly customised design – I’m not talking unique training sessions here, more building a new state-of-the-art hospital or fleet of warships!
Sometimes clients are concerned that competitors will find out your pricing structure and try to beat it. My response to that is that if price is the only differentiator you have, you’re on a margin-reducing slippery slope, and I’d strongly encourage you to think about your offer and positioning in the market. I have some free guidance and resources here if this is something that resonates with you.
Why is it so difficult for some of us to talk about price with our customers?
If you’re finding it difficult to talk about price, some of the reasons might be:
- You don’t believe that what you’re selling is worth the price. (This can be the case particularly for coaches, consultants and trainers who are indirectly selling themselves!)
- To deal with this one, really work on your sense of value. Seek out some testimonials from your delighted clients and remind yourself of the evidence that your company’s products and services really do make a difference. Take some short case studies with results into your sales meetings with new clients.
- You might find money talk embarrassing.
- We learn our attitudes to money from being very young. Think about how your parents and other adult relatives discussed (or didn’t discuss) money. What was appropriate then, isn’t appropriate now that you’re in business. Money is the language of business! As you become more open to talking directly about price, it gets easier, I promise!
- You may fear rejection.
- Remember, a ‘no’ is never permanent. It just means ‘not right now’. And if a client says ‘no’, that’s ok. I used to sell advertising and had to get through lots of no’s to get to my yeses. See it as part of the process. Edison said that he didn’t fail 999 times before he successfully invented the lightbulb, rather that there were 1,000 steps to getting it right! This sort of resilience and tenacity is important if you’re going to make sure your business achieves its full potential.
- You don’t like negotiation or conflict.
- If this really is a barrier for you, I recommend some specialist training or coaching. It’s a necessary part of business. From my experience working with people who avoid negotiation and conflict, you can quickly become much more confident by increasing your skill levels. Increased exposure and familiarity, combined with the right toolkit of skills – that are all learnable – will have you handling these like a pro in no time!
- You might not be sure if how you’re pitching the price is right – i.e. too high or too low – in relation to what the client wants, and what your competitors are charging.
- Do your homework! And don’t just aim for the middle! Pitch for what your product or service is actually worth. You will have plenty of testimonials and case studies that support your price, plus no-one delivers quite like you.
- You haven’t got a clear pricing strategy in your mind before you enter into your discussions with your prospect.
- Don’t waste everyone’s time with a meeting if you haven’t got a clear strategy! Yes, you may be having a discovery meeting with your client, but you still need to know your prices! Every new meeting you have is also a chance to gain a new customer. Have a look at the first tip below for help with this.
Tips and techniques for confidently talking about price
- Create a core pricing structure for your products and services in advance, prepare your strategy and stick to it!
I know that so many of us think that so much of what we are do is special, and has to be priced on a project-specific basis, but so often that’s not true. Think about how you spend 60-80% of your time and the core items that you offer, and then “productise” them so that you have a menu of products and services. If a client wants something outside that, of course you can be flexible. You can use your menu as a starting point and build from there.
- Ask your client a question
- Do you have a particular budget that we need to consider?
- This will give you some indication of the level of investment the client has in mind. If the client has no idea, that’s fine. At least it opens the door for the pricing conversation.
- What sort of financial benefits are you hoping to achieve?
- This one is useful for more complex products or services, that you might be customising for your client. By understanding the customer’s target goals, you can then pitch your price according to the value that you will be delivering for them.
If you are a consultant or coach who works on an hourly or daily rate, you could ask about time, for example:
- How many days / hours were you thinking of for this project?
- You can then explain your rates and convert it into a headline project price.
- Be direct
Share the price early in the conversation and do so clearly, simply incorporating it as part of the conversation.
- Don’t “justify” your price
Once you have given your price, don’t go overboard on justifying it, or ‘explaining’ why the price is what it is. Of course, you need to demonstrate value, but leave it at that, rather than overselling. Customers need some time to think and process what you are offering – jumping into explanations of how this is great value just adds noise and confusion to the conversation for your client and for you. It also communicates your lack of confidence.
- Don’t budge if your client asks for a steep discount
Unless big discounting is the norm for your industry, have the confidence to stand by the pricing strategy you set out for yourself. Think about the longer term. Your ideal clients will value you, and the products and services that you provide, and will be accepting of the concept of the trade-off of price for fair value.
Now take action!
My IdeaTime Membership can provide you with loads of support, answers, resources and coaching on this topic and lots more besides. Check it out now at www.ideatime.co.uk/membership, or email me direct at firstname.lastname@example.org.
Oh, and just for transparency, it’s a very affordable £42 plus VAT per month, or £378 plus VAT per year. Incredible value at less than the half the cost of a flat white from your favourite coffee shop every day for a year!