By Alan Graner
You’re meeting with a prospect. Everything is going well. The people around the table nod appreciably as you explain the benefits your service offers them: increased productivity, less wasted time and improved efficiency that would allow them to delay hiring more employees for six months at least. They ask for a proposal. You deliver.
And then…a “little” problem.
“Your price is too high.”
They love your proposal, they love your services, they love your company. The only thing they don’t love is your quote. If you’re willing to drop it 15%, they will sign.
Here’s the problem.
Yeah, you can drop the price and still make a small profit. But there’s a greater principle involved.
If you agree to lower your price, you’ve proclaimed to the world that your pricing structure means squat. Perhaps it’s arbitrary. Or inflated so you can lower it to the price you really want. Or it’s always five percent lower than the competition. Whatever your reasoning, one thing is certain: it isn’t firm.
And if it isn’t firm, then all your prices and fees are open to negotiation. Obviously you’ll do anything to close a deal. And that has the faint smell of desperation.
If you’re willing to cut prices, what else are you willing to cut? Quality? Performance? Reliability?
How to lower prices without losing your credibility
The solution is quite simple.
If they want to lower your price or fee 15%, no problem. You just cut back the services you offer 15%.
Instead of next day delivery you offer three-day delivery. Instead of onsite support you offer telephone support. Instead of all the bells and whistles you only offer bells. Instead of a full-time rep you offer one on a part time basis.
This establishes two principles.
First, you mean what you say. Your fees are firm.
Second, you’re flexible. You understand your prospect’s/client’s financial situation and will gladly work with them.
You may even discover your prospect/client is more than happy to receive reduced services for a reduced price.
And if they don’t? If they threaten to hire your competitor if you don’t lower your price?
That, my friend, is a decision only you can make.
How do you handle the price problem?
Image: Billy Alexander
Alan Graner is Chief Creative Officer at Daly-Swartz Public Relations. He lets Jeff Swartz worry about fees. To get a firm quote for your PR needs, email Jeff at firstname.lastname@example.org. And yes, he’s flexible.