Ooooh… the dreaded, “I like it – but it’s just too expensive.” Or “It’s not in our budget.” Or “Your competition is 35% less.” Or some other legitimate – or not-so-legitimate – excuse.
How do you respond?
If you’ve done a good job of presenting your services, deliverables and value, then there are really only 3 ways you can respond…
1. Stand your ground. If you believe your price is fair or if you believe that your client is just trying to shave a few bucks off the fee, then stand pat. The client will either respond with…
- “OK, we’ll take it… can’t blame a guy for tryin’ (to save a few bucks!)” or
- “Thanks, but we’ll have to pass.”
I’m not saying you shouldn’t do this, but be careful here… inflexibility is not a perception you want anyone having of your firm.
2. Acquiesce and lower your price. You might be able to reduce the fee a bit and still make a good margin… or you might really want to secure this new Fortune 1000 client… or you might just be having a slow period and really need the business – but be careful here, too. Agreeing to lower your price sets a precedent and perception that you will cave under pressure. Your clients and prospects will learn that your proposal price is not your final price and every proposal could become a negotiation. No fun!
3. Lower your price, but… If you believe that your client or prospect really needs to lessen their investment, that’s fine… help them out. But make sure you get something in return. If the price goes down… so does what you deliver. This could include:
- A lower quantity of something
- A lessened frequency of something or
- The elimination of something
Using this strategy, your firm will perceived as one that is willing to “work with” your clients to help them out… and as one that is ultimately “fair” in their business dealings.
Price discussions with clients and prospects are uncomfortable and anxiety-producing, but when you enter into them knowing what your options are, you stand the better chance of creating a win-win!
Do you use any other price negotiation strategies that have worked well for you?