How To Discuss Pricing With Your Clients
I am going to deal with how to discuss pricing with your clients in two ways:
1) How do we deal with the price in a first meeting where the client asks you directly how much you cost and
2) How do we approach this when we meet with a client on the second meeting with a proposal to deliver.
At The First Meeting
The best way to deal with price in the first meeting is to simply not discuss it. At this point, we do not know what the prospect needs, we do not know what they are currently paying and we do not know what they can afford.
We do not have enough information to hand to be able to accurately set an expectation for the prospect at all. So this is why we need to delay the answer to that question and the way in which we can do that is by saying…
“Well, I understand that there’s a need for every business to know what things are going to cost and at this stage, I have to say that I don’t know.”
The prospect then may say……
“Oh, you must have done this before, you must have plenty of clients like us, you must know what it is.”
“I’m sorry, believe it or not, each individual case is different. Now what I need to do is go away after this meeting and formulate what I truly believe is the correct solution for you. Once I’ve done that, I’ll know what the level of investment is and, of course, I’ll outline that to you the next time we get together. So, at this stage, genuinely, I can’t give you a price.”
Just leave it at that. I am not sure whether that is calling their bluff but it is literally putting it back to them and saying “Look, I’m not going to give you a price.”
Why Professionals Struggle With Pricing
Many professionals struggle with that concept because they feel pressure to comply and subordinate themselves to the prospect and say, “Oh well, I think if we do this it’ll be that and if we do the other….” And some sort of manual matrix comes out. This really is not required. We are building a relationship here and they are going to have to have the respect for us to go away and consider the most appropriate way forward. So that is how we would approach it in the first meeting.
At The Second Meeting
If the price comes up in a second meeting when we are proposing a solution, when there are decision makers around the table, that is a very different scenario. The subject of pricing at this stage is a huge issue.
“My advice would be to minimise the impact of the price”.
We can do that by taking whatever the annual figure is and dividing it into 12. Then, if we know what they are currently paying, we can then discuss this in terms of an increase to what they are paying, if indeed it is an increase.
So, minimising the impact of the price first of all, is key.
Build Client’s Expectations
Secondly, we build up our strength of the proposition first before the price is quoted and we build an expectation that the number that is coming is a lot bigger than it really is, giving the prospect a lot of comfort when the number presented is a lot smaller that they were expecting.
Do Not Discount
Thirdly, we must not discount, and so many of us on the first sign of any fee resistance, discount immediately. If we are going to be regarded as a trusted advisor, if we are regarded as being at the top of our game, then the price is the price. Maybe there is a negotiation conversation that happens after this but there is no discounting without something else being obtained in return.
In summary, never discuss the price at an initial meeting. I have given you the structure on how to approach discussing the price should the subject come up with the prospect at that first interview.
For second meetings, which are usually proposal meetings, make sure you minimise the price in terms of an increase if there is one.
Remember to set your proposal so that the prospect thinks the price is going to a lot bigger than it is and stick with your price, and by all means negotiate for something in return afterwards, but do not offer a discount in and of itself.
For more help and guidance on how best to approach the First and Second Meetings with clients the Addviser + Course Converting Leads into Clients provides insights and techniques to improve delivery in your meetings with prospect clients.