Over the years I’ve found that the scariest step in the sales process with clients isn’t the acquisition of potential business, and it isn’t the first meeting with a potential client. No, to my mind the scariest part of the sales process is the price negotiation.
Most businesses go for quantity when it comes to getting new clients. They offer low prices, and work hard to cover the demands on their resources. Think for a moment how it would be if you went after quality clients rather than many clients. If I asked you if you won most (or even all) of the proposals you gave to clients, how would you answer me? Many would be proud to say “Yes!”
I used to be like that. I’ve learned that winning isn’t always good for business. Yes, I could probably close every deal that came my way. But at what cost? Those clients shopping for the best price don’t really want me to help them, and are often far more ‘needy’ than the quality client who appreciates what I bring to the table.
If you’re winning the majority (or even all) of the proposals you provide, you’re probably selling yourself too cheaply. The demand for your resources is very high, but your resources are limited. It may even be that you are turning away business, as there’s just not enough time to do the work you’ve already got.One of the lessons a business owner must learn, and it is a hard lesson, is that it is perfectly acceptable to turn away business. If business is not on your terms, then you don’t need to say “Yes.”
If you limit the supply of your resources to match the demand for them then you can raise prices and increase profits.
It is good to be able to say to your potential clients “We are good at what we do, we know it, and our price reflects this.” It is a statement of your value to them. This confidence lets the quality client know that you’ll be taking care of them, working with them, and doing a good job for them. Your price means that there will be clients who can’t afford to work with you. That’s okay, you can’t help everyone, and you’re not right for everyone. Do the best job you can, and quality clients will chase after you.
It’s never easy to differentiate yourself from others who do what you do. Once out of the “the more clients the better” mindset it is easier to see a higher price is a statement that you are different. You have confidence in your product, in your abilities, and in your value to your clients. Having a higher price means that potential clients will ask “Why do you cost more than your competitor?” It’s a good question. It allows you to answer with all the many ways you are different, all the many ways that you offer more value to your client.
If you want a differentiator, if you want to show your potential clients that you’re different, then raise your prices and start the conversation that way.