April 2021
What Prospects Believe About Our Pricing is What We Believe About Our Pricing
When prospects say, “You’re too expensive” (and some inevitably will), we may have a problem. Because on the one hand, they may be telling us the truth (or their truth). But on the other hand, we think we are worth it. This article identifies two issues, suggests that there may be one impediment, and provides readers with resources on the subject of pricing services.
That is an impactful statement. And of course, it is not quite THAT simple. But it goes a long way toward explaining why some prospects end the conversation quickly after discussing pricing.
(Note: Before you read any further, you should know most research suggests that pricing is NOT the primary reason prospects do not buy relative to any product or service.)
When prospects say, “You’re too expensive” (and some inevitably will), we may have a problem. Because on the one hand, they may be telling us the truth (or their truth). But on the other hand, we think we are worth it.
So, what is going on? Two things, I think.
#1: Prospects Have Price Expectations
Prospects have price expectations when it comes to specific products and services. When those expectations are violated, they immediately think “that’s too expensive” (or possibly, “that’s too cheap”). But those expectations might be wrong.
Prospects might think an engagement should cost $5,000, and maybe they can get one for that price. But maybe they do not know the difference between a $5,000 product and a $10,000 valuation.
That is why it is our job to show them the difference.
It is our job to set expectations.
Or maybe prospects do know the difference and they just do not care. That is why they make a Kia and a Mercedes … we must decide what market segment we want to be in.
#2: Prospects Can Smell Fear
Like animals, prospects can smell fear. They can sense if we believe our prices are too high from our body language or a slight hesitation in our voice.
If we are uncomfortable discussing pricing when the subject comes up (as it always must), it can make prospects believe that we do not believe in the value of what we are providing.
That is why it is our job to show them the value.
It is our job to demonstrate confidence.
If our fee is higher than our competitors’, then it is higher. We cannot be a trusted advisor and be afraid to “go there” with our prospects. So, we could say to our prospects:
“Just like your business, our pricing is a strategic decision.
It allows us to invest money in areas our competitors can’t because of their lower prices.
This includes quality staff and the best information resources available.
Which allows us to produce better results than our competition.”
The Problem May Go Deeper
If we are not charging enough, there may be something holding us back from believing in what we deliver and asking for what we deserve. It can result from messages we learned in our childhood about our own self-worth (e.g., see article #1 below).
Reading that Can Help
There are many books on the ins and outs of pricing … Ron Baker’s Implementing Value Pricing is probably one of the best. But you may not have the time to read that bible right now.
So here are three excellent, QuickRead articles that can help you embrace a new pricing mindset this week.
Why you’re not charging enough for your work, and how to change that (Forbes)
How to compete on value, not price (Inc.)
Understanding substitutes (Seth Godin)
Gentle plug
I would be remiss not to add a gentle plug for my upcoming NACVA conference presentation on using visual models to sell our BVFLS services.
Visual models convey the WHY, WHAT, and HOW of what we do and, thus, our pricing. Visual models are necessary adds to the sales call choreography because they allow us to start showing our prospects what we do instead of telling them. I hope you will join me!
Everyone has a different idea of what a successful practice is. The practice you want is personal because it is based on what “successful” means to you. I help practitioners focus on the strategies, tactics, tools, and tech to build/grow/scale their versions of successful practices. If you want some help with that, e-mail me at rod@rodburkert.com.
