Inevitably, when you price correctly, some clients will tell you that your prices are too high. In fact, if you are not hearing that routinely, you simply are not charging enough.
Yet, there is a simple way to address such complaints. Give them a lower price.
Now, I’m not advocating for simply caving on price; this must be done in lockstep with removing value from your solution. It must be a “get-give” trade-off. In other words, you give the client a lower price and they get less value.
Unfortunately, it doesn’t play out this way for most young consulting firms. They tend to relent on price while maintaining much of the promised value.
I’ve done it. I’ve caved on price yet failed to refine the scope. And, it hurt the relationship - it created that “us versus them” mindset and opportunities for mutual benefit were hurt.
The good news here is that it doesn’t need to be this way. With a better understanding of how businesses buy, you can spend time up front discovering what the client values.
Interestingly enough, only 20-30% of buyers actually care about price alone. And, that statistic is for all businesses; I’m confident it is lower for consulting opportunities.
Three Types of Business Buyers
Relationship Buyers - those taking the long view
These buyers don’t switch vendors often and gain strategic advantage by collaborating with trusted vendors over time. In fact, they are skeptical of low prices. These buyers will pay to make sure they are getting the best quality.
Value Buyers - those seeking the the best ROI
Instead of focusing on the up-front price, these buyers are most interested in the long-term return on investment. They perform extensive research when selecting consulting firms. They, ultimately, partner with firms that can prove the impact and financial results the firm offers.
Poker Players - those that want value yet focus on price
Secretly, these buyers are Value or Relationship buyers yet they pretend to only care about driving the price down. They bluff and like to pit multiple consulting firms against one another. Discovering their real intent is as simple as giving them what they want (low prices) yet removing the value you originally offered. When they complain, they have shown their hand.
Pricing With Confidence
By taking the time to discover what type of buyer your client is, you gain leverage in how you approach pricing and the overall value your solution represents.
In consulting, it’s almost never about the price. If you can demonstrate the value of your solution is real, pricing considerations will always come afterwards.
This is where sharing your wins and demonstrating your knowledge and expertise is an instrumental tool. The time investment here will pay dividends long-term.