We all want a good deal right? That’s pretty normal anywhere you go and in itself there isn’t anything wrong with it.
But there’s a difference between a deal and negotiating yourself into becoming the “Low Rent” vendor and letting clients dictate your pricing.
Just recently I had a deal come through that would have not only been a nice project to work on financially but also might have been fun to do as well.
This client came to me with an idea that I know I could make into a killer system that would make him a LOT of money over the next year. We’re talking multiple 10s of thousands easily.
The cost of the total project would have been around $5K to build out total and it would have been done over the next 3 months.
Everything seemed great until he came back wanting to pay $3000 for the entire project. (To do the math, that’s 40% off the price that he was given.)
Now I’m ok with offering discounts and such when they are appropriate but that’s a huge chunk for no real reason other than he didn’t feel like paying that much.
Now many would look at that and say “That’s still $3k. That’s a lot of money.”
You’re right, it is, but the point is not about how much it is (or isn’t after discounting so far down). It’s about the principle of valuing yourself.
I want you to think about this…
Have you ever walked into a restaurant to order a meal and said, “I really want that Chicken Parmesan. It looks awesome and I know it’s going to make an amazing meal. I see that you’ve got it listed for $14.95 on the menu. I’ll tell you what, give me that and I’ll pay you $10 for it.”
I wouldn’t even think about it. Would you actually do it? I doubt it.
I understand negotiations. I understand working with budgets. But I also know that as soon as we discount our price to someone because they said to, we’re letting them dictate our prices and soon we’ll be working for next to nothing. Not only will we be making less but that hurts the relationship as well.
I know from personal experience that I’ve never felt good about a client that nickel & dimed me to do a job for less than it was worth. Generally, I’ve felt resentment towards them and wasn’t pleased with the experience at all, or them. That type of relationship never causes you to want to give them your best.
It’s not a good place to come from in any relationship with a client. You won’t get paid well and they will get a crappy job from you. It’s just the nature of the beast doing business that way.
In fact, I actually love the way Dan Sullivan of Strategic Coach says he does business. He’s known to actually pay 10% ABOVE what someone asks for in order to get them to do the best job they can. I don’t know if he does it all the time but I’m sure he does it when it counts and I doubt very much that he ever tries to be cheap with a vendor.
Any good coach is going to tell you to raise your prices. Most of the time we undervalue our skills and talents by a lot. I know that I even do it from time to time.
I can honestly say that I know a few people that do the same types of things that I was going to do for this project and they wouldn’t even blink when telling him that their charge would have been about $8K for the same project.
They are that confident in their abilities and know they are worth it.
In fact, I doubt very much if I had told this client that they needed to charge me almost 1/2 of what they asked for their personal time, they would have laughed me off the phone.
So how do you deal with a client that doesn’t want to pay what you charge?
First, if you give them a price, don’t budge!
There’s nothing wrong with offering payment plans or lesser packages but don’t drop your price.
I’m happy to say, “Well if that’s not in your budget, here’s an option that is within your budget….”
There’s nothing wrong with that. In fact, I’ve had clients that wanted my 90 day coaching program but just couldn’t afford it. I started them with a 2 session package instead. The goal is to work up to the bigger one.
That’s ok. Help them within their budget but not at your expense. It doesn’t do you any good to help them if you can’t finish the job because you had to go get a job to pay the bills.
Special Offers And Promotions
If you run a sale because you want to run a sale that’s fine. Even if you do a 50% off sale (we did one just last month in fact!) that’s fine. It’s on your terms, on the products you choose, and YOU are making the decision as to how it works.
I don’t mind running sales. There are times when I’ll even give someone a discount because I feel the urge to.
The big difference is that I do it because I feel that I want to, not because someone else demanded it. THAT alone is the point.
Do you want to be known as the nice guy that gave them a deal? No problem! Go for it if you really want to.
Do you want to be known as the cheap guy that is willing to drop your price just to get the client? I don’t recommend it. Trust me, it’s not the way you want to run your business. It lets your clients run you and is a guaranteed way to spiral down to having a business that you don’t love any more.
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