There is a big difference between selling your cost versus selling your value…
These are words that can be difficult for service-based business owners to respond to. Most of us are not too comfortable with selling in the first place. And when someone questions how much you’re charging for your services, it can dent your confidence and make you doubt yourself.
Let’s start with how you shouldn’t respond…
- Don’t automatically assume you’ve lost this client.
When you hear these words – recognise it as an indication that you’re at the start of the sales journey with somebody who might actually be interested in what you have to offer. It’s just that there’s still some work you need to do to help them arrive at the right decision for them. - Don’t panic. Don’t immediately lower your pricing out of panic when someone says you’re too expensive, otherwise they’ll assume that you were over-charging to begin with. That’s not what you want. And you’ll miss a chance to open a dialogue that can lead to better understanding of your client’s requirements and concerns.
- Don’t defend yourself. At the end of the day, it’s your business. You don’t have to defend yourself or your prices, unless you want to. Just as your client has the right to object to your prices, you have the right to stand by them. This is especially the case if you are happy with your current workload.
- Don’t take it personally. Objections around price are just part and parcel of the everyday business negotiation, so don’t take it personally. It’s not about you. In fact, think of it this way… if you’ve never been told you’re too expensive, you’re probably not charging enough!
How you can respond
- Start a conversation
The good news is that when someone says you’re too expensive, it needn’t always be the end of the conversation. Often, when a potential client mentions your pricing, it’s a signal that they want to buy from you, but may need some convincing in order to overcome their reasons for hesitating. These objections may have nothing to do with your price and everything to do with where they’re at. Sometimes they’re either not 100% committed to a particular course of action, e.g. they may just be price shopping, or they may simply be using price as an easy way out for not wanting to buy. Whatever the case, by asking your client a few simple questions in a non-aggressive way and listening to their concerns, you can find out if they really want to work with you, or are using price as an excuse.
- Acknowledge that you’re expensive
Communicate to your clients the real value of your work, the processes and time involved to help them get results. Explain to them that it’s taken years of dedication for you to build your expertise and knowledge in your field. So yes, you are expensive. But if you can convey the true value of what you do, then your clients will realise that your services are worth the price tag.
- Ask yourself: “Is this my ideal client?”
If not, let them know you might not be the best fit for them and recommend someone else that would be a better match. If the person is your ideal client, you’ll have to explain and show them the quality and value of your work with a bit more dialogue and a closer look at their actual requirements and what you can do to help them.
- When a client genuinely can’t afford you. If a client genuinely can’t afford you (yet!), ask them what budget they have in mind. You can then offer a reduced solution to match their lower budget, if you want to. If their budget is too low, then politely tell them you’re not a good fit right now. Be firm but nice and keep in touch with them – the situation may change further down the line.
Why People Don’t Buy
There are many reasons why somebody might decide not to buy from you. Many of these reasons have nothing to do with the customer’s initial perception of price, but have everything to do with how they perceive the value of your product or service. Research suggests that ‘the price is too high’ is the least common reason why people don’t buy.
What reduces the perceived value of a product or service?
Your product or service will lose perceived value if the customer :
- Doesn’t feel as though you’re taking them or their needs seriously.
- Cannot see the value in your product or service.
- Believes the risk of purchase is too high for them.
- Doesn’t understand something about your product or service.
- Lacks the desire for your product or service.
- Is not ready to buy now.
- Feels as though they are getting too little attention.
- Experiences errors which remain unresolved.
These examples above represent some of the real reasons behind why a customer may not buy. And of course, there will be some occasions where the customer cannot afford your product or service.
Positioning your service to remove these obstacles for your prospects will significantly reduce the number of times you hear that phrase ‘you’re too expensive’.
Tips for creating incentives to encourage your prospect to buy
Here are some ways you can position your product or service to give customers reasons or even incentives to buy:
- Create irresistible offers.
- Offer testimonials, case studies and quotes that demonstrate the effectiveness of your product or service.
- Develop a coherent brand that gives your customers a sense of trust.
- Pay attention to your customer service and seek to delight your customers.
- Learn to speak the language of your target audience so they feel “Yes! It’s like you’re talking about me!” Feeling understood and heard is a huge emotional motivator when it comes to buying.
- Meet your potential customers wherever they are in their buying cycle and build a relationship with them so that when they’re ready, it’s you they want to buy from.
- Create deals with more advantages for the full package.
- Find ways to make your service a good investment and then communicate those to your audience.
- Don’t forget to demonstrate how your product or service solves your customer’s problems and saves future losses.
- Add genuine scarcity – if you can. This can be exclusive one-time offers, closing dates for courses or something else.
- Provide a guarantee, or find ways to reduce the customer’s sense of risk.
- Offer payment options to make it easier for your customers to buy.
Find out the facts first.
Try to establish why your prospect is considering hiring you, what value he or she sees in your services, what problems they’re trying to resolve and what questions or doubts they have about your service.
This is where you learn about what they are looking for as well as:
- Their budget (important)
- Their time scale
- What’s important to them
- What they don’t want
- How they will know when they’ve found what they’re looking for?
- Their current perspective on your product or services.
Analyse their needs.
Now you’ve asked the questions, it’s time to quickly identify their needs. For example, they may want to save time, want a return on investment and to find some clarity about the subject of your service. But they’re not too concerned with how many free bonuses they might get. So when you come to present your services to them, you know what to prioritise.
Present the product to them.
This is where you get to highlight how your service fulfils all of their needs. You can also brush over some of the additional features that they may also enjoy.
Tailoring your pitch this way, helps your customer to run through their mental checklist with you confirming that your product ticks the boxes for them (and hopefully goes beyond their expectations).
Confirm that what you’re presenting is what they want.
Seeking your prospect’s confirmation that they want what you have brings you two opportunities.
First, it gently locks the prospect into committing that your service is what they want (which stops them from back-tracking when the price is presented).
Second, it gives you the opportunity to hear and address any further objections they may have – BEFORE you present the price.
The close.
Now you have answered all of your prospects’ concerns and they’ve confirmed that they want what you have, that’s when you move into the closing phase.
You should not mention the price of your product until you’ve reached this stage and you have the agreements and confirmations in place. It’s in this phase where you’ll discuss the price.
Conclusion
If your prospect still tells you you’re too expensive at this point, it’s time to help them dig a little deeper.
There are usually only a few genuine reasons why people don’t want to pay your price. By asking them the right questions, you can help them sort through their thinking and reasoning, work through their fear and reservations, and help them come to the right decision.