I’m aware I sit in the middle to high price range for my business services. That’s OK with me – I know I am valuable and I have the business balls to back up my pricing. But, because prospective clients sometimes don’t understand what I do, I get the ‘death by silence’ reaction to my initial pricing guide fairly often.
It doesn’t mean my services are too expensive, it just means there are clients who don’t yet understand my value. Yet.
You too may have heard the objection ‘you’re too expensive’ at some point in time. Your initial reaction may have been to take offense and then desperately try to justify your fees. You have to remember sometimes clients have a reason for thinking this way – they hold notions about your industry and the value of your services, or they simply have no idea and rely on the lowest price they see when they google something up. So before you storm off from the meeting or go into defence mode, it might be a good idea to take some time to uncover why your clients feel and think that you are too expensive.
The first thing to realise is that price is considered a reflection of value. Clients will think of your fees a ‘great price’ when the value is higher than the price, or ‘overpriced’ when the price outweighs the perceived value. It can take a while for you to get the fine art of balancing price vs. value right, but the main point is to be aware that clients can always find cheaper alternatives online, so if you are charging a premium rate you better be offering a premium service. If this is true, then it’s no longer a problem of justifying your price to a client, but simply finding the right type of client who values quality more than finding a bargain.
With all the work we’ve done in ideal clients, this is a great indication that you’re communicating your value well: someone who’s come off your website excited about all you offer.
Rule number one is you should never lower your rates just because you heard the phrase ‘too expensive’. If you automatically offer a lower rate just because someone made this comment, they will have this idea that they can negotiate a discounted rate by pushing you further. This is why it’s important to take time to find out the real reason behind your potential client’s apprehension towards your prices. Don’t think of it as a confrontation or conflict, but as problem solving exercise. When you ask for a good rate, you don’t want them to think they’re just giving up money. You want them to know they’re getting a valuable product out of it.
So here are three ways to overcome that awkward silence that comes when someone asks how much you charge and they simply stop talking:
Stay absolutely quiet.
The very minute to begin to defend your pricing you are decreasing your worth right there and then. Stay in your bosslady power! This requires a belief in charging what you are worth. Everyone feels they are not getting paid what they are worth, and yet almost everyone feels guilt the moment a client reacts negatively to their price.
Lawyers are awesome at this. If you need inspiration: re runs of Law and Order (or Ally McBeal, if that floats your boat.)
One way to get over this habit is to shift your perception of the value of your services. This is a huge mindset issue for many, many women (in fact, if I had a dollar for every woman in business I know has an issue with this, I could retire right now.)
Understand what you don’t know.
Accept that you actually don’t know about their money situation. Simply because a client has a thriving “looking” business and drives a Jeep and has kids and private school and a few industry awards under their belt doesn’t mean that something hasn’t gone horribly wrong in the finance department recently.
Lots of people will understand they have a block about money – that’s a different kettle of fish. However, some people are struggling to renew their domain names, put fuel in their car and keep their business insurance ticking over, let alone pay a premium price for a premium service.
The silence might be them taking stock of where they are and figuring out how to get to the stage where they can afford you.
(If you need ongoing assistance with value and worth, I’d love to help you. Join the Women’s Co-Op for free daily advice and accountability.)
Could you possibly cater to those clients who’d like to invest in your but need to spread out the payment over a schedule?
Payment plans should be written into your business plan and with consultation with your bookkeeper. Make sure these schedule are protecting you first but giving space for your potential clients. This is also good to keep in the background so you can offer payment plans to those clients you really do want to work with and who you trust will play by the rules.
Sometimes clients truly do have money blocks. My spending comfort level used to be around $200.00 AUD. Anything more would give me a panic attack! Then one day I had to pay for my new kitchen cabinetry. There was me in Ikea tapping to hand over $9000. That’s the first moment I realised my odd ideas about investing in something of value in one hit was a bit off. I had to rethink.
Lastly, check you’re getting enough “No”. Sounds wrong, I know. For a long time, every time I offered a quote, I got a resounding, “Yes! Sounds great!” It was really easy, and a real confidence boost. Unfortunately, it also meant I was just making up for years of me undervaluing the service I offer, and I was clearly not charging enough. When some of my proposals started getting rejected, it made me happier to know that I was closer to being paid my worth.
Asking for a good rate also reminds your clients — and yourself – of the confidence you have in the quality of your work. Even if you don’t get a deal going, you’ve established that you know your worth and you value the work you put into clients’ projects. Keep in mind that asking for a fair rate for your services is not simply about money, it’s about expressing your value.
In the comments below tell me what changes you can make to know your business value?