By now you have a handle on what you’re offering, who it’s for, how to build your ecoystem and nurture it, and the basics of the sales process. You’ve had your first few meetings and…you have someone saying yes!
First, don’t panic. My guess is you might be wondering about pricing (if you haven’t already had that conversation).
In my experience, most people starting out selling to corporations price their services WAY TOO LOW.
If you can, take yourself out of the fear place of “If I quote too high a price, then maybe they’ll say no.”
Instead, think “I’m going to give them a price. If they say no, then we have the opportunity to lower services as well as lower the price until it’s something acceptable to them.”
Ultimately, you don’t want to be negotiating on price AT ALL. (As in, price should never be a differentiator between you and another vendor. If it is, you’ll just end up in price wars and treated like a commodity.)
Instead, you want them to want YOU. Regardless of price and regardless of scope of work to start.
If a client is going to be price sensitive, then I typically back out services just to kick off an engagement at a lower price. My engagements inevitably lead to more work so I’m much more concerned about the fourth sale than this initial one.
And a little story about price:
A client asked me to do an assessment and coaching program for his sales team. I agreed and quoted a rate that I thought was both fair and a reach (for me). As in, it would be the most I’d ever made on that kind of work.
I delivered the assessments and on-going coaching and rolled into several other contracts with them over the years.
Not too long ago, I heard from my client that his parent company in Germany was doing a very similar assessment/coaching combo with the exec teams around the world. I quipped that the firm they hired (a well known player in Europe in organizational development) was probably more expensive than I was.
“Actually,” he replied, “we paid you 50% more.”
This, my friends, is a pricing win!
And if you don’t ask, you won’t get it. I was delighted to hear that I asked for (and received) much more than a very prominent firm. After all, I have little overhead- that contract was pure profit.
The lesson here is to know your worth and ask for it.
If it feels scary to up your rates (and I know that it can feel that way), here’s an approach that may help:
1. Write down what you’d like to get on a project you’re proposing to a potential client.
2. Now, double that number.
3. Check in with yourself. How comfy do you feel with that new number? If not at all, then go back to your original and add 10%.
4. How comfy do you feel with original plus 10%?
5. If you’re good to go, then start your pricing there. If you want to take it higher, do.
6. Make sure you do this checking in well before a meeting. You want to own what you ask for and feel confident internally as well as externally when you quote it or write it down in a proposal. If you’re at all wishy-washy or stumble over your pricing, you will not look professional.
In general, if everyone I’m talking to says yes, then I up my rates.
If I have several clients in a row agree to a certain rate, I up my rates.
If I think I can help a client realize significant growth over a short period of time, I up my rates.
A few years ago I veered away from my corporate bread and butter. I lost my confidence in that market and had to get it back. I did it by taking a 50% cut in my general retainer rates to get a handful of new clients. As I delivered high quality work at those reduced rates, I did regain my confidence and began to charge higher rates once more.
Pricing isn’t static or linear. It’s not the same for every kind of service or market or company. Play with it. Have fun with it!
The worst they can say is no!
See you soon for Part Nine.