My client Madeleine was offered a very appealing consulting project. She liked the client and loved the work she’d be doing. When asked her fee, she quoted them $15,000. Although that amount is less than she felt her work was worth, she really wanted the project and hoped the lower fee would help.
After a short time the prospective clients came back with a question: what could they get for $4,000?
What should Madeleine do? Before we answer that, I want to look at why this kind of thing happens.
So why does a potential client push back on price like this?
- Wants it but can’t afford it.
- Doesn’t really want it and is curious to know what else is available
- Wants to see how you’ll react and if you’ll lower the price
- Add your “People are a Mystery” reason here.
I know Madeleine is masterful at not only expressing but actually demonstrating her value. She has unbelievable credentials, and that made me think the prospect was actually just testing her (reason #3 above).
As I see it, there are three responses to a question like, “What could we get for $4,000?”
1. Remove value from your offer. In this case, you can review what you planned to do and offer solutions that would fit the new budget. For $4,000 Madeleine still may be able to make an impact on the project, but she might propose less time and less comprehensive solutions.
Importantly, she also may feel resentful or, maybe, just less excited to do the project this way. Personally, I don’t think this is a good energy with which to start something, but not everyone gets emotional in these situations.
2. Turn them down flat. You can say politely, “I work best with clients who are looking for a big improvement in their business. The fee you want won’t allow me to do my best work on your project, so I’d prefer to pass.”
3. Agree to do the same work for the lower price. This is a real temptation that can have lasting negative consequences for you. First, it’s a violation of an agreement you made with yourself when you decided on the fees. Next, this teaches the client that you will compromise and jeopardizes your ability to get full fees from them in the future. Sometimes, it makes you look desperate or wishy-washy and will likely erode respect.
What if you say you’ll give less value for the $4,000? Will you, really? It takes clarity and discipline to actually do less. For example, if you’ve committed to providing specific deliverables for the value, such as “a financial plan for the next 6 months of the business,” it may be hard to do a smaller version of this. You’ll have to rewrite your proposal entirely.
We’ve been talking about a consultant charging project fees, but what if you’re in a business, like massage or therapy, in which there are hourly fees? What do you say when someone really wants to work with you but can’t afford it?
Two words: “Save up.”
If you had a big job interview and went to your local department store for a suit, they wouldn’t sell you one without getting money from you. “But I have a job interview, and I feel good about it.” They still would tell you to go get the money and then come buy the suit.
Why do we – or potential clients – feel we can do business transactions without payment? It’s perfectly reasonable to say, “I’m glad to hear you want to work with me. I would like to work with you, too. The fee is $45, so when you’re able to pay that, please call me to schedule an appointment.”
FAQ about standing up for your price
Q. Samantha, I don’t have enough clients now! I have to take whatever I can get.
A. OK, take whatever you want. But just know you’re creating a pattern that will be hard to change later. If you teach people now what your value is (by clearly articulating your brand), then you’ll have fewer of these difficult conversations about price. (There are better ways to get more clients.)
Q. Is there any way to avoid the situation Madeleine got in with her fees?
A. Some consultants find that offering a range of options makes it clearer to the client what they’re getting for their fees. You could offer Options A, B and C, but I’ve still had clients ask for the value of Option C at the price of Option A. Sooner or later, you will have to stand up for yourself and your value.
Q. This sounds like a pricing issue. Why did you say it’s about brand?
A. Three reasons: building a strong brand hinges on the value proposition – what people get for their money. If your value proposition is weak or unclear, you’ll struggle here. Second, your brand is most appreciated (valued) by your perfect clients. Pushback on price often means the prospect is not a good fit and won’t ever truly “get” your brand value. Third, brand value has to be communicated. If you can’t make a case for your brand and why it’s worth what you’re asking for it, you need to improve your messaging.
What are your FAQ about pricing? Have you ever been in Madeleine’s shoes? What did you do? Let me know in the comments below.