Recently I attended a seminar given by the owner of a not-for-profit organization that sells refurbished medical equipment to people who would otherwise not be able to afford that equipment. Even though the prices are exceptionally reasonable and affordable, there are those who want to haggle for a lower price. The owner will then say to them “what kind of car do you drive, then I will tell you whether or not I can give you a better deal”.

This made me think about business owners who are in business to make a profit. Pricing is dictated by overhead expenses including accounting fees, advertising, insurance, interest, legal fees, labour costs, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.

If you are someone who knows me well, you’ll know that I repeatedly beat the drum that “price only matters in the absence of value”.

So, what do you do when a client asks for a “better deal”? Now, we have to assume that you’ve already taken the time to fully understand the needs of your prospect, that you’ve aligned your product or service offering (the solution) to their needs and that you’ve created value. When you are asked your price or fee, answer, “My price/fee is . . .” Then be quiet and wait. Let the prospect speak next. Sometimes you might want to justify your price/fee or lower it but, just remain silent. Silence is powerful. If they fall off the chair and say “Wow”, respond with, “I’ve been advised to raise it.” I want to re-iterate, if you know your value and are articulating and demonstrating that value for your prospects, then the price issue dissipates quickly. If you are being regularly challenged regarding price, I would ask you to evaluate why that is. Remember this as well: just because YOU think your product or service has a certain value doesn’t mean that your prospect does. Is the prospect truly understanding your value - from THEIR perspective?

If they say it is way out of their range, respond with “What is your range?” Then ask who they’ve perform do similar work before. Were they satisfied with that company? If not, why not? Then follow with, “What do I need to do to satisfy you?”

If you are asking for $1000 and they are offering $100, clearly there is no middle ground. If they had $700 in mind, then you could suggest $850 for a modified service or product. Or you could suggest another company you know that could meet their budget. Offer it as an alternative – without being arrogant. Recognize that not everyone can afford your rates or your products. By offering an alternative you are leaving the door open for the day that they may be able to afford you.

It hurts to turn down business, but more often it pays off in the long run. Don’t try to justify the price/fee you’ve stated by calling it “regular,” “corporate,” “standard,” “list,” etc., unless you are purposely making it easy for them to negotiate you down. If you set your price/fee - set it. You might negotiate; everything is negotiable, but never give something for nothing. If you automatically lower your price or fee, they will come to know you for not being worth your full price/fee. You have shown them that you don’t believe in the worth of your own product or service.

If you need to lower your price/fee, look for justifiable reasons, e.g. bulk orders, repeat business, reciprocal business, anniversary specials, slow period incentive discounts and more. Make sure your invoice makes note of the special reason for a discount; it reminds the customer of the great deal they got this time, and that it is not your standard price/fee.

If you provide a service of value without charging for it, make sure the client is reminded of the value they received. Provide an invoice with the notation of the value of the service and a note that says, “provided at no charge”. When customers receive a good deal from you, make sure they are reminded of how great it was.

Know your products’ worth; know your services’ worth and show your confidence in what you have to offer. Being in business is not for the weak of heart. Show pride in yourself, your product and your service and know that the price is right.