Managing price integrity
Now that you are charging a healthy, premium price, based on your excellent packaging and presentation, your good quality, your strong public narrative, and the ‘ribbons’ you add to your customers’ experience, you must manage the integrity of your pricing.
Guardianship of your pricing can be tricky, for a number of reasons. We tend to:
- get embarrassed about stating our full price, especially if we were not born into a wealthy family that feels no fear of large numbers;
- feel that we should offer discounts to people we know; and
- assume that potential clients will run away screaming, determined to fling their funds at our cheaper competitors’ feet.
I once had to divorce an abusive client. It was made especially difficult by the fact that she was one of the nicest human beings I’d ever met. She would flirt and sweet-talk her way through our planning meetings, and so utterly dominate the conversation as to allow no opportunity for me to represent myself and discuss fees. It was a sort of bullying niceness.
Sound crazy? She managed it three separate times. More fool me.
I found it incredibly difficult to negotiate my side. And I’m well aware that I am not the only one who has struggled with this dynamic.
Dissecting what happened in retrospect, this is what I observed to be her technique. She would:
- gushingly confirm what wonderful friends we were, and how special our connection was;
- repeatedly compliment me, embellishing upon and amplifying my qualities until I found myself on a politely smiling back foot;
- speak almost non-stop, allowing little to no input from my side, but in a way that was so friendly as not to seem tactical;
- use assumptive closes, such as ‘when you handle this part’, before I had agreed to anything, and then move so far into the planning phase that the discussion about whether we actually would work together was moot;
- not raise the issue of payment at all (which, in fairness, was my responsibility, but the dynamic was so weirdly Twilight Zone that I somehow couldn’t do it and abdicated my own interests); and
- rush off to her next meeting once she had made her points.
In the face of her mix of flirtation and assumption, I allowed this client to manoeuvre me into giving of my services, free of charge, three separate times. The final occasion was on a Friday night, and the whole thing left such a bad taste in my mouth that I vowed never to be abused in the fee department again. I strongly recommend the same for you.
Following a great deal of meditation on this topic, and after consultation with other professionals and entrepreneurs, I offer these guidelines:
- Start with a conscious decision not to be abused on the issue of price and, if it has happened, not to allow it to keep happening.
- Understand that responsibility for your pricing belongs to you. If you manage it, it gets managed. If you don’t …
- If possible, pass it on to a third party (an assistant, agent, etc.), who can represent you more impartially.
- Speak up early and don’t get so far into planning that you’ve bypassed the necessary step of the fee discussion. If it’s an email discussion, state your fee in your first response. If it’s a face-to-face conversation, use phrases like, ‘Before we go on …’
- Don’t be charmed by manipulative people flirting their way to fee-free. Their smiles are a direct threat to your wealth plans. Such people are not your friends. They are harming and intentionally deceiving you.
Absolutely! There are times and places for strategically discounting fees. You might do so for charitable organisations, like churches or the SPCA. Not only is that decent, but it can also create good PR for you.
You might also do so when there is an opportunity inherent in doing the business. You might identify a client who is worth working with at a lower rate, because of the possibility of additional work. This one is up to your good judgement, but do be wary of clients with big budgets who are simply looking for a freebie.
If and when you make the choice to discount, be sure to provide an invoice that states your full, original price, and then specifically states ‘discounted to …’. That way, your original value is clearly stated and known.
What happens if they can’t afford me, but I want to work with them?
Here’s one solution outside of offering discounts: if they cannot meet your fee, ask how they plan to make up the value. That might mean offering you equivalent value in return, by giving you something of equal or similar value that their company makes or sells. Or it might mean the guarantee of more business in future (in which case, represent yourself properly here and get it in writing).
Remember, if they can’t afford you, you are fully entitled to walk away. More often than not, you should do so. If a trade is on the table, the onus to find solutions and offer equivalent value is on them, not on you. You are not a beggar. You are valuable. And you work for money.
Poverty mindset: This is my price … kind of.
Wealth mindset: This is my value, and I honour my value.
Douglas Kruger is a business author and professional speaker. See him in action, or read his articles, at www.douglaskruger.co.za. Douglas’s books, including ‘Is Your Thinking Keeping You Poor? 50 Ways the Rich Think Differently,’ are available at Exclusive Books, Estoril, CNA, and as ebooks from Amazon.com