When I was first starting out I was approached by the relative of an acquaintance who needed business cards designed. I told him it would cost $90 and explained everything it came with.
His response was, “I have a cousin who can do it for $15.”
I said in reply, “well get him to do it.”
Needless to say it didn’t go anywhere. Now why would I, who actually needed the work, turn it down? Because I know my value. I had become well-experienced in that type of client and knew to stay away.
The dilemma
This poses a legitimate dilemma for us in the service industry. We know our worth and the value of what we bring to the table, but the reality of unpaid bills will hit you sooner or later. The question is when do you call the client’s bluff?
Signs of the bluff—The discount king
Anyone who asks for a discount their first time doing business with you should immediately be rejected. Monetary discounts reduce cash flow and should only be extended to loyal clients. Instead, provide extras in services or warranties since that won’t cost you the same as a monetary discount.
The comparison shopper
Anyone who says someone else can do it for less implying that you should as well needs to be rejected. There’s a difference in them inquiring why you’re more expensive since that gives you opportunity to show value and close a sale. But if they are using someone else’s lower price as a ploy turn it back on them. Most of the time they’ll come back. However, be prepared to lose the sale. This has happened both ways for me. While there are other signs, how do you prepare for these people and actually convert them to clients?
Step 1—Know end-user value
Knowing your service will make the client significantly more than they’re paying you, is one of the most powerful tools at your disposal. Knowing a well-designed business card would bring in way more money than $90 allowed me to not budge. To do this you have to know numbers. If someone asks why you’re more expensive and you say, “because my service will make you ten times more than what you pay me” is extremely effective.
Step 2—Know your process
If the process to deliver higher value costs more than others, you have valid reason to charge more. Bonus points to you if you make that process transparent and accessible to your potential clients because they’ll convince themselves it’s worth it. Then you won’t have that conversation at all.
Step 3—Trust your gut
If you feel like it’s going to be a hassle dealing with a potential client, especially if they’re haggling you over price, then just don’t. Believe me it will cost you more in the long run as you’ll see in my next article two weeks from now.
The ultimate lesson
Not every client is well suited for your business. Learn to identify the ones that won’t be and show greater appreciation for the ones that are. Until next time I wish you much success transforming your business into an amazing brand.
