This week’s post was inspired by a question I received from a small business owners during an online training.
Is it ever OK to adjust your pricing if a potential client says your price is too high? If so, under what circumstances should you negotiate your price?
The short and sweet answer is no but I do want to present 5 questions to consider if you ever happen to find yourself in this pricing conversation.
First, it’s important to know and have a clearly defined pricing strategy for your business. Let’s look at Ross Dress For Less and Neiman Marcus, for example. Ross is a low cost, discount retailer. Neiman Marcus is a high cost, luxury retailer. Both of them sell clothes, shoes and other accessories but there’s a different product expectation and level of service that customers experience. When it comes to your business, which one are you – Ross or Neiman Marcus?
Now, let’s look at the 5 questions:
- Is someone currently paying the same rate or has someone paid this rate in the past? If you answered yes, then there’s more people just like that who are willing to pay you that same price.
- Is the potential client what you define as an ideal client? If so, see question #3.
- Do you have other products or services that are within the potential client’s budget? If not, is this an opportunity for you to add an additional revenue stream? Remember, people buy when they’re ready so adjusting the price or offering a different product or service may not be the solution.
- Did you highlight success stories, benefits and results?
- Would the potential client be ok with you adjusting your level of service for that lower price? Probably not. All the more reason why adjusting your price is not ideal in this situation. Let your results speak for themselves. There will always be someone that thinks your price is too high but that doesn’t mean it’s up for negotiation. In the case of Neiman Marcus and Ross Dress For Less, they don’t lower their prices just because someone thinks they’re too high. And neither should you.
Want to get clear about what you charge for your products and services? Click here to grab this free price for profit template.