“Too expensive.” “Over-priced.” “A bit rich.”
They all mean the same thing.
When you say that something’s too expensive, you’re doing much more than commenting on a price. You’re questioning the explicit or implicit value of a product or a service. You’re asking, “Will I get out of it what you want me to pay for it?” You’re questioning the competency, judgement and possibly even integrity of the individual or company that gave you that price, even though you don’t realise it. You might not be saying it explicitly, but what you’re implying is, “Have you made a mistake?”, “Am I getting the best deal?”, “Are you being honest with me?”, “Could I get this cheaper?”
Finally, you’re being dishonest, because deep down you know all too well that there’s no such thing as too expensive.
Why?
It doesn’t matter what you’re questioning the price of. It could be a product, a service or the cost of an hour, day or week of someone’s time. Whatever you’re buying, too expensive is always an excuse. Saying it shifts acceptability of a price back to the person who gave it. What you should say, but are too afraid to admit, is:
- “It’s more money than I wanted to pay.”
- “It’s more than I estimated it would cost.”
- “It’s more than I can afford.”
Everyone who’s given a price for a product or service will have been told at some point that it’s too expensive. It’s never comfortable to hear that. Thoughts come thick and fast: “What do I do?” “How do I react?” “Do I really want the business?” “Am I prepared to negotiate?” “How much am I willing to compromise?”
It’s easy to be defensive when someone questions a price, but before you react, stay calm and remember that if someone says what you’re offering is too expensive, they’re saying more about themselves and their situation than they are about your price. Learn to read that situation and how to follow up with the right questions.
Imagine you’ve quoted someone for a week of your time. “That’s too expensive,” they respond. How should you handle that? Think about what they might otherwise be saying.
“It’s more money than I want to pay” may mean that they don’t understand the value of your service. How could you respond?
Start by asking what similar projects they’ve worked on and the type of people they worked with. Find out what they paid and what they got for their money, because it’s possible what you offer is different from what they had before. Ask if they saw a return on that previous investment. Maybe their problem isn’t with your headline price, but the value they think they’ll receive. Put the emphasis on value and shift the conversation to what they’ll gain, rather than what they’ll spend.
It’s also possible they can’t distinguish your service from those of your competitors, so now would be a great time to explain the differences. Do you work faster? Explain how that could help them launch faster, get customers faster, make money faster. Do you include more? Emphasise that, and how unique the experience of working with you will be.
“It’s more than I estimated it would cost” could mean that your customer hasn’t done their research properly. You’d never suggest that to them, of course, but you should ask how they’ve arrived at their estimate. Did they base it on work they’ve purchased previously? How long ago was that? Does it come from comparable work or from a different sector?
Help your customer by explaining how you arrived at your estimate. Break down each element and while you’re doing that, emphasise the parts of your process that you know will appeal to them. If you know that they’ve had difficulty with something in the past, explain how your approach will benefit them. People almost always value a positive experience more than the money they’ll save.
“It’s more than I can afford” could mean they can’t afford what you offer at all, but it could also mean they can’t afford it right now or all at once. So ask if they could afford what you’re asking if they spread payment over a longer period? Ask, “Would that mean you’ll give me the business?”
It’s possible they’re asking for too much for what they can afford to pay. Will they compromise? Can you reach an agreement on something less? Ask, “If we can agree what’s in and what’s out, will you give me the business?”
What can they afford? When you know, you’re in a good position to decide if the deal makes good business sense, for both of you. Ask, “If I can match that price, will you give me the business?”
There’s no such thing as “a bit rich”, only ways for you to get to know your customer better. There’s no such thing as “over-priced”, only opportunities for you to explain yourself better. You should relish those opportunities. There’s really also no such thing as “too expensive”, just ways to set the tone for your relationship and help you develop that relationship to a point where money will be less of a deciding factor.
Unfinished Business
Join me and my co-host Anna Debenham next year for Unfinished Business, a new discussion show about the business end of working in web, design and creative industries.
Comments
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23/12/2012
Great advice Andy.
I often find when dealing with services that there is either no room for negotiation on price – its what it is – or that the price is adjusted due to the Brand I work for – assumption being that the company can afford more.
Key factors here are ensuring I deal with the person who can negotiate the price – and that normally means, as you have said, telling me what I will get for the price – most sales people can’t do that.
As for selling my services – i always remember that its about selling my experience.
I liked the loose reference to apes in the title…
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23/12/2012
Really nice article. As a project manager this sort of topic appeals to me and it’s nice to see it here.
For a split second I thought this was going to be a ‘shut up and pay me for my world class services, I’m worth it’ toned article – but damn it, I hate being wrong!
It had me thinking back to when clients have uttered these reactions to quotes and people around me have reacted negatively, sneering at the client, laughing at what their idea of a “fair price” is etc.
You know what, in my earlier days I did this also, but it never felt good, in fact I cringe thinking about it now.
With just a little twist on how to take a client’s response and react to it can make all the difference in that sales process and client relationship… and to me, that’s as valuable a skill in this business as any design or development ones.
Wise words Mr. Clarke.
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02/01/2013
Now this is a helpful article, and I will definitely be taking these points on board when dealing with clients in future.
I have always believed that it’s a sound idea to educate the clients as much as possible, explaining the advantages compared to the cost.
The only downside is that some clients simply just can not see past the price tag. There has been a number of occasions where, despite my best efforts to explain what they will be getting, they keep referring back to the price quoted on a budget site. You can explain the technology, SEO benefits etc, but sometimes, its all just a matter of price with some people.
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07/01/2013
Great read, thank you!
I’m a relatively new small web shop owner and I work with low budget small businesses. I wish they would just tell me their budget and I could tell them what I can deliver that will be best for them.
Do you recommend this approach? Any thoughts on what is the best way to get a hard number out of a potential client about what their budget really is?
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10/01/2013
Spot on Andy.
More often than not when someone objects to a price its because there is a misunderstanding either on your end or theirs. You’ve done your homework, you know what price the market will bear, so any objections are in fact based on a failure in communication.
Rather than faulting either side the prudent thing to do is to ask some questions and find out where this misunderstanding is coming from. The more effectively we communicate with our clients the happier both sides will be during all stages of the project.
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04/01/2013
This is an issue that we run into every so often. We send out quotes, that are rather reasonable for the services and quality that our company provides, most of the time client are fine with our prices. But like I said every so often we have someone look at us speechless, and say “that’s just to much”
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24/12/2012
Nice read, thanks.
I’ve to admit that I’ve hardly asked myself those three questions. So, I should do, and see if I can improve my negotiation skill.
But I would also add that necessarily time invested in explaining a client the “what and how” is time well invested. Some aren’t just good clients and those ones better do not get them aboard. Just move on.
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23/12/2012
Nice little read on a Sunday morning.
I know this isn’t what this article is about but preceeding giving them a hard quote / price giving them a ballpark figure or some indicator is a good idea. Little point in making out a quote for 5k if there are looking to spend £500.
It wasn’t that long ago i had someone balk at the price of 4 figures.. He was expecting a site for… drum roll ‘£50’. This was in a bar late at night mind you, but bewildering and amusing.
Looking forward to this monkey business, whatever it is. [off to google]
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