3 Advanced Pricing Strategies
By Emily Ruth Cohen
If you are having difficulty getting clients to agree to a final price, here are three strategies that may help you when negotiating and presenting your fees:>
- Be Confident – If you show fear in your verbal or written communications, clients will feed off this fear. Be confident in your prices. Using numbers like $12,750 shows a lack of confidence and uncertainty and leaves room for negotiation. Rather, $13,000 is a stronger more solid price. Instead of saying “I think the budget will be,” be firmer and more confident and say “the fee for this project is…”
- Do not use price ranges – Executives want to hire experts that know the right answer or solution to their challenge. If you give the client too many options, you are essentially devaluing their perception of your “expertise.” Thus, when pricing, avoid price ranges entirely. If your prices may differ because of a variable factor, then give a flat fee for each possible factor. For example a 16 page plus cover brochure will be $X, while 32 page plus cover brochure will be $X.
- Avoid the Chinese-menu approach – When working with a client that does not know what they need, creatives immediately price everything including the kitchen sink. Creatives do this with the best intention. They think this long list of options will show the diversity of their services and the scope of their expertise (“we are experts in your industry and, based on this expertise, we recommend X, Y & Z”). But, this approach often times has the opposite effect. Providing a long list of components and prices can be overwhelming to a client and often leads them to freeze on their decision. Instead, price a phase 1 discovery and research phase, where the end deliverable is a solid, more thoughtful (and strategic) recommendation (in the form of a written document like a brand brief, creative brief, or communications plan). If the client insists on a bottom line number, then you can refer them to past prices from comparable projects in your portfolio as potential options. So, for example, a restaurant that only required a logo, three menus, an entranceway sign, and a simple website versus another restaurant that included more menus, signs, environmental graphics, and a more robust site. The client can then respond to the situation they may feel most comfortable with and use those fees to help plan their future budget. However, the final price for their particular project will still be negotiated at the end of phase 1. Essentially, your goal (and value) is to make recommendations that are both strategic and which appropriately leverage your clients’ budgets.
This article was written and reprinted with the permission of Emily Ruth Cohen. A brutally honest consultant, Emily conducts strategic business planning retreats and provides confidential, best-practice insights and advice on staff, client, and process-management strategies. Learn more at www.emilycohen.com