“In the last month I’ve talked with five potential clients and not one has booked me. I got an email from the last one saying my pricing was just more than they wanted to spend. Do I need to lower my pricing?”
I get an email like this at least once a week. Pricing seems like the first place everyone goes. I get that. It’s scary. However, it is important to understand that a client’s decision points are based on a continuum of quantitative (or objective) and qualitative (or subjective) impressions. Whether you get the business will depend on how much your qualitative impressions skew the quantitative. This is true for all luxury product purchases (and if you’re reading this you sell a luxury - non necessity - product).
Here’s a worthwhile exercise. Take out a piece of paper. (If you’re concerned about the environment turn over a piece you’re already using- you’re only going to use one - it’s worth it - I promise). Draw a two sided arrow horizontally through the middle of the page. On the left side write, “Quant.” On the right side write, “Qual.” Pricing sits at the end of the Quant side, and Art sits at the end of the qual side. Lots of other things sit in between. It may help to think of it as a scale. Draw a triangle underneath it and see it as a balance that you have to influence in order to get the deal.
It is important to understand that the Quant side has a series of things that are related to you and a series of things that are not. You control your pricing and packages. However, you do not control the other factors. These are things like budget, other obligations, etc. related to the event or session, but they are also things like gas prices, consumer confidence, etc. that we hear about on the news and don’t think apply to us - at least directly. All of these things, and their relative impact on your prospect or client are “weights” on the quantitative side of that continuum.
Whether these issues has an impact on your client will depend on two things, one is quantitative and one is qualitative. The quantitative thing is what percentage of a person’s view of their financial capabilities is this event going to cost? Speaking plainly, is the person wealthy and not miserly? If so, then the issues that have an impact on most people are not going to influence them. The weight on that side is not as much of a burden. (Though it is always a mistake to assume it is not a burden at all).
The qualitative measure is essentially the value the client assigns to the various components in your package. Do they like you? Plus one on the qual side. Do they like your samples? Plus one on the qual side. Do you have something in your package that they LOVE that they can’t get anywhere else? Plus two or three on the qual side.
That last one is so important. Even if that ‘thing’ is essentially just the combination of you and your products and their perceived experience, it is the thing that will make the difference between someone making their decision solely on the quantitative aspects of the decision and being willing to throw those away because they simply must ‘have’ you.
There’s an easy way to know if you have a problem with this. If every prospect comes back and wants a discount and the only ones you are signing are the ones you give the discount then you are not establishing enough qualitative reasons why the client should use you. Tomorrow we’ll dig a little deeper into the things you can do on the qualitative side to make a difference. Until then, draw this little diagram for every prospect you’re currently speaking with. Figure out what their weighting is and then see if there are things you can put on the other side of the scale that might drive it in your favor.
Lower your pricing may be necessary, but it should never be your first decision. It is always your last.