Difficult pricing discussions: Your client is surprised by the final project invoice. You knew this pricing discussion was coming but didn’t know how to talk about it earlier. Or like many self-employed people, you have always found it difficult to discuss your fees. You change prices depending on how you think the client will react.
Your feelings have no place in pricing discussions. Not a useful mix.
Common problem areas and solutions
Start with proposals and estimates
List what’s excluded, not only what’s included. When you don’t do this, your client will be legitimately surprised when you raise the “new” costs.
Be up front and all money conversations from then on can reference your earlier, crystal clear communications.
Estimate prices with a range, not an exact dollar. Human nature is to register the lowest price heard.
Be realistic, not optimistic because that perfect scenario rarely happens, right?
What to say when the client requests a change
You want a happy, reference-able client, so every time you say “yes,” also mention that you’ll need to update time and/or cost. Your role is educate and ensure understanding so they can make informed choices.
If you ignore the time/cost estimate when the change request is voiced, then it’s another surprise for your client. Remember how that feels, if it’s happened to you. And if you manage to get paid, what happens to the reference possibility? If you eat the cost, what happens to your profit? And the price you can charge next time? It sets off a chain of problems to solve.
Addressing the client who isn’t paying
Lean into the conversation. Set followup reminders to help yourself get it discussed and resolved.
Start with basics: Did the invoice arrive? Did it get reviewed? What questions are there? Anything different from expected, which is causing a delay? When did he/she want to wrap up payment?
If you let this go once, it becomes an acceptable way to do business. Think about the lost time and how you’ll feel not being paid for doing your excellent work.
Quoting prices, without emotions
You really want to work with this client or this exciting project. You think budget might be a problem based on her story. Stop. If you start down this road, you’ll never get on the right route. Every single client will need something different. How will you keep track? How will you ever raise prices? Every single decision becomes difficult, time consuming, gut wrenching. It’s not necessary.
No matter how small your business is, create a rates sheet. Think about pricing without thinking about clients. When you speak with a client or prospective client, have the rates sheet in front of you to keep yourself honest. This will take out most of the angst and uncertainty during the conversation. And the frustration you’ll feel later on if you don’t do what’s right for you and your business first. You are here to serve, and at the same time, serve in the best possible ways. Compassion, with boundaries. (Identified pro bono work is an exception, but set some limits.)
Pricing discussions: What they’re REALLY about
The pricing discussion is not often about money. Money is the mask.
- It’s about perceived value and trust in you. And that’s why these conversations are inherently difficult…. especially if you are your sole employee.
- Pricing discussions are also about each client’s relationship with their money. And it is often different to each person in a couple. Whether you’re meeting with a couple or only one of them, they are on their own discussing whether to spend their hard-earned dollars with you.
- It’s about the client’s priorities. Where they choose to spend their money is as much in the equation for many services/products as is affordability and budget.
- Finally, pricing discussions are also about your lifelong relationship with your money.
With all that happening below the surface, doesn’t it make sense to lean in, be crystal clear and honest up front? Give yourself the best shot at having an open conversation.
It is courageous and rewarding when you begin to focus on clear pricing communications with clients.
Talking about money with clients is one of the best ways to grow yourself, develop stronger communication skills and understand your own relationship to money.
p.s. If you’re not sure how to organize yourself and your thoughts to have these sorts of client discussions, consider working with me on that. Email me: Sue@CoachSueWest.com or call me at 603.554.1948.
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All images – Pixabay.com