A deep and dark confession: I’d prefer to talk about the birds and the bees with my parents than about fees with my clients. Why? I hate talking about money and I’m very good at making every classic mistakes when it comes to the numbers talk – I give things away before anyone asks and I cave almost immediately to requests to lower my fee. The worst part? I do this despite being a teacher of negotiation, despite being dedicated to every need of my client and despite the fact that I’m an otherwise relentless advocate for others.
Given my issue with fees, I’ve done some homework on how to feel talk about fees without feeling like a sleazy money-hungry salesperson. Here are the best tips I’ve gathered – most are from ww.spdru.com as this proved to offer the most practical advice for professionals. I’ll be applying this principles in my life and I’ll let you know how it works out!
Take the Lead
True, fees are an uncomfortable conversation. However, if you make the effort to address it first, you’ll keep control of the conversation and you’ll demonstrate leadership. Raising the fee conversation will also make you appear transparent (and, hopefully, you are!) and will help develop trust between you and the client. Transparency and trust are developed because you’re willing to talk about the tough questions. So convince yourself that you have to speak up or else risk coming off as another “shady” agent, lawyer, consultant or salesperson.
Focus on Services, Not Just Benefits
How often do you hear about the benefits of buying a service and not what the service actually offers? “Work with me and you’ll get a better deal!” “I’ll make you more money!” This claims ring hollow and always ring a warning bell of b$%&! So, why are you telling your prospects the same route claims?
Just like you, prospects want to know what you’re going to specifically do to get the intended result. Listing all of your services not only instills trust, but also increases your value in the eyes of the prospect. Why? Because you’re reminding them of all of the work you’re doing – attaining the outcome no longer looks as easy as they thought it’d be, making your services necessary, clear and actionable.
Bonus: listing your services will help if the prospect tries to negotiate down your fee. For example, let’s say you wash cars for $200. The client wants $50 off. Without understanding your services or breaking the work down into components, you” likely just say “okay” and provide the same value for less money. Alternatively, you say “no way” and the client walks. In the former scenario, you lose because you created an imbalance between the value delivered and the price. You also taught the client that the price listed doesn’t truly correspond with the value delivered. In the latter situation, you just gave up a client!
Contrast the above outcomes with the scenario in which you’ve listed the items that support the overall service. You’re now in a better position to negotiate. Why? Because you can easily use the coveted negotiation rule of never giving something up without asking for something in return. For example, you may offer a $50 discount, but only if you wash the windows and exterior, as opposed to washing the windows, tires and exterior of the car. Your offer may be exactly what the client wants, as not all clients need the same level of support. What is more, this approach works because it reinforces the value you’re offering and because it shows flexibility…a rare quality that is much appreciated by consumers.
Benchmark Your Fees with Others
I know exactly what you’re thinking: “Are you nuts? My fees are higher so they’ll go to my competitor!” Wrong. First time buyers or users of your service are likely shopping around for pricing. They want to know if you’re fair and they’re likely unable to obtain the information they need to compare apples to apples. In other words, your competitor may be cheaper, but that’s because he’s offering fewer services or because he has less experience. By being upfront and benchmarking your prices, the prospect is less likely to search others out and make a “false” comparison. Furthermore, you’ll instil trust with your client and show that you’re willing to go above and beyond. After all, you’ve already done the work for them of finding competitors and determining the best price for value.
Word of caution: when you benchmark, make sure you’ve also listed all of your services to demonstrate the value and services they’re receiving. If you don’t, benchmarking will make it appear that your prices are arbitrary and negotiable.
Put it in Writing
Well, this is just obvious as to why. So, do it. And good luck!