Working in professional services (in my case – Software), I’ve sometimes heard the dreaded words “Sorry Mark – we’ve found a cheaper option“.
If you hear this too, don’t immediately retreat. Pause and consider whether the client really understands the expected benefits that your offering will yield for them.
Remember, whilst your costs might be larger than the competition, your offering might deliver much greater benefit:
Do NOT assume that your client has a clear view of the benefits
I used to assume that clients would care about and know how to calculate their own ROI (Return on Investment). This is often NOT the case. I was once sat with a client in a pre-sale situation, and he admitted that he wanted the project to happen, but didn’t know whether the budget would be forthcoming from his HQ. I suggested we do an ROI spread sheet there and then. Not rocket science, just asking him “how many hours do people spend doing xyz”, “what percentage could we save” “What if we multiplied that across Europe” , etc.., and a rock solid financial case appeared before our eyes. I got the work.. and thankfully, he got the expected benefits.
This is your Pilot speaking
Can you run some sort of Pilot project?. Is there a way to demonstrate the value your offering can deliver at a much reduced cost, hence proving the case ?
It’s a bit like the freebie cheese on sticks you might find a smiling supermarket person tempting you with. In my industry , and perhaps yours too, the initial taste might not exactly be “free”, but the experience is much less fraught with risk for the prospect. Small decisions can become “No Brainers”. (Large ones can feel like career decisions).
Slice of the Action
If you have confidence in your offering, but your client is hesitant, consider changing the pricing, so you get a share of the return. Remember to balance the risk (and if possible, cover your base costs), but if you are totally convinced in the value you can deliver, it might give you a larger gain in the long run.
Because your worth it
So when you hit price resistance, relax, and remember … you are worth it, and what’s more you can potentially help the client see that.