Here's the situation: it's the first, maybe second, serious conversation with a prospect. You're asking questions, you're building great rapport, you're uncovering a slew of needs, and you're already seeing how you can help this prospect in 10 different ways. The conversation is going great. That is until the prospect says, "Wow, this all sounds good. So, what's something like this going to cost?"
You freeze up. Your heart starts beating fast. Your hands begin to sweat. Your mouth goes dry.
You know you don't have quite enough information to determine the exact solution or where you'd recommend starting. You know you don't yet have enough trust built at this point in the relationship to introduce fees. And you know the prospect does not yet see the full value of your services. Yet you feel obligated to respond to their request, and you throw a number out hoping it doesn't knock them off their seat.
Stop right there.
If a client or prospect asks about the price and they do not yet fully understand the value of your services, don't give them one. If you quote a price too early, you lose control of the conversation. From here forward all conversations will focus around price when you want them to focus around value.
What Do You Say?
Buying professional services is an investment, and it is your job to convince clients and prospects that investing in you and your services will produce good ROI. This is done by communicating the value of your services and keeping the conversation focused around this value.
When the prospect asks, "How much does it cost?" and you're not ready to share that with them, here are a four ways to respond:
1. Offer a range in price
We all sell complex services; however, some of our services are more complex than others. For a fairly straightforward service delivery, it is acceptable to provide a price range. You don't want to make the range too large or it won't mean anything, plus the prospect will remember only the lower end. You also don't want to provide such a narrow range that you back yourself into a corner.
A good way to frame it is like this: "While it does depend on the exact deliverables we decide upon, it generally ranges between $35,000 and $45,000."
When to use this tactic: This tactic works very well when you (1) have a sense of the budget the prospect has (and it falls within your range), (2) have a fairly straightforward service you are discussing that you've delivered profitably for other clients within this range, or (3) want to weed out the tire kickers and prospects that have little or no budgets.
2. "It depends"
This is every consultant's favorite phrase, and it works very well in this situation. Best of all, it's the truth. Early in a conversation we often don't know what it's going to cost. Answer the question with, "It isn't one size fits all. It really depends on a number of factors, and I'm afraid I don't know enough yet to determine where we can really add the most value. Do you mind if I ask you a few more questions that will help me better understand your situation and what you're looking to do?"
Even though you don't answer the question directly, you help build rapport and trust. It opens up the conversation and allows you to start asking more in-depth questions that get to the root of their needs and focus around the value you can provide.
When to use this tactic: Anytime when you haven't touched upon the full value of your services. If the prospect has not articulated the value, it will be an uphill battle if you give a price too early.
3. Present your fees next to expected returns
This changes the conversation from being about a "cost" to being about an "investment." It works best when you get the prospect to articulate the expected returns. Questioning skills are very important to facilitate this information out of your prospect. For example, you may ask a line of questions such as this:
- "What are you currently spending on this process?" Pause and let the prospect answer.
- "How much time and resources do you think you'd save if we implemented these three recommendations we're talking about?" Even if the prospect can't answer this question, it's OK. You are just setting yourself up.
- "The costs you reference are in line with what we typically see in our clients businesses before we start working with them. Through our X, Y, Z service we typically save our clients $200,000 - $300,000 in costs just by making the process more efficient. For example, we were working with one client last month in your industry..." Now you can go ahead and present your price in the context of the typical savings.
The key here is to make your service and the results you can achieve tangible. If you can tie it back to something financial—a decrease in cost, increase in revenue, or increase in profitability—you are focusing on the value and positioning your services as an investment.
When to use this tactic: Use this tactic whenever possible-in conversations and in proposals. It works well with the other tactics here and reinforces the value of the investment.
4. Ask the question back
When you think the prospect has a good sense of what they're willing to spend on your service, consider asking the question back to them.
For example, "I know that you've been doing research on this and speaking with some other companies that offer similar services. What do you expect something like this to cost?"
This tactic works well to get a sense of whether you are in the same ballpark. Avoid the "what's your budget" question, as often there is no budget for the types of complex services we offer, and if you're talking to the right decision maker, she'll have the authority to make her own budget.
When to use this tactic: This tactic works best if you know you are in a competitive situation and if you know the prospect has done a lot of research.
When considering any of these tactics, you need to use your own judgment based on the situation and the individual you are speaking with. Asking the question back can make you come across as a "know it all." "It depends" can be perceived as you hiding something. Gauge your audience before you respond.
Most important, when some asks, "How much does it cost?" remember you don't need to jump to answer the question. Be prepared and keep control of the conversation by focusing on the value you provide and the results you can help the prospect achieve.
How do you answer the question: "How much does it cost?"