I will portray a common scenario from our everyday life which will throw light on the “You are too expensive!” situation and will let you easily digest what I am about to say.
Imagine This –
You visit an open vegetable market. There you witness hundreds of hawkers selling their vegetables. Now as there is huge competition in the market, you will try to get the best value for your money in terms of fresh healthy vegetables. So you will now bargain with the vendors due to the prevailing fact that you can always buy vegetables from other available options in your hand. Now the basic tactic of bargaining will start by saying – “Hey! You are too expensive. Others are offering the same product at a lower cost.”
Now there are three options available to you:
1) Give him the product or service at or near the cost he is expecting.
2) Directly say No! and lose the customer forever.
3) Use your presence of mind and explain why your product is best in the market and offers the best value for money.
Option 1 will surely increase your customer growth rate and sales but it will put you in a suffocating rat race with the other vegetable sellers.
Option 2 will make your conversion rate or customer growth rate decline.
Option 3 will make you better profits, provide the right value of your product and in the long run it will help you establish your own parallel personal brand in spite of the competitiveness of the market.
So today’s tip straight from Spider’s mouth is
Treat yourself as a Brand from the first Day.
Follow this and in the long run, your achievements will soon become grand. (That sounded so poetic :p)
A regular client chat goes on like this:
You will find a potential client and start webbing them around your net by answering their questions and convincingly working through their fears around the question “What if things don’t work around as you said”.
All goes great every time but the dishes fall when they ask you the price and
You quote a rate.
They hear the rate.
They take a moment and reply “Oh my gosh! You are too expensive!”
Most of us can sell our services or products to anyone with ultimate dedication until someone ask about the price. This moment makes even the most experienced person commit some common mistakes which drive the potential client away from you.
Common mistakes which most of us commit on hearing
“You are too expensive.”
Mistake #1 – You lower your price immediately
Never ever do this. Doing this will let your client believe that they can negotiate the price even lower than they started out with. Also, this makes your client think that you are desperate enough to get the project.
Mistake #2 – You let them go
You just say No, I can’t help you in that price and stop responding them. This act doesn’t justify your behavior towards the client because both you and client invested the same amount of time to find and convince each other to crack a deal. So you must respect that and at least give them a proper justification why you can’t accept the deal made by them.
Mistake #3 – You refer them to someone else
You already did 80% of the work by converting your lead into a potential customer. Just by referring your client to someone else you have wasted your time and energy and you also lost all the referrals you might have got from the client in the future.
Mistake #4 – You get angry
You need to understand everyone wants a great value for their money so being negotiable is not at all criminal. It’s your job to understand why your client thinks that you are expensive.
So here are the tips on “What to say when client says “You are too expensive.”
Note: You can just copy paste the templates which I provide and tweak for the type of client you are dealing with.
Ask them just one single question:
“Really! Is it too Expensive, compared to what?”
That’s it. Asking this one single question can shift the gravity of the negotiation in your favour.
Why? Because the client has to give a justification of the statement ‘why you are too expensive?’
And as you were already near to making the sale when the issue of the price arrived, you now just need to overcome four possible mental barriers stopping you to make the sale.
1. The client is trying to justify the purchase to themselves.
2. The client isn’t aware of the cost genuinely as they are new to this.
3. The client is comparing you to someone else.
4. The client isn’t interested in buying and is using “You are too expensive” statement
as an excuse to buy time.
From their reply to your question, you can easily judge under which category do they fall and then overcome the hurdles by following the strategies given below:
Justification of the purchase:
When the reply hints that they are trying to justify the sale to themselves, then let them continue and once they are halfway through, remind them why they contacted you in the first place and the value you can provide through your product or service. You just have to stress on the pain point after they are halfway through their justification.
Unaware of the cost:
Pin point the emotional problems you solve through your product and service. You can also provide a fair comparison that they can relate to, for example, a 500 dollar yearly subscription can be reframed as costing less than their daily cappuccino at The Starbucks. Compare it to a common thing in which they must be in a habit of paying so that they see it in context.
Comparing You to a Cheaper Option:
Know why you are awesome and pinpoint it in your justification and the pain your service will alleviate. For example, if Xyz provides the service 200$ less than you, then remind them why Xyz won’t be able to solve all their problems and what part will they be missing out. They will ponder and soon realize the value you will be provided.
Not Ready to Buy:
If their reply hints that they are not interested to buy now then come up with now or never offer or discount which they will lose if they don’t buy your service now. You can also remind them how will they feel after their problem is solved, for example, if you provide digital marketing services, tell them “Our average customers gain 3000+ leads from us in a month so you can imagine how much customers you can gain by the end of the month if you start today.”
This statement will shift the sale from a seller-trying-to-convince-buyer to buyer-trying-to-convince-themselves situation.
Even if they didn’t buy from you now (which is less probable if you use the above tactics smartly), they will surely come back later on because they have subconsciously convinced themselves that you are the right seller to buy from.
Who says negotiating is tough to crack?
Some common phrases used in between conversation to shift the gravity towards your side:
Email Scripts You can use to reply to your clients:
Option One – Tell them why you are awesome
I understand that this is a large investment to make, but I assure you that you will receive a top notch service which you won’t be provided by any low-cost alternative. My clients have been satisfied with the results I provide such as _____ and ____ because I provide with a service perfectly designed to work for your service and brand. My service doesn’t end with just the delivery of the product but my service will help you achieve your goals.
If lack of funds is the problem right now, I understand. Please keep me on your books for the future. If you are willing to invest at this moment, let me know and I will guide you through the next steps.
Why this script works –
You acknowledge your cost, but you explain that you are skilled and qualified enough to ask for the quoted price by giving references of your past clients. You give them a option to walk away, but you stand firm on your price, shifting the gravity towards you.
Option Two – Offer a Little Less
I understand that this is a large investment to make altogether, so working with your budget I have come up with a feasible option. You will still get a fantastic output, I will just remove some add-ons for now, so that we can stay on the budget. Right now we will stick to the main goals of your service to create something that meets your goals. In this case, I have removed_______ so we can include_______ which is what will drive to meet the end goals. If you want to add those extra add-ons down the road, we can assist you in another project to do just that!
Why this script works-
You acknowledge the quoted price, but don’t back down on your cost, instead, you offer the same great results in a lower price with less amount of features, which provides the near about value the client needs. For example, if your client wants custom made theme for his own website but you can provide the same with a pre-made template in a lower price which will deliver the same look and functionality the client needs.
You are too cheap if you never heard your client say that “You are too expensive!”
I would like to add on an important analogy. If you observe that you hear the phrase “You are too expensive!” too often then it’s time you ask yourselves these questions.
- Is your marketing justify how expensive your services are?
- Is your marketing targeting the right people?
- Is your service really worth the price?
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