If you are like many contractors, you put a lot of thought into your pricing. When you are quoting a price, you are not just pulling a number out of the air. You probably based your price on your costs, the time you put in, and the profit you expect.
However, as fair and as justified as your prices seem to you, you continue to encounter price objections nearly every time you quote a job. Dealing effectively with price objections is a necessary business skill and one to develop for your bottom line.
Leave room to adjust, but don’t.
When quoting a price, you usually leave yourself some wiggle room, so the sale does not stall and fall apart because of the number at the bottom of the quote. However, just because there is wiggle room does not mean you should play that card first. The wiggle room is a security blanket. Do not be dependent on it.
If you find yourself discounting most of the deals you close, you may need to revisit your pricing or selling tactics. Be confident and know, in easily expressible and easily understandable terms, why people should buy from you.
Price is probably not the main concern.
To find out if it is, ask. It could be the only hold up, but many times price is only one of several concerns.
Your prospect probably has other concerns if he is balking on price. If you can identify and adequately deal with the other concerns your prospect has, the price issue will become less significant, will play less into your prospects decision-making process, and might even go away entirely.
Price matters most when you’re not getting what you want.
Any price you quote that is not for the work your prospect wants done is going to be too much. That does not mean you should not include add-on and valued-add additions in your quotes. You just have to be prepared to justify their presence and show how they will create a lasting and long-term benefit for what they are trying to accomplish.
Quote prices based on what your prospect wants accomplished – no more, no less.
Discover why they buy.
Unfortunately, not everyone buys for reasonable reasons. People buy emotionally. Nevertheless, you can also appeal to reason by asking good questions throughout the process. This will let you know what benefits of your service you should highlight.
Discounts come off your bottom line.
Remember, if you discount your price, that is money you do not get to keep. Sometimes it is better to walk away from a deal than to discount it so much that you are just creating work for yourself that does not pay.
How do you deal with price objections? Let’s talk about it on Twitter.