How often have you had a client reject your quote claiming "it's too expensive"? Chances are the comment may not relate to your quote being outside their budget, it may be your client is really saying "it's not worth it" or "I don't perceive the value in that price".
The most simple solution would be to lower your price, however - in doing so - you would also reduce your overall revenue and the profitability of the job. By altering your client's price perception so that the value surpasses its price, you will more easily win your client over and close the sale.
Let's assume that your client already sees value in the work that you do for them generally (which is why they are still your client). The trick is to then convince your client of the value of this particular proposition that you are making. Human nature dictates that people will find a way to pay for things that they value, and not everyone will value your products or services the same.
Here are some ways you can address the dreaded "it's too expensive" response:
Your best tactics in the "perceived value" war need to be actioned BEFORE you create the quote. Firstly you need to take a comprehensive project brief to gain a solid understanding of your client's pain-points, concerns, needs and expected outcomes. If you know what the project is intended to solve, you can sell in your solution with greater ease and confidence. A tailored solution greatly increases the perceived value in your client's eyes.
Secondly, you need to ensure that your quote (and proposed solution) accurately reflects your client's needs from THEIR perspective. If they can't immediately see the correlation, they will find it difficult to see the value.
Thirdly, you should try to determine a client's budget before you begin the quoting and planning process. You can pretty much dodge the "it's too expensive" bullet completely if you are quoting within your client's budget.
Be thankful that you hear the comment "it's too expensive" from time-to-time. If your clients never tell you your pricing is too expensive, it may be because you are too cheap!
Be thankful that you hear the comment "it's too expensive" from time-to-time. If your clients never tell you your pricing is too expensive, it may be because you are too cheap! – Sarah Ritchie
An Account Manager is a sales person (a sometimes-uncomfortable thought, but true). You are selling products and services on a daily basis, just most of the time you're selling to people who already want to buy your wares.
As a sales person you need to be prepared to do some negotiating, and push-back is nothing personal - it's part of the game. As long as you are sure your pricing is fair, justifiable and is hitting your client's brief, then you can enter into a price dialogue with confidence.
Like the song says, you "gotta know when to hold 'em, and know when to fold 'em". Know when to stand your ground, and know when to bend. If you have a good handle on your costs, margins and how to keep your client happy, you'll be just fine!
A modified version of this blog post appeared on the Design Assembly website | 25 September 2014.
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