August 6, 2016

How to respond to “How do you price your work?”

When a prospect asks for your hourly rate and you tell them that you don’t have one, they’ll usually follow up by asking: 

“How do you price your work?”

In today’s installment of Learn Your Lines, I’ll tell you what to say, and break it down into its component parts.

Here’s what you say:

“I’ll give you a fixed price for the entire project. That way you’ll know prior to making a purchasing decision exactly how much it’s going to cost you. Is that acceptable?”

This answer is a bit nuanced, so let’s break it down line by line:

Line 1: “I’ll give you a fixed price for the entire project.” 

I recommend that you deliver the first sentence verbatim. Just memorize it and practice out loud. 

Line 2: “That way you’ll know prior to making a purchasing decision exactly how much it’s going cost you.”

You can modify the second sentence to suit your personality and speaking style. Just make sure that it’s clear that your price will be a fixed quote, not an estimate. This will make working with you feel less risky than working with competitors who present only estimates.

Line 3: “Is that acceptable?”

A small percentage of organizations have rigid procurement policies that require vendors to provide hourly rates. In the unlikely event that the prospect says, “No, a project price is not acceptable,” then you should say something like:

“Ah, I see. That’s unfortunate. Well... I guess we’re not going to be a good fit. Thank you for your for time.”

What?! Throw away the lead? Yes, chuck ’em. 

Don’t worry, you’re probably not missing out on much of an opportunity. In a situation like this, the odds are good that the person you’re talking to is not the real buyer; true buyers know how to work around rigid policies when the need arises. 

What Next?

The vast majority of the time, your prospect will be open to a fixed project price.

I’ll talk about what to do next in tomorrow’s installment of Learn Your Lines :)



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