I just lost an opportunity that I thought I should have won. After the company informed me that I did not get the gig, I started to question the price I was proposing.
Should I have lowered the price just to land the opportunity?
I thought that maybe I should have asked for less just to get started with this corporation. But we all need to fight this feeling. This is the wrong way to look at a business loss.
When it comes to price, here is the truth. If what you offer is not a commodity, it is never about the price. It’s that you did not show enough value.
There are many examples where customers spend much more for a product or service because it has a higher perceived value: Apple, Harley Davidson and Tumi. These are all elite brands that charge a premium price because of what customers think they deliver. Not a single one of these brands will ever be the cheapest alternative. In fact, the higher a price the customer pays, they more they will try to justify its value.
Many small company owners want to lower their price so at least “they have some customers”. They fear the customer’s rejection, so they take the business at whatever is suggested. Competing on price is a race to the bottom for every company that will only serve to reduce their profit and eventually drive them out of business.
I realized that I lost this opportunity because I did not show them a high enough value for using me, instead of another person. If I had accomplished this, they would have hired me regardless of my price. They would have been able to justify the expense because of the value they would receive from using me to solve their pain.
In order to accomplish this, identify what results the customer is looking for and what the value of that outcome actually is. Find out what pain you are being hired to solve. Explore what their budget is to remedy this pain. Make sure you talk to the decision makers to understand their motivations.
Ask them to suggest their price before you name yours.
Every customer has money to spend on what will give them the most value. Your job is to find them and show them your value.
