Sales negotiation can be a high-stress experience and many sellers feel daunted when they hear “you’re too expensive” from a potential client, afraid to lose new customers for their practice. An increasingly competitive market pressures sellers to lower prices. Sales negotiation workshops offer strategies to improve your negotiation skills, so that you will keep earning increasing amounts in your practice, despite customers’ downward price pressures.
One key strategy named in negotiation seminars is to consistently up your rates (and therefore, your earnings). This should be at each phase of your practice’s growth to reflect your growing experience and the practice’s increasing success. If you follow this strategy, you’re likely to hear moans of “you’re too expensive” many times along the way from a few usual suspects. These tips will allow you to prevent and respond to this comment proactively. This will give you yet another opportunity to negotiate a sale.
Know the market, the client, and the unique value you offer
As you learn in negotiations trainings, research is key whenever you negotiate. Negotiating pricing for your services is no different. It’s important to have the necessary information to name market prices, what sets you apart in that market, and why your services are important for this client in particular.
First, dive into market research to find out what others in your field who offer similar services in your area charge their clients. This will help you set a reasonable initial price range. Then, think about what sets you apart in that field. By identifying your niche and naming why that specialization brings extra value, you demonstrate that your higher price makes sense. Lastly, know about your client’s needs. Be able to tell them why your specific mix of experience and specialization are key to getting them towards their goals.
If you’ve done your research before the sales negotiation and train yourself to communicate your value added, a “you’re too expensive” objection will actually offer you a unique opportunity to market your services. As a seller, you will be able to tell the client why your specialization will make a real difference for them.
Communicate your price and your value early on
Naming your price point up front can save time and energy. Clients who are only looking for the lowest price, with little interest in the experience you bring, will be on their way quickly. While this may feel hard to accept, it will help save you both time and frustration. There are relatively few people who make decisions about what practice they will use based on cost alone. That means it’s better to lose one potential client that only wants to pay cut-rate prices than to consistently undervalue yourself.
With most potential clients, if you name your price early on and make sure to use every engagement to talk about how your service will help them move towards their goals, buyers will understand what you bring and you’ll be more likely to negotiate a sale. A person looking for quality and class will know they need to pay for it. Your ability to communicate your value lets you show them how a little higher cost now will reap dividends for them in the future.
Listen to what the client tells you about their negotiating position
Your knowledge of the field, your value, and your client’s needs puts you in a strong position to negotiate a sale. You can find out just how strong that position is by listening to your client’s ask. If the buyer only wants to know if they can get a discount or are trying to stay in a specific dollar range, you’re in a strong position to say that their proposal is too low for what you have to offer and to convince them that your added value makes the price difference worth it. However, if a customer comes to the table with negotiations training, having done their own research, and showing you that they have found three other practitioners who offer the same skills and experience at a fraction of the cost, you may have to adjust your bargaining position. While this may be tough in the moment, listening to a client who knows the market well gives you valuable data for future pricing negotiations.
In a pricing negotiation, both parties may need to have some give. If a client recognizes the value of your work and has already offered to go above the price they planned on, but cannot quite meet your proposed cost you have room to make adjustments on what you offer to make the sale. Let the buyer know you understand the position they’re in and create a new package that fits within their budget limits.
Make sure your compromise is on quantity and not quality. Hone in on which of the client’s requests are most vital to their success and offer them a reduced package that still provides solutions. This will help build trust in your service. Through the interaction, you’ll still get fairly paid for your services and you’ll impress them with your ability to find solutions, which can pave the way for a higher lifetime customer value in the future.
If you are making the most of your growing experience and industry know-how, any negotiation training or seller course will tell you that your prices and earnings will go up year after year. These sales negotiating tips will let you turn a “you’re too expensive” into yet another chance to demonstrate your value and to negotiate a price point that works for you.
Simon Beaufort is the resident editor at The Negotiation Experts, with more than five years of experience. Simon has a master’s degree in writing and has been creating and editing online content ever since. He is passionate about clear messaging, helping business professionals continue learning, and the Oxford comma. Simon also loves to write in his free time. A member of a creative writing club, Simon and his friends have authored several science fiction novels, which they hope to one day have published.