Double Dutch

How much do you charge for your services? What determines your asking price? If you charge too much, you run the risk of losing the job. If you’re selling yourself cheap, you look like an amateur. Here are 10 ways to win the bidding war.

“Do these cookies taste as good as they look?” asked our friendly neighbor.

“Even better,” said my almost 8-year old daughter with a big smile on her face.  “I baked them myself this morning!”

Last week, she went door-to-door to raise money for our Walk MS team. She’s a much better fund-raiser than her father, who’s still hoping to do better with his “Giving a Voice to MS” campaign.

“How much are they?” the neighbor wanted to know.

“You can get two cookies for a dollar,” answered my daughter. A moment later, she had four shiny quarters in her hand.

“Fantastic,” I said. “I’m so proud of you! You just made your first dollar. Now, do you want to know a little secret to raising some serious money?” She was all ears.

“Next time someone asks you how much your Snickerdoodles cost, tell them:

‘You can give as much as you want’. Then you just wait… and see what happens.”

“But what if they only want to pay fifty cents?” my daughter asked.

“Well,” I said. “You’ll have to tell them that they have to give at least one dollar. Always know your bottom line. If they don’t think they’re worth that much, there are plenty of other people to sell them to. It’s okay to walk away from a bad deal.”

THE WILD, WILD WEST
In the unregulated world of freelancing, putting a price on a product or service is one of the most talked about and controversial topics. Why?

Copywriters know all about crafting compelling copy; web designers are great at creating sticky sites, and voice-over actors can sound like they know what they’re talking about, even if they don’t.

Here’s the problem: just because you’re good at what you do, doesn’t mean you know how to sell yourself. If anything, you’re probably selling yourself short and you’re leaving a lot of money on the table.

How many schools or vocational training programs are actually teaching business 101, sales techniques or negotiation skills? With a diploma in hand, many graduates discover that it’s a jungle out there, and the only way to learn is by trial and error. That’s an expensive strategy.

In my last article, I talked about the consequences of predatory pricing and about why low rates are bad for business. The next question is: how can you make sure you get a decent price for your product or service? Let’s begin by avoiding these

10 CLASSIC MISTAKES WHEN QUOTING A PRICE

1. Blind Bidding. Especially in today’s market where lots of freelance jobs are auctioned off instead of negotiated, it’s tempting to just plug in a number, no questions asked. Clients love it because your eagerness, ignorance or desperation practically guarantees them a bargain.

Project details are left vague for a reason! But how can you make the right offer without having the right information? That’s because you’re falling into trap number two. You are…

2. Making Assumptions. Poor client! She said she was operating on “a small budget,” so if you really want that gig, make sure you put in a lowball offer or give a discount.

NOT SO FAST! What might be a “small budget” to some might be a large chunk of money to others.

How can you be so sure whether or not a customer you don’t even know can or cannot afford you or your product? Did you just read the tea leaves? Did that little voice in your head tell you so? The “limited budget excuse” is the oldest trick in the book of cheapskates. And you’re buying it because you’re…

3. Not Doing Your Homework. Do you have any idea who your mystery prospect is? What company does she work for? How many employees does this company have and in how many countries? What clients do they serve? What’s their market share? What reputation does this firm or this person have?

You’d be surprised by how much can be found out by spending a few extra minutes on your computer (just look at how much info I was able to dig up on the editor of Newspapers for the Blind). Wouldn’t you want to have these data available before you quote a KIA price to someone with a Bentley budget?

Of course some website-seeing won’t give you all the answers, nor will it give you a chance to build a more personal relationship with your prospective buyer. Dry facts always have a backstory, and you’re not getting it because you’re…

4. Not Asking the Right Questions. Ideally, your product or service is the solution to your client’s problem and the pleasure to their pain. But if you don’t know what their specific wants and needs are, you won’t be able to fulfill them to their satisfaction.

Any price will be too high if your prospect doesn’t feel that what you’re offering is what he really needs.

Ask yourself: what do I minimally need to know to make sure that I am the right person for this job and to put in a reasonable bid? My article about breaking down an audio book rate gives you a sense of how much is really involved and how much is usually left out when bidding.

Once you’re fully prepared, why not turn the table by asking: “How much have you budgeted?” (notice the not so hidden presupposition) I must warn you: it’s easy to sabotage this process by…

5. Too much talking. Not enough listening. It boils down to this: do you really want to know, or are you just asking? If you’re passionate about your profession, chances are that you’re full of it… Some people -not you of course- are even full of themselves. And because you know and care so much about what you do, it’s very easy to go on and on and on about it. Zzzzzz

As I said to the computer guy at Staples: “I don’t need to know how it works, as long as I know that it works.” He didn’t get it. He was bathing in his own little bubble. I think he’s still talking to me, even though I left the store two hours ago…

When you’re actively listening to your prospect, make a mental note of certain buzz words and phrases that are an indication of why this project is important, and what this project is all about. If you’re on the phone, write it down. If you don’t keep track of these buzz-words, you’ll be…

6. Describing the benefits of a product or service in your terms; not in your client’s terms. What might be important to you is utterly irrelevant. What really matters is what’s important to your client. Never tell a prospect why they should hire you. People do things for their reasons, not for yours.

For instance, you might believe that price is a decisive factor in the deal you’re discussing, because that’s how you operate. Nothing is ever bought based on price alone, and perceived value might really be what the client is basing her decision on.

Some of us prefer more expensive brand name products. Others favor more affordable store brands. Do not bring up the price or your fee until the customer does. Otherwise, you fall into the trap of…

7. Bad Timing. Every sales trainer will tell you: never mention the price until a customer has fallen in love with the product. Highlight the benefits first, and be sure to use your client’s criteria and your client’s buzz words. Make the sale based on value. Value is usually defined as benefits received, divided by the price paid. If the perceived value is higher than the price paid, your customer’s a happy camper.

But what if a prospect tells you: “I can’t possible afford that. That’s too much money.” Is it ‘game over’? Only if you keep on…

8. Believing that Objection = Rejection. Wrong! Objections are opportunities to better understand your client. One salesman put it this way:

“I love objections. The more, the better. How can you sell somebody something unless you find out what he or she is thinking, and what his or her reservations might be about your product or service?”

Here’s the thing: it’s almost impossible to handle objections if the customer’s interest is not high enough, or when the prospect is not a “qualified buyer”. Those are the people who are “just looking” and who aren’t authorized to make purchase decisions.

“Your price it too high” is the oldest objection in history. Linguists call it a ‘comparative deletion’ because the obvious question would be: “Compared to what?” And without knowing the price concern, you can’t possibly help your prospect overcome it. Usually there are two reasons:

-the perceived value of your service or product is lower than your price or your fee;
-your prospect genuinely can’t afford it at this moment in time

In the first scenario, you haven’t convinced your client that what you’re offering truly meets his or her needs, or is valuable enough. In that case, you need to backtrack a little. In the second scenario, you can start offering other options (more about both in a future article).

There’s a third possible response to the price objection: giving in. That has to do with…

9. Being insecure about your own value. If you start apologizing for your prices, or if you’re undervaluing your services because you don’t think you’re worth it, stop negotiating because you look like an amateur.

The least you can do is go back to number 3 and educate yourself about the going rate for a particular project in a specific market.

Secondly, read “The Money Book for freelancers, Part-Timers, and the Self-Employed” and get a grip on your finances. Know how much you need to make to break even, and how much you want to make to lead the life you feel you deserve. Get a backbone and be proud of your price!

Losers lower their prices. Winners know what they’re worth!

A word of warning: if a prospect senses any sign of insecurity, you’ve just shot yourself in the foot. Remember that people equate price with quality. If they contacted you, they’re interested in hiring you, so hang in there and avoid…

10. Falling for False Promises. Never accept a job based on the promise of future work. The job is the job. Even when the client holds up a juicy carrot and says: “If this works out, chances are that a whole lot more will come your way,” treat it as a big red flag. You know that you’ll end up doing more for less, and you’ll never hear from them again. End of story.

FORTUNE COOKIES
Well before we’d reached the end of our block, my daughter had sold all her cookies and a minivan stopped in front of us. It happened to be a family that had already bought a few bags of Snickerdoodles for the MS Walk.

“Here sweetie,” said the mother, as she handed over a 20 dollar bill.

“But I don’t have any more cookies to give you,” said my daughter.

“That’s okay,” replied the Mom. “When you came to our door, I could only pay you a few dollars, because that was all the money I had in my wallet. I just went to the bank to get some more. All of us agreed that your Snickerdoodles were the best we’d ever had!”

Even though she was smiling, it looked like the Mom was holding back tears. As my daughter was talking to her kids in the back of the car, their Mom said quietly:

“My mother died from MS last year. We miss her so much. Thank you for doing the walk!”

“You’re very welcome,” I said. “I am so sorry to hear about your loss.”

On the way back, I told my daughter: 

“Different people do different things for different reasons.

There’s no cookie cutter approach.

Now, let’s go to the kitchen and bake another batch!”

Paul Strikwerda © 2010
www.nethervoice.com

PS If you feel that this article has been of value to you in any way, please  show your appreciation by making a donation to my Walk MS team today. Thank you!

PPS Ever felt like telling your clients how you really feel about them?  I just wrote an Open Letter to Voice-Seekers.

Technorati Tags: blind bidding, Dutch voice over, freelance prices, how to price a service, Nethervoice, overcoming objections, Paul Strikwerda, pricing a product, pricing mistakes, product pricing, The Moneybook, tips and techniques to overcome objections

Related posts:

1. Leaving a Legacy
2. Money, Money, Money
3. The secret to landing any freelance job
4. Breaking down an audio book rate
5. Only in America