Vol. 9. Negotiating Prices
In May I sent out a $9k proposal.
Sometimes I still swirl over custom proposals for hours, but for different reasons than I did earlier on in my journey. Nowadays, this is what I'm taking my time with:
- Making sure Iām clear on scope
- Making sure it adds the value that the business owner is looking for
- Making sure Iām charging enough to make all those promises worth it for me
And once I have all of those in place, my feelings and nerves ramp up as I add that proposal to a workflow in dubsado and modify emails that will be going out.
Because instead of worrying "will they sign at this price?" I worry a little bit about being on the hook for delivering on these promises.
I still have to consciously choose detachment from the outcome sometimes.
The reason I'm sharing this is because it is normal to feel uncomfortable, when you care about the work you're delivering. But it doesn't mean you have to...
a) convince the client you're worth it
b) drop your prices or negotiate to get the client
When it comes to what we do, I think occasionally we can negotiate, but carefully.
For instance, if your proposal is purely bookkeeping and compliance work, there isn't much wiggle room for reducing scope (and price) which is the only way you should negotiate. Don't ever just agree to a lower price without removing features/benefits.
Example:
Your basic package has monthly bookkeeping, year end 1099s and monthly reports.
The client says even your base package is out of his budget. You could offer to reduce the price of your base package slightly and remove one or two deliverables (like monthly reports or 1099s--but he'll still need to pay for 1099s at some point unless he does them himself).
But as you see, you can't really remove anything else. Maybe frequency. Instead of monthly, you're updating quarterly.
Of course, you can always make the decision not to negotiate whatsoever and to also provide value with each package like I have--every level gets monthly financials, because we want to be known as higher touch & more valuable.
So that $9k proposal?
The client didn't sign. The $9k wasn't a cleanup, it was a complex e-commerce setup. Where we were going to be integrating multiple platforms, creating a dashboard, and ensuring everything was accurate as transactions flowed through on a weekly basis.
I knew, from when I met with the prospect on the phone that there were a few factors I wanted to price high for:
- he was all over the place in the conversation
- he understood the value of having accurate numbers
- he had loan covenants to report
- he wanted help managing cash flow
- he really wanted an accurate realtime pulse of things, which meant ongoing monitoring
- he needed complex commission calculations for his sales team
All of those, when considered, added up to a pretty intense proposal because when I set things up, I really think through how that setup will scale with growth--not just how it will work for them right now, and I was only willing to be on the hook for for a minimum of $6k (another $3k for the dashboard build). Especially as we were going into summer.
Honestly? I was relieved when he came back and said it was out of his budget. He didn't try to negotiate, so I didn't even have the opportunity to reduce scope, but I knew I would be resentful if I did.
So I wished him best of luck --and I hope he doesn't come back in a year with a mess on his hands for me to cleanup! š
Now I can 100% focus on the Elevate revamp that's underway! Which I'm getting a lot of questions about... if you're already in Elevate or have been for years, you will also get the updates!
I've been traveling a lot this summer as well as working on Elevate, so you may have noticed that it's been kinda quiet here..no new YouTube videos or podcasts, but stay tuned, cause I have something super special coming soon...and if you love my podcast, you'll really love this!
talk soon,
Serena
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