Now that we have gained an understanding of the customer’s viewpoint regarding pricing, it is time to take the next step: having the value conversation. You will not have the same value conversation with Customer A that you will have with Customer B. Every customer has his/her own needs, wants, and goals. These will be the key factors that drive this conversation. Keep in mind that it is indeed just that, a conversation. Not one person should be talking the entire time. Both parties will need to be engaged in order to really understand what each other brings to the table. You should have at least two meetings with the customer throughout this process. The first meeting will cover all of the basic information and help set expectations for both parties and the second will be where you actually review the potential agreement.
Prior to the first meeting, it may be a good idea to send the potential customer a standard questionnaire template. This questionnaire would have basic information as well as more long-term oriented questions so that you can prepare for the meeting beforehand by gaining a little extra understanding of who he/she is as a person.
During the meeting, you can cover a broad variety of topics. The goal is to have a free flow conversation that covers any idea that you or the customer may feel is important. Where does the customer want to be in the next year? 5 years? 10 years? What does the customer need right now in order to propel them in that direction? What operational inefficiencies are preventing them from achieving the company goals? What is the customer passionate about?
All of these questions will arm you with the knowledge that will put you in a much better position to close a deal. First, it shows that you are actually engaged with the customer. Second, you actually understand the customer and will know exactly how your goods and services can help them achieve exactly what was described above. When describing how you can help them, do not be afraid to ask how much it is worth to them.
The great thing about having this conversation is that it sets expectations for both sides. There can often be a lapse of what was expected versus the actual outcome. With all of this information already outlined, you will be able to price for exactly what is expected from you. Keep in mind that you are pricing the customer, not the services.
Once you have nailed down a price, it is time to deliver that to the client in your next meeting. In this meeting you want to be careful about what type of language you use. Try using the word price instead of fee, agreement instead of contract. Always ask “does that sound fair to you?” Fee and contract have such a negative connotation to them that replacing these words will help you sound more like a partner with the customer. Asking them if the price seems fair is a great way to get the customer to open up and give an honest response. If the customer says that the price is too high, then you can review the previous conversation and the expectations that you both set. This will once again help put things in perspective for the customer. These are simple tricks, but they make a difference.
In the next and final entry of the series, we will be reviewing different pricing strategies and provide some tips to ensure that you are prepared to deliver the final number to the customer.