It’s an awkward moment.
You’re a business person and you’ve made your pitch. You killed it. Then your prospect looks at the quote and asks … “Is that your best price?”
I was in business 15 years and heard that dreaded question dozens of times. If you’re in business and haven’t yet, you will. Answer it wrong and you’ll regret it, trust me.
It’s Not Their Fault
Some people are taught to always ask it when making a large purchase like a car or hiring for home services. “Never accept the first price!” we are told. The assumption is that the first price is intentionally inflated to 1) take in suckers who accept it or 2) give some wiggle room for those who are savvier.
Sadly, this is true many times. Bad business people have made customers skeptical of all business people, even good ones.
Do Better for You … and Them
Reducing your prices is obviously bad for you but in the end, it is bad for your customers as well. Your heart will not be fully in your work if you know you are not making enough money. Even though you will try to do your best, you simply will not.
Remember this – If you do poor work, the customer will only remember that it was poor, not less expensive. If you do great work, the customer may remember the price but will be proud that she got full value and will tell others.
Three Powerful Words
Early in my business career “the question” terrified me. If someone challenged me on price I immediately folded and reduced my quote. I needed the work and was afraid my prospect would not hire me unless I did.
I felt trashy every time I reduced my price. I also enjoyed the job less because I knew I wasn’t working for what it was worth. Over time it started to make me angry.
One day I got frustrated enough to try a different tack. I had just delivered a quote to a potential customer, a job that included multiple small jobs around her home. She looked it over, glanced at the price, and asked.
“Is that your best price?”
My gut clenched and I felt that familiar insecurity. She would be a good customer and I didn’t want to lose this opportunity. But for some reason, I decided to risk it.
“Yes it is.”
And I waited. Not because I was a steely-eyed negotiator. My nerves simply wouldn’t let me speak.
My prospect looked over the quote again and, after a tense moment, said, “Okay.”
And that was it, my business life had changed for the better.
Three Really Powerful Words
I tried it the next time the question came up and it worked again. And again. In fact, it never failed. In my remaining years in business, no one ever chose to not hire me because of price.
Later I added to my response. I would say (helpfully, NOT snarky), “Tell you what, if you’d like to shop around I will give you the numbers of a few of my competitors who do good work. Have them look at this scope of work and if they can do the same job for a better price, you should hire them.”
No one ever took me up on the offer. I got the job every time.
Why “Yes It Is” Works
In short, credibility. If your prospect knows you are willing to walk away from an opportunity instead of compromising your price, you are telling the prospect that you can be trusted to shoot straight. And if you haven’t figured it out yet, trust and credibility are everything in business.
Conversely, if you do drop your price you are admitting that you inflated your first quote unnecessarily. You have therefore broken trust by starting this relationship with a lie.
Tips Before You Try This
- Make sure it is your best price. Don’t be a jerk. Set appropriate prices that you can justify. Otherwise, you deserve to get beat.
- Ask them to compare apples to apples. If your prospect does want to get quotes from other vendors (and she should), ask her to use exactly the same scope of work that you bid on. Some shady vendors will try to cut corners so they can come in at a lower price (especially on materials – cheaper brand paint than you bid, for example).
- Be sweet. Do not be impatient or sarcastic when you say “Yes it is.” Be helpful and honest.
Do good work for a fair price. Fair to you and to your customers. You’ll be happier and so will they.
P.S. – Another note about scope. If your prospect does want to cut the task list to get price down then by all means adjust your price likewise. Just make sure you get the final scope in writing (*signed by you and the customer) before beginning work.