When to talk price with your clients

Smart Gets Paid Podcast Transcript
Season 1
Episode 9

Intro (00:02): You're listening to the Smart Gets Paid Podcast with me, Leah Neaderthal. I help women land higher paying clients in their B2B consulting and coaching businesses, but I've never been a sales person. My background is in corporate marketing. And when I started my first consulting business, I learned pretty quickly that it's about a thousand times harder to sell your own stuff than it is to sell someone else's. So I taught myself how to do it, and I created a sales approach that feels comfortable, makes you feel confident, and it works consistently. And now I teach women how to land higher paying clients in their B2B consulting and coaching businesses. So whether your client contracts are $2,000 or $200,000, if you want to work with more of the clients you love, do more of the work you love, and get paid more than you ever imagined. Then you're in the right place. Let's do it together. Welcome to Smart Gets Paid.

Leah (00:54): Hey there, Leah here, and welcome to this episode of the Smart Gets Paid Podcast. Hope you're doing well. Hope you're having a good week. And I want to fill you in on a conversation I had with a friend last week, she was telling me about her job search, and stay with me here, this does relate to running your own business. So my friend is a head of product for technology companies, and she was going down the path with this one company that wanted to hire her. And she was telling me how she had six interviews with the CEO and multiple people at the company all over the course of maybe a four week period, six interviews, you guys.
And after the sixth interview, they asked her what her salary requirements were. And she told them, and they got back to her and said, Oh my gosh, that is too much. We can't afford you! After six interviews and four weeks. And I was thinking about that as I was putting together this episode, because that process of how we go about getting a job. We go down this path with the companies we want to work at and then we talk about money all the way at the end. And that's actually something we're taught to do. We're taught to talk about money at the end. You know, don't talk about salary too soon. You're going to put them off. You'll look like you just want the money, which I don't know why we have to pretend that we don't go to work for money. But anyway, I digress. So this process of job interviews, that's a process that we're all familiar with. And then we bring that same process and those same assumptions into our business. And we talk about money all the way at the end of this process with our clients.

(02:22): But there's a lot of risk there because you have no idea if you're in the same ballpark. I remember one time early when I was running my marketing and web design business, a friend of mine connected me to one of her relatives who needed a new website for his business. And we got on the phone, we had this great conversation and I sat down to work on the proposal. I was super excited because what he needed was exactly what we did. And it was a warm referral, and we had this personal relationship. I just felt like this was such a perfect fit. So I scoped out a project that I knew would get him where he needed to go. And I priced it around $15,000 and I sent it over with, you know, a lovely email or whatever. And a few days later, we got on the phone to talk about it and I immediately knew something was wrong.

I remember that he thanked me for putting together such a thoughtful proposal, but they were thinking more like $1,500. And remember I'd price it at $15,000. I was distraught because I thought I lost a perfect client. And actually for a long time, I beat myself up because I had priced it so high. And it caused them to say no, but over time, what I realized was that I actually didn't price it too high. It's that they weren't a client to begin with because we weren't a fit on price and we were actually never going to be a fit on price. The client that I'm talking to in the conversation you're going to hear today is facing the same thing. The woman I'm talking to today is a sustainability consultant. And her clients are networks of professional service firms. Think sort of similar to associations. And she's helping these networks provide valuable tools and information to their members who are these professional service firms.

(03:58): So as you're going to hear, she's putting together a proposal and she's facing the same thing I faced with that client all those years ago. And the advice you're going to hear me give to her would have saved me a ton of heartache back then. This conversation is a one-on-one coaching call from my Signed program. So I want to say a special thank you to this student for allowing me to share this conversation with you. Take a listen to our call and at the end, I'll come back and share how you can apply a lesson from this call to your business.

Sponsor: Hey, before we dive in, I want to invite you to a free live training I'm leading on Tuesday, April 27th, called The One Sentence Pitch: How to instantly communicate your value so clients want to work with you. If you've been listening to this podcast, you've heard me talk about the painkiller, positioning your work as the must have solution to your client's number one problems. And that's what we're going to do in this free live training. You're going to learn how to clearly, concisely, communicate your value and stop feeling like you're kind of rambling. You're going to learn how to get the attention of the clients who value your work and who can actually afford you. And you're going to see the embarrassing way I pitched my work years ago before I figured out the system that I'm going to share with you and trust me, it's embarrassing. So join me on Tuesday, April 27th at 2:00 PM, Eastern 11:00 AM Pacific for a free live training on The One Sentence Pitch: how to instantly communicate your value so clients want to work with you. To register go to smartgetspaid.com/pitchtraining, all one word. And that's pitched with a P not well, you know, smart gets paid.com/pitchtraining. And if you happen to be listening to this after the date of the training, and you want to see if I'm doing another one soon, just go to smartgetspaid.com/future to see upcoming trainings and events. All right, on to the call.

Leah: How was your weekend?

Guest (05:42): It was good, wet and rainy, but I spent some of the day yesterday going through the materials for module one. And I also jumped ahead to modules five and six about the proposal, because as you know, I'm in the middle of crafting a proposal right now that I would love to get out by the end of this week or early next week. So yeah, I'm finding the materials very helpful. I just have a hell of a lot of work to do.

Leah (06:10): Yeah. Yeah. Well, this is your call and we can talk about where you want to go in the course where you want to take your business, or we can talk about what's on your plate right now? So what's the best possible outcome for you on this call?

Guest (06:23): I think probably help with the immediate proposal that I have on my plate would be most helpful because frankly, that's revenue waiting in the pipeline. And I think from the course, what I hope to get is, and of course I saw this and some of the things I've reviewed already, sort of a more methodical approach than just sort of random opportunities that I chase or pursue. I would rather be in charge and be the one driving the pipeline process. And I don't have any pipeline process set up right now. I mean, I'm using HubSpot, but only because I dump things into it once in a while. I'm not using it to actually drive behavior. So I need sort of that practical, rigorous approach to keeping the pipeline full. So that's what I hope to get out of the course. What I probably would like to talk through today is the immediate proposal. And I'm a little bit further down the process than I wish I were simply because I'm learning things from your materials that I probably should have done. But early February, I sent out cold letters, physical letters to 20 executives in London because I was planning a trip to London in March. I had a couple of speaking engagements and so forth, and these are executive directors of networks of professional service firms, law firms, accounting firms, et cetera, because professional services is my target market. Out of those 20 letters. I got four appointments.

Leah (07:57): I think sending a physical letter is brilliant. When I worked at a software company, it was an enterprise software and their best sales approach for conversations was basically sending a letter. It was a very strategic letter, but in this digital world, an actual letter cuts through the noise. You got a 20% appointment rate. It is very good.

Guest (08:19): And of course that trip got canceled, but I had video conferences with every single one of them. Three of the four said, yes, we're definitely interested. We're going to want you to come and speak to our conferences. And then the fourth one is somebody who followed up with me and said, you know, we'd like to explore more because there's gotta be things we can do when it comes to social impact and sustainability. So that's the firm that I'm working on a proposal for right now. So, I've had two conference calls with her. After the first conference call I sent a list of here are the types of topics that we could talk about as potential workshops to do for your members. So I had that call with her a week and a half ago, we ended with, you know, can you put a proposal together?And I said, yes.
And I realized what I didn't do during the call though, is I didn't broach the dollar or the budget. So I have no idea if her budget is 3000 or for budget is 50,000 or if there isn't even a budget. But I also know that I'm the best person for what they want to do. So I'm torn about pricing because I don't have any idea. And I'm wondering if you think it would be a good idea for me to reach out back to her and assess the budget question.

Leah (09:53): Yeah, that's what I was thinking. So before we even get to the pricing, what is it that they really need from this program? Why does this program need to be successful? What will that allow them to do?

Guest (10:07): It'll allow them to be more focused in where they spend their time and energy. It'll allow them to have greater impact in whatever initiatives they choose to do, and it will amplify the impact that much more. So it's the difference between random acts of kindness on a one-off basis versus a holistic compelling program that drives behavior and affects much greater change.

Leah (10:33): All right. And if they can do all of that, then what does it really mean from a business perspective?

Guest (10:40): Well, two things, well, maybe more than two things, I think it will be a differentiator for them with respect to other networks. I think for their members, it is a business opportunity because if the network can provide its members guidance on how to do this, right, that will be a differentiator for each of them in their own community when responding to business opportunities or even creating business opportunities. So there are things that they could learn and do to help their own clients.

Leah (11:14): I see. Cause what I'm trying to get at is we can talk about why the network should do this or why they want to do this, but I want to really get at why must they do this? Why does this have to work?

Guest (11:28): Ultimately their member firms will lose business. If they don't know this is coming and prepare for it and be ready to respond.

Leah (11:39): Okay, that's the good stuff right there. So when you think about your proposal, the whole proposal is designed to help your client fall in love with the future, their future. So it has nothing to be with you, nothing to do with your expertise, your degrees, anything like that, right? It's all about helping them see how their business will be different. The other thing that our proposal is supposed to do is to be a summary of what's already been agreed to, ideally you've already sort of agreed that they can afford you. So writing a proposal is exceptionally difficult, as you're experiencing right now, if you don't know that they can afford you. So I would reach back out to her and say, listen, I'm putting this proposal together. It occurs to me that we didn't talk about price to accomplish the objectives that we've set out and that you need to, it typically starts at X. Does that sound like what you were expecting?
I just want to sort of pull out a couple of things here. First, you have to sort of know a ballpark of what you would charge. Not that you mentioned a ballpark, you mentioned a number and there's a difference because if you say this costs anywhere from $20,000 to $30,000, you're probably thinking $30,000 and they're expecting $20,000 right. Or $18,000 or whatever. Right? So you want to say a range because the range is it doesn't gain agreement. It just actually throws a little more confusion that way. So what you want to say is it starts at X. You have to have a rough idea of what you would charge. You have to be able to say that. Right. And then you have to be able to hear the response. But we're not talking about budget, because when you say what's your budget, it's like, what have you allocated for this?

(13:21): Then you're talking about money before you're talking about value. And a lot of companies, they might not even have a budget or may not know what to budget, right? So we just want to ignore that because your price comes from you, not from them. Right. And if they can't pay your price, then they are not your clients. So as you're putting this program together, think about what you would charge and then say, listen, it starts at X. Is that what you were expecting? And when you say, is that what you were expecting? That does a couple of things. It is almost like a softball. It's like, is that what you are expecting? Either yes, that is what I was expecting because I am a very smart person and I know what I'm doing. Right. And if they say it's higher than I was expecting, that opens up a great conversation.

Guest (14:08): If in fact she comes back and says, Oh, this is higher than what I was expecting. Then I wouldn't say let's have a chat let's call. Cause I wouldn't want to go back and forth on email.

Leah (14:17): I think this whole conversation is over the phone, over the phone or zoom.

Guest: Okay.

Leah: And you can say, you know, hey, I just had some lingering questions as I was putting the proposal together. Can we find a few minutes to chat? How does that sit with you?

Guest (14:31): Yeah, I think I have to do that because if I'm thinking $15,000 and she's thinking $3,000, then I'm not the right person.

Leah (14:37): Right, right. And I think it's really more a shift away from only responding to what other people have allocated or want to pay or can pay, to you know, your pricing comes from you.

Leah (14:56): Alright, so I want to share one last thing. There's a popular proverb that says the best time to plant a tree is 20 years ago. And the second best time is today. And it's not too dissimilar from what we're talking about with talking about price, because the best time to have the price conversation with your clients is in those early conversations. And in fact, I teach my students that you should be talking price in the first conversation. And then of course they learn how to do that. But the second best time is today. It's never too late to go back and have the price conversation with your clients so that you know whether they're a good fit for you.

Leah (15:33): Hey, thanks for hanging out with me. If you liked this episode, take a second and click the subscribe button wherever you're listening to your podcasts and you'll be notified as soon as I release a new episode. And if you're listening on Apple podcasts, I'd so appreciate it if you took two seconds and left a rating or review. This tells Apple podcasts, hey, there's good stuff in here and they'll recommend it to other listeners who might benefit from these lessons for their business. So please take a second and add a rating or review. Thanks. So that's it for now. I'll see you next time on the Smart Gets Paid Podcast.