One of my lovely Accountability Club ladies who sells a service (as opposed to a product) posted a budget question in our Facebook group this week and I thought it was worthy of further discussion. Fiona has a business that markets other people’s businesses in her local area. She works very hard to make sure that the things she promotes are visible to as many relevant people as possible. It’s serious work, promoting other people’s stuff and Fiona doesn’t take the responsibility lightly.
What Do They Want To Spend?
The question Fiona asked is how she can find out what budget potential clients have? That way a) she doesn’t waste time dealing with people who people think that her service is free and b) she can tailor the perfect package for them so that they can get maximum visibility.
It’s actually a question that can apply to any business really, isn’t it? Whether you sell a product or a service, wouldn’t it be wonderful if the first thing a potential customer said to you is ‘I have £X to spend, what can you do for me for that price?’. Somehow, it just doesn’t seem to happen like that.
Whether you’re creating a gift basket of your gorgeous makeup/skincare/organic produce/chocolates or writing a proposal for your service, if you just knew what the customer wanted to spend, it would make life much easier. I know of many businesswomen who have spent ages creating something only to be asked, “HOW MUCH?!?!” when telling the customer the price. The problem with that
‘how much’ response is that it doesn’t just rattle the cages of those mind monkeys, it blinking well upends the damn things! All our pricing mind monkeys come racing to the fore shouting “You’re too expensive, I told you so!” as well as “Who do you think you are?” and “Trisha/Carol/Leigh/Anne (insert name of a competitor of your choice) doesn’t charge as much as you do and she’s been doing this for years!” and so on.
Two Simple Ways To Discover A Customer’s Budget
However, there are two simple solutions to this problem, which keep the mind monkeys at bay and get you paying customers into the bargain:
One is to ask them. It sounds obvious I know, but if Fiona says ‘can I ask you what budget you have in mind for this project?’ the prospect will tell her. It’s a perfectly reasonable business question. I know it seems too simple to be true, but most people (especially when you sell business to business) understand that there are costs associated with work. If for any reason, the prospect had misunderstood and assumed that this would be unpaid work, they’ll tell you and potentially save you hours of work. Don’t worry that the ‘free’ answer will be horribly uncomfortable, instead have a couple of things up your sleeve that you can suggest that they can do for themselves that will get them some results.
The second solution is to always have 3 pricing bands, for example, bronze, silver and gold. There is a reason that coffee shop chains have 3 sizes of coffee cup. With this pricing structure, the customer can price differentiate for themselves. The most interesting thing about the whole ‘3 prices’ pricing tactic is that the majority will choose the middle one. Make sure that the middle one is the one that you’d rather deliver. Some people will always choose gold, because that’s how they perceive themselves. They think of themselves as someone who likes the best/biggest/most that’s on offer. Others will always choose bronze, because they are bargain hunters. I mean no judgement in either of those comments, it is just one of those things. Your job is to make sure that you are making a good profit on whichever one they choose.