by Ilise Benun
Right away or wait? And, if so, how long? Problem is, there is no rule.
It’s different for every single situation and there are several points in a normal prospecting and sales process at which it could naturally come up. Here are general guidelines for how to talk about money at each stage:
1. Initial Contact
In this preliminary phase with a new prospect, you’re deciding whether it’s worth your time (and theirs) to build a relationship. Should you start with a phone call or take the time to meet in person? Often it will depend on whether they can afford your services, which you need to know sooner rather than later. To find out, test the waters by floating some general price ranges as you’re talking. Do they blink? Stop breathing? Pause uncomfortably? Skip over it as if it’s a minor detail?
You got past the initial contact and they seem fine with your general price range but now there is a project on the table and it’s time to decide whether to do a proposal. Get more specific about pricing for the project at hand and run it by your prospect verbally (on the phone, not via e-mail) to see if it fits their budget. Get an okay on this before spending hours on a proposal.
3. Proposal Presentation
By now, you’ve discussed the parameters of a project, written your proposal and are ready to present it. If you haven’t already, it’s time to get specific and commit to a price.
4. Handling Objections
If price is one of the objections your prospect has, now is when the negotiation begins. Your fee is one element but certainly not the only one.
5. Closing the Sale
Here is when you close the negotiation and either come to terms or not. You must know your bottom line in order to close the sale.
How to Respond to “What’s the Price for a [Fill in the Blank]?”
Here’s a typical situation: Cindy gets an e-mail message out of the blue from a small business owner who found her online and wants a price for a website. Cindy’s excited to get inquiries “from” her website. She doesn’t quite trust herself to say the right thing when she really wants the job and doesn’t want to jeopardize the opportunity. So she responds via email, giving her prospect what she’s asking for: a price.
That is the easiest thing to do—and potentially the most dangerous from a business development point of view.
It’s easy because all Cindy has to do is reply with a number, but it’s dangerous because when you send prices to a stranger without having any conversation, without positioning or context or project details, you give over control and essentially say, “I’m not that interested.” This can cost you the job.
Prospects who ask first about price raise a red flag. What could it mean? That the prospect’s main criterion is price not value? That they’ve been burned? That they’re cheap? You won’t know until you talk to them.
If Cindy really wants the project, she will pick up the phone—a phone call in response to an e-mail inquiry speaks volumes about your level of interest—or respond with a message asking to schedule a call. This puts Cindy in the driver’s seat and is the first step toward the positioning her price.
Illustration courtesy of Branden Vondrak
1. Do You Need Confidence to Talk Money?
Confidence is the byproduct of experience. Through trial and error—mostly error—confidence develops. The more you practice the action you’re not so confident about, the better you will get, and as with anything, the better you get, the more confident you will feel the next time, learning as you go. Confidence will not develop if you don’t try and don’t err. That is especially true when it comes to talking about money and pricing.
1. For more information like this, pick up a copy of Ilise Benun’s new book, The Creative Professional’s Guide to Money: How to think about it, How to talk about it, How to manage it.
3. Want to try a free mentoring session? Sign up here.