How to Share Pricing Information Right
I get asked all the time about sharing pricing information – with clients and with professional colleagues. Of course, you have to share pricing at some point with your clients during the inquiry process, but you don’t have to give away your numbers to colleagues, or worse, competitors.
If you do share pricing information, what’s the best way to do it? Before you share your pricing with people who aren’t actually buying anything from you, I recommend asking yourself why they want to know?
The best reason is that they want to share it with someone who’s interested in your services. But even that is a bad reason to give out the information, because it’s unlikely that the person who’s referring you can build a value proposition or clearly and effectively “sell” your services as well as you can. What you want is an introduction instead.
If you are going to talk about pricing with people, be careful not to give too much information. Most people are not good with numbers, and will get confused if you provide too many of them. The worst thing that can happen is that a maximum you charge clients gets twisted around in the mix to the minimum, and now you’ve just priced yourself out of the market!
Then there’s the very real possibility that your pricing information could get in the hands of competitors who don’t have the ethics you do. This is much more likely to occur if you are a newer business or looking to establish market share in your area. Don’t give fodder to someone who may take advantage of knowing your pricing and actively undercut you by a few dollars to grab that piece of business you’re bidding over.
My favorite response to “What do you charge?” is to talk about how and why you charge, rather than what. If you’ve done your pricing well, you’ve learned what your comp set is doing poorly or like everyone else, and you’ve come up with a unique and compelling way to price your services. When you have a distinct competitive advantage tell as many people as possible, and give them the information on why you decided to price this way.
For example, if you’re a wedding planner and you charge a fixed fee, tell people you charge a fixed fee rather than a percentage, because you don’t think it’s fair for you to be incentivized to spend more of your client’s money.
If you are a venue and you charge very little for non-peak dates, tell people you lower the rates on the venue to barely cover costs during the slower season, because you want to build amazing experiences for guests to come back during the quiet season and gain exposure in the market place.
And so on.
The key is not to give away something as important as pricing to people who can’t talk about it as persuasively or accurately as you can. Instead, give your professional network the material to convey a compelling unique selling position with something as unsexy as pricing.