Losing business based on price means it’s time to up the ante!

no low price

I was attending a conference and ran into a consultant I have known for a few years.

We got to talking and she said that she recently lost a contract opportunity based on price being too high. She found out a few months later that the consultants they hired had done a really poor job. So bad in fact that the client tossed them out and cancelled the project.

Of course I immediately asked her if she had contacted the client about restarting the project.  She said “No” because they already had said that she was overpriced. I suggested that she should go and talk to them again because clearly if they hired someone cheaper that did a lousy job then obviously they did not have the right resource, and clearly the right resource comes at a higher price.  She was not comfortable doing that as they likely have an objection based on price that she didn’t feel comfortable addressing.  Subtext was that she didn’t want to drop her price.

From my perspective this really isn’t a problem of “priced wrong” because obviously when they went with the lower-priced service they didn’t get what they wanted. Clearly there was a problem with the approach. For me it’s really clear my friend had not explained to her prospect the real value of doing business with her.

This is a problem that happens quite frequently to a lot of businesses, consultants included. Most are not really good at selling on value.  It’s not a really hard thing but most people are not experienced at doing the value-based sell.

Dealing with the objection of price is nearly always a problem of failing to communicate value. This is a pretty dramatic example but it is not uncommon.

Look, it is never easy to convince people to give you their money. Even when you know it is a good product or service that you offer and that they need.

So, I was not going to let this conversation end there.

“Want to know what I would do?” I asked her.

“Sure”.

“I would call and tell them you heard things did not go as planned and ask to meet with them. When you get that meeting  re-pitch your service but this time focus on the quality of your service and the specific and measurable value that you will deliver. Offer to do the project as you originally quoted but that you will look over the work that the other consultants did and if you can use any of it you will and this might help them regain some of the lost time.”

Her next question “Should I reduce my price” caught me half by surprise. I thought she was firstly not willing to and secondly knew better.

I told her that you cannot reduce the price. You can reduce the value you offer by eliminating part of work you are doing, but you can’t drop the price. Focus on value and how you can regain time lost. That is a powerful sell.

I also cautioned her not to come off with the “I told you so” attitude. Insult to injury is a hard pill to swallow and they already felt hard done by.

I suggested that she should re-position the whole thing as her fault.

“Wait what. How do I do that? Why would do I do that!” She asked in amazement.

I said “to let them know you are sorry that you did not do a good job explaining to them how you work and how you deliver results.” Make it about you doing a bad sell not them making a bad choice (which is by the way the truth). If you had properly explained the process and outcomes this likely would not have happened. And now you feel bad.

This is no place for smugness, but a heartfelt explanation and a genuine offer to help is a powerful thing.

We shook hands and went on our way as the event was starting again.

About two weeks later she sent me an email to tell me that she had taken my advice and met with the prospect. They did not want to restart the project as it was already too late they had missed the opportunity. They did however offer her a contract for a new project that was about to start.

They offered it to her on the spot. Why? Because of all the consultants who had bid on the original project she was the only one who followed up with an offer to try to pick up the project. She told me they definitely responded to sympathy.

We have all heard the saying “No one cares how much you know until they know how much you care.” It is true and while caring is not all it takes, it does make a major difference.

With business becoming ever more fast paced and distracted every day working with honest and caring people is always welcomed.

Sometimes it is way more profitable too.