Kickfannie MarketItRight
by Mary Ellen Hickman for Kickfannie BrandIt and MarketItRight
Note: This week we allowed Mary Ellen to venture off into the sales realm, as you read, you’ll understand why…she has excellent advice! Kickfannie CEO, Deb Chandler
Why Your Business Is Not Making Enough Money
One of the most common reasons a business isn’t making enough money: you are too willing to lower your price in order to close a sale, fast.
This is a terrible reason to cut price.
The moment you do, you signal that your services aren’t worth full price. The client who asked for a discount agrees, as he doesn’t value your services enough to pay full price. Now, he becomes “that client” – the one who nickel-and-dimes you.
Price discounting is the tool of a weak salesperson. You are not a weak salesperson.
Step 1: Don’t Discount
If your client just asked you for a discount that means that you still need to demonstrate the value of your work. Walk your client through your proposal to show how and where you provide value, and then ask to move forward at the current price. Once he sees the value detailed, a serious client is not going to leave you over a 10% price difference between you and your competitor. If he does, he’s not a good fit for you. Help the client understand that you’d love to work with him, but that if you reduce price, you wouldn’t be able to deliver the rockstar services he wants.
Step 2: Discount For A Purpose
f your customer is going to save you money, you can pass on a portion of the savings to her. Short of cash? Consider a small discount – two, three or five percent – for 100% prepayment, so that you don’t have to pay to borrow money. Need more consistent business? Offer a small discount for a long-term contract.
If your client’s budget is too small, but not below your minimum, reduce the scope of the services provided. But keep your margins.
And if you haven’t set a minimum amount, do so ASAP.
Just Say No
If asked for a discount, decline. A few useful responses:
“I wish I could do that for you, but I can’t.”
“Absolutely – if you pay in full today.”
“It sounds like you really can’t afford the full investment – is that the case? If so, what is most important for you to achieve, and what is your budget for this?”
“I could totally do that for you. But I really can’t ask my people to work for free.”
About the Contributor
Mary Ellen Hickman, MBA, is the head of Hickman Consulting Partners and a seasoned business and marketing strategy consultant with over twenty years of experience in the US and overseas.
A frequent speaker, Mary Ellen regularly leads highly-rated interactive webinars and workshops, including Office Depot’s Web Cafe, Women Impacting Public Policy, and the Center for Nonprofit Advancement. As an educator, she wrote the curriculum and taught one of the first nonprofit marketing courses for Marymount University graduate businessesiness students.
Mary Ellen’s corporate experience includes national brand management and new brand launch at Coors, Warner-Lambert and Kraft. She received her MBA from the Darden Graduate School of Business at the University of Virginia and her bachelor’s degree, cum laude, from Georgetown University. See additional information on Hickman Consulting Partners, LLC at www.hickman-partners.com.
Submit Questions for Mary Ellen to answer at MarketingBranding@kickfannie.com