How to deal with client's expectations on the price of services?


4

My partner and I have started our own company a few months ago and things are going okay. One of the main problems we're facing is that we're having a hard time communicating the price of our services (web development) to our clients.

We've both been working in the industry for about a decade so we know what we're worth but it's difficult to communicate to our clients what they are paying for. Our prices aren't outrageous, in fact they're very competitive, but a lot of the clients we meet seem to think that they'll pay next to nothing for their website and find themselves shocked when we quote them a price. When I see their body language change I feel that I fall on the defensive (I would like to avoid this).

Do you guys have any tips on how to broach the subject sooner so I don't lose a possible client after spending hours discussing their project in lengths?

Prices

asked Dec 19 '12 at 05:57
Blank
Gazillion
121 points

4 Answers


3

I think there are a few things to consider here:

  • You know what you are worth because you know how much work needs to be done - does your customer know that as well (hours spent etc.). If not, why not?
  • Have you shown your customers samples of your previous work so they can see your quality (I assume you have)?
  • What else are you selling apart from your code?

I think the key to understand here is that the sale does not happen at the rational level. Your customer wants a website, but there is a lot more to it than just the hard facts - your customer wants a worry-free process, a smooth project management, and for that he needs to build a trust relationship with you. From my experience a good service provider will make their customers feel at ease about the product and the entire process, and I think this is where you could add more value.

Let me know if I can help with this.

answered Dec 19 '12 at 07:57
Blank
Matthias
81 points
  • agree with your take, but there is a problem: with websites, peoples "anchor" price point for "websites" is already set by TV adverts (1and1, sites for free!, etc) and countless references to the kid next door who can do it for 50 bucks (while he mows your lawn). A portfolio sample is important, but without concrete business returns it only show shiny baubles that doesn't describe what business value the solution returned. – Jim Galley 8 years ago

2

Understood, but the people who want their business website to be a free WordPress site are not the ones you want to talk to. People who actually know a bit about online marketing (that includes self marketing) will know about the importance of making a difference in this ever growing online space. Who are you currently targeting with your offers? Maybe people who do not have the need / budget for professional sites? For example, I don't need a very expensive site for my consulting services just yet, but a company that has the budget for it will know - because their competitors have one. Maybe you need to map out your target market better and focus your efforts more? Then you won't hear about the lawn-mowing kids anymore. Let me know if that makes sense.

answered Dec 19 '12 at 10:26
Blank
Matthias
81 points

2

Of course they're shocked, but so what? Did you think they would respond with, "Wow, that's cheap; we expected to pay twice as much." Sticker Shock is a price negotiating tactic for many people. Don't let it fool you. You're competitive, so they can't find anyone much cheaper. You can always start off by asking what they have in their budget for the project.

They need to determine how valuable a website is to their business. Not all sites are equal. You should be demonstrating why the site you will build is worth it. Too many companies treat their corporate sites as electronic brochures.

Start targeting business in industries that can leverage a website to increase their profits.

answered Dec 19 '12 at 11:42
Blank
Jeff O
6,169 points

1

I would suggest you read this blog for some ideas around pricing.

This specific post - "Growing ones consulting business " is especially apt.

One of the bigger takeaways is to price based on value vs "hours". If you reframe the discussion away from "hourly rate" to "value received" and clearly define when it doesn't make sense to engage, then you are working at a different level.

Some may think that it's hogwash, others live by it. But you need to point to a verifiable example where your service made a big difference .. and milk it for all you got.

answered Dec 19 '12 at 06:57
Blank
Jim Galley
9,952 points

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