Establishing Value Before Your Price

Recently I’ve been focused on price.  Why?  Because it seems to be one of the key issues.  “The price is too high”, “We don’t have budget”, “How much of a discount can we get?”  The list goes on with excuses and pleas for you to cut the price.  But it always boils down to value.  So what do I mean when I say, “Agree on value before quoting a price?”

Earlier in the year I was talking with a prospect about speaking at a marketing event.  Through several meetings I finally made my way to the decision maker, the place where we all want to be.  When I heard the words, “But we can get a speaker for free”, I was ready.  Why?  Because I’ve hit this same objection countless times.  There are lot’s of things out there offered for free…free email, free wireless, free Googledocs, free teleconference services, free newspapers, and the list goes on.  So why do we continue pay for these services?  Because somewhere along the way we’ve discovered some value that is not included in the free service.  How about free eye surgery! Would you buy it?  Not me – I’m hiring the best surgeon I can find regardless of price.  Even if I do have to reallocate funding from other activities, including pizza!

Establishing this kind of value requires spending time with the stake holders, learning about their business, their pressures, upcoming decisions, risks, etc.  Once you understand, you begin to paint a picture of how you solve the problem.  In my case I know that getting the speaker there is not that big of a problem.  Getting a great speaker in the area of technology is a bigger problem, but not insurmountable.  Getting a speaker that can move 5o executives to take action is a giant hurdle.  Most technology speakers are there to tell you what they know, not move the audience to buy.  And finally, who knows how to get 50 executives into a room in the first place?  I do.  Understanding his pain allowed me to explain where his upcoming event was likely to go wrong, and then show how I was going to solve the problems he was about to face.  His free speaker can’t do that.  What’s the value?  If only ten percent of those executives buy projects or managed services, he’s up many thousands, hundreds of thousands, maybe even millions of dollars, depending on the kind of event he is hosting.  So what’s that worth?  A lot!

What are your solutions worth?  I don’t know…what problems are you solving?

© 2010, David Stelzl


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