5 Tips for Handling Pricing Objections
One of the most difficult aspects of business for many freelancers is the pricing of projects. While some designers offer package-based pricing, most will have to provide a custom quote for every new client. Making an accurate estimate as to how much time will be required is often a challenge, but for many freelancers what is even more difficult is closing the sale and getting the client to commit by signing a contract and agreeing to the price.
By nature most designers are not interested in sales, but it is a necessary part of being a freelancer. Of course, the more demand you have for your services the easier it will be, and the less pressure you will have to land each potential client. But in reality most freelancers today are not in a position to lose out on projects if it can be avoided.
In this industry pricing objections from potential clients are relatively common. Maybe the client doesn’t have much knowledge or experience in the area and they have unrealistic expectations of what is involved in the process and how much work is required. Or maybe they have a friend or family member who claims they can get a website for much cheaper somewhere else. Whatever the case, freelance designers never enjoy dealing with pricing objections.
In this article we’ll look at a few key things that you can do when you are in a situation where a potential client is hesitating to move forward due to price. While there will always be some clients who expect a top notch website for a bargain basement price, most clients are very reasonable and effective communication can often lead to some way to come to an agreement.
1. Break it Down
Rather than presenting a client with a quote that shows only the total price and a few bullet points about what they will be getting, go into more detail and break down the process step-by-step. A total dollar amount can seem very overwhelming if it is more than a client was expecting, but with some detail that explains what is involved and what they are getting for that price, the same price may seem quite reasonable to the client.
You can start by breaking down the project into various stages. If you haven’t already gone over your design and development process with the client this is a good opportunity to show them everything that you will be doing. If the project involves mood boards, wireframes or other preliminary steps, break it down to estimate the time that will be devoted to these steps and assign a dollar amount to it.
Moving on, you can also break down the steps for the design work, coding, feedback and revisions, testing and launching of the site. Every step of the process can be documented, with a time requirement and cost estimated. This can help the client to get a more accurate idea of everything that is going in to the project and how the time needed for each step is impacting the total price of the project.
If you’re able to speak with the client when presenting the proposal, as opposed to simply emailing it, you can also take the time to explain why the various steps or stages of the process are critical to the overall success of the project. Many clients will not be experienced with going through the process, so they may not see a need for some things, which means you will need to show the significance if they are going to be willing to pay for it.
In addition to breaking down the steps of the process to show how the final price was determined, you can also break it down to show the payment in installments. You should always be getting a percentage of the payment up front, and depending upon the size and timeline of the project there may be other milestones at which a payment will be due. Rather than seeing one large payment amount it may help the client to see it broken down into several smaller payments and when they would be due. Particularly if the project has a longer timeframe, having several smaller payments can make a big difference on the impact of the price to the client.
2. List Everything that is Included and Emphasize the Services that You Will Provide
Many clients like to compare prices from one designer to another. The problem with this is that it is rarely an apples-to-apples comparison. To help the potential client see the value in your proposal, be sure that you are listing everything that you will be providing. Will the project involve custom graphics? Custom icon design? A unique blog theme or customizations to an existing one? Will you be setting up email accounts for the client? Will you set up analytics, plugins, automated backups?
When the proposal includes everything that you will be doing for the client it does a better job of showing all of your work that will go into it, and there is greater justification for the price. If the potential client takes that proposal and compares it to another designer that has not listed everything that is included, yours will look much more complete and thorough.
3. Offer Options
One of the best ways to overcome pricing objections is to offer a few different levels of service that the client can choose based on their needs and budget. If they can’t afford your normal service with all of the items included, they can always opt for your lower-priced option that may not include as much but would still allow them to work with you.
Offering various options may not always be possible, but in most situations it is appropriate. For example, your low price option may include customization of a template or themes (could even be one that you have developed) rather than a full custom design. Or maybe instead of including custom icon design in the project the lower-priced option could include buying stock icons or even using free icons.
Providing options puts the client in control of what they spend, and reduces the risk that they will simply say they cannot afford your work and move on to another designer.
4. Explain the Risks of Going with a Low-Budget Option
Whether you are offering multiple options or just one, the client who is objecting to the price should be aware of the potential dangers of going with a low-priced option. When clients are not experienced with web design or development they often don’t fully understand what the difference is between your proposal and what they would be getting if they hire the designer who gave them a lower quote.
Cutting corners always involves some risk or loss of potential benefit to the client, so make sure that they are aware of the potential impacts of choosing a lower-priced designer. Will the designer offering a lower price do the necessary preliminary work to ensure that the site meets the needs of the business and its visitors? Will they be risking having a site with an e-commerce system that is not user friendly? Will they be left without a designer who is willing to work with them on an on-going basis when needed?
5. Have Flexibility When Appropriate, but Don’t Seem Desperate
There are situations when it may be justified to reduce your price after communicating with the client in order to secure the business. However, you shouldn’t simply drop your price because a potential client objects to the price, nor should you drop it significantly without some adjustments to the scope.
If you quickly respond to the client’s price objection with a lower offer for the same amount of work you will be setting a dangerous precedent that can carry over as long as you are working with that client. Rather than putting them in total control, work on finding a compromise that will keep the price within their budget while reducing the amount of time required from you.
What’s Your Experience?
How do you deal with pricing objections? Feel free to share your experience or advice in the comments.