Pricing to reduce your client’s risks

This week we’ve been talking about the role risk plays in convincing folks to hire an expert firm.

When risks are high (like they are right now), it undermines our ability to give the prospect the certainty that they are looking for, so it might help us to narrow our offering so that we can communicate more certainty, and narrow our target market so that we can be more relevant.

By narrowing your offering and going deep in your target market you’re going to generate the strongest offer you can make. But even with a strong offer, you’re going to have to work harder to get deals to close.

But there’s one more lever you can pull to reduce risk and close more deals.

Create different pricing levels

When you offer different pricing packages in a proposal you can shape an offer that is more attractive to the more price-sensitive buyer, or for the more risk-sensitive buyer. So, for each proposal, offer multiple prices. One that is priced lower – but that removes fewer risks. Another that removes more risk – but at a higher price point.

For example, you could offer three options

  • One that’s priced hourly; the client assumes much of the risk but at a lower (perceived) price.
  • A second that’s priced as a fixed price project with a higher price tag.
  • And a third where you are willing to accept some responsibility for the outcome, that, if successful, would yield you an even higher fee.

This gives the prospect the choice of what risks they want to hedge and for how much money!

“All profit is derived from risk.” ~ Peter Drucker

The increased risks that our prospects are facing in 2020 doesn’t mean that there’s no room for us to make money. In fact, exactly the opposite is true! More risk means that there is more profit available.

The increased risks do make it harder for clients to decide to choose to work with you. So we need to work harder to make it clear what we offer and how it will help. Then provide pricing options that give the clients a way to choose

If you’d like to work on reducing risk for your clients by finding the strongest offer you can hit reply to this email and I’ll schedule a time for us to get on the phone and work through that.

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