Pricing Fuck Ups. Ep22. Hope that your price is the middle one. That way, they’ll choose your proposal.
Not too expensive. Not too cheap.
After working on your proposal and sending it — and how “things work” — , you hope yours is the middle one so you’ll come up as the less risky option. Not too expensive. Not too cheap.
The problem? You’re leaving money on the table.
And help getting compared on the ONE THING clients understand: PRICE.
Trying to be the “least risky” by playing in others’ game (and without information). You hope your proposal is not too cheap and not too expensive. That’s the way people choose, right? Not the cheapest, not the most expensive. The reasonable one.
You’re playing blind. And trying to cut down the price so you seem competitive enough.
What doesn’t happen
You don’t stand out, so you can’t be profitable enough (or at all).
What does happen
You’re — consciously or unconsciously — cutting down your prices to “de-risk” your work. It’s all about you, in a set with competitors. You make it easy to be compared with others. Odds of winning: 10%.
You can reframe the game. In your favor. Help them compare you. With you. Present 3 options.
The power of (3) options
1. Makes your prospect compare you versus you.
It goes from “Could Kim help me?”
to “Which of Kim’s options could help me best?”
Buyers understand one thing better than any: price.
Instead of comparing your offer to others based purely on price, they’ll compare the price and value of your options.
2. They build on each other
You have more leeway to present an option focused on major value and two more that take off things as the price lowers. Or, it goes from a more “reasonable price” option to more engagement, scope or value. Frame it as you want
3. Helps making a decision in a simpler way. You give them context.
- One option = Take it or leave it.
- Three options = “How could we make this work?”
Translates into a higher probability to choose you.
Having 3 options leads to choose, usually, the middle one. Not too risky, not too pricey. [aka not too cheap, not too expensive].
If your proposal has those three options, the focus is on the value to be created. It shifts the comparison from price to benefits or outcomes.
They’ll compare your prices starting with the highest one.
5. It avoids the paradox of choice aka analysis paralysis.
More choices means they get too much brain power to use and might get confused. Having more than 4 options is mentally overwhelming. It leads to confusion.
If they’re confused, they’ll leave.
Work on presenting 3 options in your proposals. Set the right context for yourself. Stop playing somebody else’s game (with big odds of losing).
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