Project pricing is like a balloon in a room made of nails. I’m not sure why such a room would exist or how you would get the balloon in there, but go with me on this one.
On the pricing floor are the rusty nails that cheapen you and let the air out of your credibility or win you projects you can’t afford to deliver. But you’re probably more worried about the needle-sharp nails on the ceiling.
As your pricing balloon drifts higher, it imputes higher value and gives you space to deliver client delight while maintaining a high margin. But a millimeter too high and the balloon pops, making you scream in fright. Or maybe that scream was frustration over losing the project.
How do you position your balloon just a hair below the upper nails? With one, simple question.
I’m assuming that during your discovery process (a.k.a. the Context Discussion) you’re already asking your prospect about her budget for the project. Occasionally your prospect will tell you, but more often she won’t. Either way, there’s a follow-up question that will help you position your balloon.
I suppose you could just ask, “What’s the budget ceiling?” but I don’t. I employ a slightly less direct question.
My follow up question is: “At what price do you have a heart attack?”
Yes, I literally use those words. I’ve settled on the “heart attack” language for two obvious reasons and one hidden, but more powerful, benefit.
The obvious reasons are: 1) it often garners information I need to win the project; and, 2) it’s funny, in a grim way. Prospects always laugh when I ask, which builds rapport.
The more subtle benefit of the heart attack language is it changes the reference price. Let’s say the prospect wouldn’t give you a budget when you asked, but silently she’s hoping your project comes in below $75,000. You ask what price would give her a heart attack and she laughs, thinks for a moment and chortles, “A heart attack? If this came back at six figures, probably my boss and I would both have heart attacks!”
In that brief moment of thinking, your client just told herself in a very real, visceral way, “I would survive as long as the project fees are under $100,000.” And just like that, you have another 30% of room for your project. While other consultants would have punctured their chances at $80,000, you can float a higher-value project with a $98,000 price tag and still win it.
The heart attack question has worked extremely well for me.
Is there a technique you’ve used successfully to avoid overpricing? If so, please share it below in the comments section.
If not, what are your thoughts on adopting the heart attack question for yourself.
Text and images are © 2024 David A. Fields, all rights reserved.