How to have price confidence?
How to be confident in your price, how to know your price is right
when your customer says 'Your price is too high'.
And you don't really, do you?
You don't really know. You put your quote together and your prospective customer
says your quote is more expensive and you've been a whole world of uncertainty.
Or you made a mistake.
'Am I overcharging?' 'Am I being greedy?
I did a video last week where I spoke about this scenario and I talked about
what the possible scenarios could be,
what could actually be happening because there are a number of possibilities? I don't go much into that video.
What I want to talk about today is how to be more confident in your price because one of these
scenarios one of the possibilities is that you made a mistake.
And that's probably the one that weighs on your mind the most. It's probably the first place you got.
I've got it wrong. I'm too expensive and being too greedy.
I don't understand, I've designed it wrong maybe and there's a better way to design it or somehow.
I'm being too expensive
and I'm losing out on business because of it.
That's what you're scared of, isn't it?
So I want to talk about how to be more confident. So I say that your price is actually right
and then you haven't made a mistake and then you're not greedy and expensive.
That actually, what's happening is something else.
When your customer says your quote is too expensive you can confidently say, 'No it's not',
something else is going on here. You can call them they're lying, can't you?
Maybe that's one of the possibilities.
You can get more confident in your pricing,
your pricing accuracy
and your market competitiveness over time as you practice.
The more quotes you do,
the more jobs you win, the more confident you become that you're not too expensive.
You could still be too cheap, that's another topic
but the more jobs you win over time, the more confident you become that you're not too expensive.
And when somebody says 'Hey, too expensive'. This time the more confident you are that that's not the case.
And when you don't mean jobs,
you should ask why. Now there's no guarantee that someone's going to tell you the truth
about why but they might and the more you have asked
when you do lose then you can learn. The first thing to do is keep going, keep practicing, keep trying.
Lose some jobs, win some jobs and learn.
Make mistakes because everybody does and learn from them as well.
The second thing I want to talk to you about is your process, your quoting process or your pricing process.
Now you know you have on and you have a process. You get the drawings or you look at the job
and you go through a process whether you've got it documented and written down and you follow it
and use a checklist or a cheat sheet or a pricing tool to make sure you don't make the mistake
or whether you go through a process in your mind.
There's a lot more informal. You do follow a process to create your pricing.
You can see where I'm heading with this.
I imagined you should have a documented process and you should follow it
and that helps you make fewer mistakes and therefore be more confident that you haven't made a mistake
when your customer says you're looking expensive.
Use your checklist, follow your process, have things documented.
If you have made a mistake, you'll be able to see where it is
which helps you when you're checking and all sorts of things. You can check them as well.
Being processed-driven and systematic on how you put your price together.
My coaching clients do this of course.
It really helps them. It really helps them get the pricing right and be consistent do a lot less guessing
and it really helps them do another thing which is offload
the process of putting a quote together to somebody else
in the business as your business grows. Of course you want to be doing that.
My customers do this. It helps them do both of those things and it helps them be more confident
that would miss something or forgotten something or somehow made a mistake in their pricing.
And I bet everybody watching this video has it some time or another
made a mistake putting a quote together and wish that you have it.
And probably made a mistake putting a quote together
that's because you didn't have a strict enough process that you followed.
There were two things so far. We've got practice and get confident by practicing
and we've got get your process done documented and thorough and systematic.
The third thing here that we've got is to look at your rates.
The way you put a quote or a price together is to get your rates and use your process and apply your rates
to your process to the solution. You get the drawings, you get your ruler
and you work out how many meters it is or how many square meters it is or whatever.
Or you estimated the time and the materials you're going to take and usually break it down into chunks
so it's easy to manage and repeatable.
You have a process and you apply your rates to the process so you can
look at your rates. You can go and check your rates and you can check them
and compare them to your competitors and this isn't as hard or as mysterious and cheating as it sounds.
Bring your old bosses, bring your friends.
I think some of the local competitors and ask them what rates they charge and tell them what rates you charge.
You're not giving secrets away nearly as much as you think you are. The more you know the more they know
the less you're at the mercy of your customers. So you're helping each other.
It's gonna be easy with your mate. It's going to be easy with your boss.
It's easy when to direct local competitors perhaps, they might tell you.
And of course, you can always ring up and get quotes and pretend that you're a customer.
Get your mum to do it or your brother to do it
and spy, collect information that way. People do that stuff. Get yourself an idea
of where your rates sit in the market and get yourself an idea at the same time
as the way your business sits it's in terms of quality, about the quality of the work you do and the service you provide.
Are you cheap and not very good? Are you middle and middle good? Are you expensive
and better than everybody else? Or you somehow stupidly cheap
but still better than everybody else. Get yourself an understanding of that.
Understand where you sit on a price and quality basis.
There's one more thing I ask my clients to do. After practice check your process and check your rates.
Let's look at how profitable your businesses is.
If your business isn't very profitable.
I don't think you're overcharging. It's more likely that you're undercharging.
If you're not making enough money in your business to pay everybody's wages and super
and the GST and all those vehicles, all those overheads and the materials and a wage for you
and a profit then you're not being greedy and overcharging everybody.
We're probably undercharging.
Now something else could be going on and if we did find that that was the case
we'd be investigating more thoroughly to figure out what the problem but
you're giving yourself again more confidence that your not overcharging,
So to summarize, knowledge is power.
When you know, the better you're able to protect yourself
and remain confident in your price when it gets challenged.
Remember that's your job. Your job is to make sure you charg enough to pay all those bills
and all those wages and make a profit.
But more practice and more experience
and more mistakes
helps you be more confident. Documenting your pricing process and following that process and being disciplined
and using a tool so you don't make mistakes helps you become more confident. You've not got it wrong.
Knowing where you sit with your rates and your quality compared to your competition is really powerful
and knowing that lower pricing isn't profitable for you.
Taking that job on at a lower price
is unprofitable work, gives you a lot of power when you're challenged by somebody
because you can say 'No way'.
As usual, the stuff I'm talking about here involves doing some work
so that you're prepared building structure and systems and knowledge into your business to give
you strength and confidence when you're challenged on price.
It takes work, it takes time
because it's what we do in business coaching. Maybe business coaching is right for you right now
And there's a couple of ways. You can investigate further and see if it is
wise to book a ten-minute chat with me where we talk about your business, my coaching and see if it's a match
and whether we want to invest more time. And the other is to come to a Tools Down workshop
and listen to more of my stuff over two-day period and you can book yourself either a 10-minute chat
or you can book a ticket for the Tools Down workshop using one of those links below.
See you later.