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The 20 business development pricing tools, truths and techniques 37
6. Don’t fall into the price trap
One of the biggest psychological enemies of all, to you as a business, is to
fall into the ‘price trap’. The ‘price trap’ is the assumption that if someone
asks ‘how much?’, they are only interested in ‘price’ and will make a deci-
sion on that alone.
Indeed, many business people on the receiving end of telephone calls or
e-mails asking the ‘how much?’ question, all too often, actually don’t hear
or see it as ‘how much?’ but ‘how cheap?’. There is a big difference and
processing such enquiries in this way is a money-losing mistake.
I am not commercially naïve. Yes, I know there are some prospective cus-
tomers and clients who will go to huge lengths in order to buy something
a few pennies cheaper. The danger however for businesses is the auto-
matic unconscious assumption that all customers and clients fall into this
category.
Many people ask the ‘how much?’ question for certainty, budgetary plan-
ning and often because they simply don’t know what else to ask. With this
in mind, it is important to understand that whenever you are asked the
‘how much?’ question, it is your business development duty to attempt,
where appropriate, to broaden the discussion and pile on the ‘weight
blocks’ so that it is not totally focused on price.
Here is a provocative notion to play with. If somebody asks you for your
price and you answer with nothing else but the price, it is you who is
potentially forcing them to look for the cheapest.
We will be looking at techniques to deal with the ‘how much?’ question
later in the book. (See Chapters 5 and 6.)
7. Consider increasing your prices
Some years ago I took an unusual phone call for somebody in business development.
The caller said: ‘We would like your help to reduce the amount of business we have.
We have volume, and we are all working tremendously hard, but we aren’t making
enough money.’
After a number of discussions, I simply recommended they increase their fees by
between 10 per cent and 15 per cent. The result, they lost no clients, carried on
working hard but generated signicantly more prot.
With this story in mind, here are a few questions:
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