Why Explaining Your Prices Undermines Your Leverage with Clients
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- Äas pĆidĂĄn 6. 09. 2024
- #shorts
Explaining your prices undermines your leverage with clients by giving away too much information about your pricing strategy and leaving less room for negotiation.
Instead, it is better to use phrases like "it's our policy" or "that's what we charge clients like you to do work like this" to maintain some level of uncertainty and to leave room for negotiation and value-added services.
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I've said this time and time again. Justifying your price cheapens you. Accept that not everyone is your client.
yeah. that's the point, you are not the customer
đŻâŁïžTrue Facts, Darling đŻâŁïž
I charge myself out at $600/hr for what I do, min 90mins. People ask, "Can I get it cheaper?" "Possibly, from someone else, good luck with how things work out, we charge what we do because we're the best."
I charged double the rate for dog sitting in my area. Most people charges $20-$30/day, I charge $60/day. I treat the dogs like my kids and they jump with joy whenever their owner even mention of going to my place to board then get sad for a day or 2 after leaving. Ended up with a bunch of super well behave, well trained dogs from all the wealthy households in the area. The people who question my prices often had bad doggos that I donât wanna sit anyway. Know your worth and stand by it.
Start charging $120 TODAY. You are worth it.
Cheap people usually have a-hole dogs because they never got properly trained lol
@@richape9288đ damn right
Thanks Chris for this advice
Ya I essentially use the line: we are very proud of our pricing, it is what is required to provide the level of service our customer expect. I find itâs vague enough yet provides people with confidence they are in good hands
Love it
And the level of service is the justification.
Nice
love this! a great middle ground between not justifying your price but giving your potential customer a confident answer
One other thing that can be really helpful is stay focused on project creation, identify customer needs, find solutions to their problems then put a price to deliver exactly what they want. I never discuss budget with customers, itâs much easier to sell your work when you have a project tailored to what people actually need and you can sell it for top dollar.
My proof is in my portfolio.
I recently had a client ask me why I was charging so much more than other freelance video editors.
For me it was simple. I said, âIf you can get the same level of work for a much lower price then you should.â
The reality is that a lot of people care more about their pockets than a higher level of quality. But they will always push their luck.
Freelancers, please, start charging more. Youâre only stunting your growth if youâre winning projects with low pricing.
This answer is really good, thank you
I do a pricing breakdown in my proposals to clients, are you suggesting we donât do this either? Or we just donât explain our price when quoting on a call or in a meeting? If anyone has some insight, Iâd love to hear it!
ââââI don't work with people who don't do price breakdowns if they're more expensive than average.
The guy in the video can afford to do that because he's well known and has many clients.
Don't take his advice seriously if you want to be successful as you grow your business.
Once you get to a point where you're in control and have many customers with a great reputation; then you'll be able to do what the guy said.
@@starterpvck2043 My comment is in response to a client who is questioning my price.
Personally, if a client asks for a bunch of deliverables that tie into the same project, I quote one full price. âThis is what it will cost for me to get this done for you.â
Iâve found that clients who ask for detailed pricing breakdowns will always nitpick at every little cost. And believe me, they will drive you nuts in the long run.
For me, these arenât the type of people Iâm interested in working with.
I want clients who ask me to get something done, accept my price, and smile when they realise the price was worth it.
Itâs worth mentioning that I have a great client base and Iâm not desperate to close every potential client. I can afford to be picky about who I work with.
correct. They don't have money put aside for marketing but act so needy to for services. They have two choices, pay for it or learn to do it themselves.
I feel that I have always been overexplaining myself / Overproofing. Glad to see this clip
My stingiest customers always wanted the best deal, they want something extra thrown in, they want custom this and custom that if you let them they will add work during work and ask of they can get a break on it. Then when the job is done they will ask why you haven't refunded them for the extra bit of material you had after the job.
Don't work for entitled people, even if they are rich they will be that same customer.
I love these kinds of methods.
It shows a lot of confidence in what you are offering!
This is my experience! The more you explain, the more they bargain. Just saying "That's what it costs" (or something like it ) is a good response to filter who is your client and who isn't.
Lol, if someone actually said this to me I'm 100% thinking it's a scam.
â@@user-zk9yr7vc2llose "bad" clients. The cheapest clients are the most demanding.
I would rather look for who can pay my rate than go nuts working with a cheapskate.
@@EjaeA1. ALL clients are demanding. Learn to leet their demands.
2. If someone questions why you charge so much and you have no answer itâs literally just one of two things: a - You have no idea or b - Youâre purposefully trying to overcharge them.
@@afcgeo882thatâs a broke mindset. You would be thrown off my client list & blacklisted quick with that attitude. I can only imagine how annoyingly stingy you are putting in orders. I would never take the time to bargain a sale with someone like you or have any of my employees deal with you.
If you need an explanation on why something costs what it does, you simply canât afford it.. Canât afford steakhouse? Go to McDonaldâs or get in the kitchen and cook. Please stop deflecting on hard working entrepreneurs.
@@afcgeo882 Or C they don't have the money to be working with an expert. I see it all the time.
Yes! You don't have to explain anything. I don't have to prove myself to anyone. My work, longevity in business, rapport with clients, etc., already speaks for itself.
He is so spot on! "You're welcome."
Took me 12 years of running a multi million dollar organisation to learn this lesson. He is ABSOLUTELY right. Especially when he says "it's policy"...just try it. It works. My humble opinion as a small entrepreneur with a long ass way to go. đ
As someone who has helped my dadâs business. The customer donât even care if the your price is priced appropriately they just want to make it lower.
đŻ
Everybody loves your work until they have to pay for it.
@@skillustrates so true. I feel like a good way to counter them would be to ask a higher price then you actually want to charge and when they try and haggle make them feel good and be like âokay you know what Iâll do it for you at this price then.â Makes them feel like they won but you know you really got the price you wanted to charge anyways
@@Crossmainst228 Right. Iâm not a master negotiator yet so I donât know if thatâs best practice, but I can tell you that it has worked for me.
False
You just explained!
While I have a business relationship with my clients I value them enough to provide them with all the info they need to make the best decision.
Because that exactly how I expect to be treated when I'm the customer.
I've got 20 grand to invest in a project I'm always going to choose the one who sees me as valuable beyond the $ in my bank account
Chris Do.. You are the best Sir. I love you. I've learned so much from watching your videos here.
Love from Nigeria đłđŹ
Love it! I learned to talk to leads as if I was a front line employee and take the emotions out of it. âCompany policy,â love it.
Absolutely. Or, "if you have to ask, You can't afford it"!! Period đđđ
Thereâs this but you also need to learn how to handle objections because not all clients/ potential clients are equal.
This also depends on the volume you do, track record and the price tier of an item youâre selling e.g. services, plane, yacht, house, shoes, makeup etc
You donât have to be defensive when someone asks a question because a question is not always an objection.
He wasn't defensive in this example. The point is not to go into a justification mode because then all the clients are going to do is pick apart your reasons. Most clients who have the budget and understand what it is that they're searching for do not spend time trying to figure out why services cost that much. They already know why.
Thank you! My clients love it when I'm transparent with them! They feel respected instead of "this is policy" as a answer. Save those for difficult/rude customers.
Amazing video Chris. This nailed this point home for me. More content like this, love it!â€
I'll be going deeper on this at the workshop Haakon
@@thefutur Ahh wonderful, good that I have a ticket to it then!đđ„đđ»
Straight to the point, thank you - timely video also as I'm currently increasing my coaching fee by another 50% for the next six months ahead. I've never been asked this question directly by a qualified potential client, but I always appreciate an injection of healthy financial mindset. Thanks again, Chris.
If you're not being asked that question then you aren't charging enough.
Truth. I own a services business - when people complain about the price, I tell them "our service and results speak for themselves"
Thank you
This is definitely the best advice I ever heard from Chris. I've used when negotiating with clients, with other companies, and even in job interviews.
I'm always hard set on price (within reason), and deflect every negative comments, and at the end, when I start naming my previous clients, I always ask them if they'd like to call them right then and there.
Since I've started this, I closed really nice deals, and let go of the ones where they didn't value me as much I though I was worth.
This approach seems like a good way to lose a lot of potential clients.
Great advice. It is weird how people working in creative environments are often asked these types of questions, yet in other environments it is basically a given and people dont question it.
Facts!!! Completely undermines what you do and what you offer.
loud & clear.
I find myself doing this because I havenât been creative content longâŠalmost two years. When I hear your group dialog, my mind goes back to my sales background. This is huge component Iâm going to incorporate. Thank You Chris
Very useful content. Thank you and your team so much!!
This guy knows what he is doing and telling 100000 true!!! Don't ever try to prove anything it's just your costs PERIOD! DO NOT LET THEM SET YOUR COSTS! đ
I believe a better response is - âthatâs an interesting view - what makes you feel thatâs expensive?â That creates open dialogue and you might get some insights into what your competition is offering. Quite often itâs not apples vs apples and it is far less dismissive.
And in real life they will then spew bullshit about how they canât afford it, because if they could they would have bought it
I donât agree, you donât have open dialogue when youâre purchasing a $1500 iPhone⊠you just buy it at the price they asked for it
I was talking about services or goods that you can negotiate on
Especially when the client perceives the value to be less
đŻ refusing to discuss the price is not power move and it shuts down communication. Even if you are not going lessen your rate you can still have a productive dialogue and attempt to save the deal.
@@RomeloRomannot true. The pricing for these products are publically advertised and you know beforehand what the cost will be. You simply choose to buy as a priced commodity.
Services are different and negotiable.
I think thereâs a better way to sell yourself when explaining cost-yes I am expensive and you can find someone cheaper and that someone will give you a much lower quality product, so much lower that you might have to come back to me anyway.
Your videos are really helpful. Thank you, thefutur, thank you, Chris!
Glad you like them!
i have a business in a niche area of civil construction for 19yrs i have never done breakdowns. Iv had people say it is required but i always say no breakdowns it costs what it costs to get us to do the job and i still get the contracts. Only thing i will ad is remind them of our 3 yr warranty that is 2 years above industry standard
Chris-this is a new nugget of information that I havenât heard from before from the futur. Great question if it was from the audience.
Iâm sure Iâve said this many times before. You may need to spend more time watching some pro group videos.
I love this stuff. When you are trying to proof anything, you lower your status and authority.
Aaaand I would go look for other providers. If something's expensive, I'll pay for it when I understand why.
Two questions.
1. Which kind of work you're looking for? Is it something you can do but don't have time for it, or if it is something to solve something for you that you can't figure out yourself?
2. If someone explains to you about the why of pricing, but doesn't have previous work and social proof to show, would you consider hiring them?
Best advice ever â
Man your delivery online has changed so much. Im here for it thanks for sharing.
This is really big learning lesson for sure đđ»đđ» because this happens a lot that we always try to explain how we are worth to charge more. May be because of less confidence or self doubt đ but this is really very helpful to look worthy, confident and expert đđ»đđ»đđ»đđ»
I totally agree. I love this explanation, this is what I will say the next time :)
â€. I love this, and I needed it. I also absolutely love that he ends it with, "You're welcome." đ.
Thank you, for real! đđ
Love this â€
This is such great advice and goes against what most people do I feel. Thanks for sharing đ
Thank you!
Thatâs a good advice in any situation in life,donât proof anything and be confident
Iâve recently subscribed to your channel. I think thereâs value in your thinking about backing your own value. But being able to defend that value is important too. Avoiding the difficult discussion can come off as arrogant and may harm the relationship. I think there is a nuance between justifying/vindicating your price versus explaining/substantiating it. I think there is a way to handle this professionally. If the conversation turns to a defensive one then you know that the client has different values and may not be a good fit for your services. But one canât avoid the discussion entirely in my view.
All his advice i use when dealing with anyone from Indiađ
Haha
Because we are price sensetive
But when it comes service, i have seen my own parents being okay for charging more đ
From India
It's true we bargain everytime
But never at MacDonald or any franchise
Cz brand speak for itself
I just got off the phone with some pretty helpful indianese people actually lol
@@mrrohitjadhav470thatâs crazy because they care less about you & give you less quality compared to high value small businesses. Lol
Good. This is an excellent advise even for MSPs (Managed Service Providers)
This only works if you have a sellers market or customers that don't care. Otherwise your potential customers will look for other opportunities.
Some customers just want to haggle. They want a lower price. There are way too many clients on a global scale and away too many projects in this digital age to not have an abundance mindset. If they want to leave, fine. It is better to have 1 $10,000 project than to have 10 $1,000 projects, especially if the effort and quality are the same.
Let them go somewhere else I say my business offers premium services and raising the bar for services I'm the area If they don't like it they can go to a shotty business down the road..
Golden advice!
"Thats what my customers pay me"
I just used the âitâs policyâ the other day for why I would not take less than the posted price at an event. Man wanted his kid (4-5 yrs old) to âbargainâ with me to get my price down. I said itâs not happening because itâs our policy not to ever change prices at a show. I âbargainedâ with her to take the free thing which doesnât draw my inventory down. I offer this free thing to a few customers per show especially if we are slow, never if busy. Anyway he demanded to know why my policy wasnât written down and posted at our event! Funny thing about a business policy. Itâs the evidence of the stuff you canât actually see. The free thing was worth it to me to move them along. Thank you Chris Do! I definitely appreciated this polite dismissal. Iâm glad I had practiced it in my head beforehand, so I was prepared.
Always on point, proof is in the portfolio
You're welcome.
So simple. So true. Thx uncle Chris!
This man is the truth
Also be open to the customer walking away. There are customers that would like an explanation of the cost in order to work with you. There are customers who would love to work with you and won't mind not getting an explanation or proof of concept. They would like you to demonstrate your authority for their own peace of mind. Test out what works for you and see what works for your business.
very smart...even though the potential client is the one who asked, once they get your long-winded answer about the number of staff, offices, cost of living in your area, etc. they are thinking "I don't want to have to pay for all of these things that don't apply to me, I only want to pay for a good result." so you're better off not putting these things in their heads!
I sometimes ask if they want the short answer or the longer answer - and ppl typically like to cut to the chase, therefore đ„đ„đ„. You're also still servicing at the speed that they requested respectfully, of course.
Another perfect loop!
Absolutely loved this
Instead of me saying "it's policy." I would probably say something like, what I am charging you is the industry rate and what you will receive for that is a high quality product/service that is viable and, or durable.
and then how do you respond to: what if it's not high quality?
@@thefutur I could probably say that, generally, people do have different perceptions as to what a high quality product/service is. However, you are being charged for the very best of efforts, time, and care (high quality) that will be generated to help you with your business needs.
High quality is subjective so the moment you try to answer that, you've already lost.
This technique seems to work well in conjunction to other things you'll need to pull it off consistently (it won't work all the time)
- Having consitent lead pipeline so you're not desperate for the sale and CAN afford to walk away
-Having a portfolio that establishes you as a top tier in your field
Those are just 2 things I could think of that would be needed to pull this off consistently.
@@vincentpaula3184 Naturally!
People will want to argue for no reason especially rich people.
Perfect answer
This is the funniest video I've seen in years. IM WEAK đđ if this is a parody you've absolutely nailed it, mate!
Simple but great advice, because once you start explaining why, then people will look for loop holes to pay less or to get their work done quicker.
Anybody who asks why does it costs so much already wants to works with you else they won't even bother to ask. One of my clients recently asked me to share the cost breakup. I asked him would he be comfortable to share how much is he earning? I got the project.
I've been in sales since I was 17; in person, over the phone & online. I'm now 39 & have been watching your shorts for a couple months now, (I think,lol!)... You always have such great tips, methods & perspectives! Also, the way you project your confidence is not overly egotistical. A lot of sales coaches out there have massive egos - I could name a few, but I won't do that here - & you have a sort of confident humility that just shines through.
Kind of cute too, I'm not going to lie, lol
well in some parts you are right. But it's also really cocky and arrogant which wouldn't make me wanna work with a guy. You could say this is the market worth you found out to be fair or something. I agree with the not explaining, just not you did it there đ
Yes, that i can agree with ngl.
If the purchases are done with emotions, then the cocky and arrogant behavior is what would not make me want to buy something.
Took this attitude with a customer, just told today that we lost the business. $2000000 a year, for 5 years. This only works on transactional one-time sales.
Knowing WHEN to use this is probably more important than the technique itself
â@@vincentpaula3184 how do you even know when to use it
You the best, I've learnt so much from you over the years.
If you canât articulate your cost and value then you shouldnât be in sales. Value of rep is one of the most important parts to sales presentations
Boom
Well, freelancers usually don't think of themselves as working "in sales".
You wouldn't make it in a commercial environment, justification is key for finance approvals
We provide a premium service. Or when is the last time you received a premium service for a discount price? What are they going to say?
Thank you!!
Brilliant đđœ đ
You're welcome. Boss. đŁ
I believe he's not focusing on self confidence, this is about the gate keeping for perfect clients who will help your business grow in the future. Clients are not that interested in what your business have to say. Chris is right, save your time n energy. If they seek a solution in desperation, they will find a solver no matter what. It's the "price" they have to pay, to be "helped."
It is what it is.
This was timely, I needed this gentle reminder! Thank you.
Love this
I love Chris! I love thefutur!
"Why does it cost this much?"
"This is how much it costs to work with me"
"Ok bye"
"Ok bye".
Yep or .. well Im gonna get a few more quotes. ..or I'll let you know .. gotta talk to the wife ... Etc ..
It would be bye or ghost in any case
Lol exactly man
He actin like he selling water or oxygen or some chit đ€Ł
Do u really think it was going to anything different if he explained himself? Customers who wonât pay that much wonât pay that much no matter how u explain yourself.
Youâre welcome!
Amazing!!!
Amazing !
âIf your explaining, your losing.â Love this Chris! đ§ đ„đŁđđœ
Love it
I wish I could be mentored by this gentleman.
The way you said" You' re welcome" ...and being serious. When you gave this exemple for sure you were thinking to some clients. For sure đđ. You mimic..đ
Very helpful! â€
I tell people it costs that much because I want clients that are invested! You're paying a premium investment and that means it matters to you and you're willing to make that investment, I'm being paid premium and I'm going to do a damn good job to earn it.
I love his work
Thank you, I needed this. I worked hard for two days on a project for somebody that insisted they would be buying 66 items from me (I told them I have a pop up shop I need to prepare for. I put my own work to the side to do their business work). Spent day and night editing files, redrawing some parts of the files, making mock-ups, doing research, etc. so I could have it done today. Now the check is due, & the owner decides my prices are too high. Iâm doing the average suggestion: 2x for wholesale, 3-4x (Iâm using 3) for personal sales.
Damn, I canât stand clients like that
Have any of you ever had a day in sells? This is why successful companies have sales teams.
Definitely saves a lot of time. If they are going to get cheap labour to do what you do, there is nothing you can say or do to stop it.
Good stuff, thanks Chris Do!
awesome! I loved the confidence!
listen to this guy or that guy⊠but make no mistake
The price of a product is decided by the AGREEMENT of the seller and the buyer
Not one alone but both
You can squawk all day that your product is worth X or Y
Or squawk that you only pay X or Y
But where the rubber meets the road is sales numbers
Exactly. So if this approach doesn't work then it means it is time to improve yourself as a business.
I would not suggest to go downwards for an agreement (like, lowering prices, mental integrity, etc), always put yourself even more higher in terms of quality so that you get agreements while you're growing both financially and skillfully.
Iâve learned so much from you
IT'S POLICY! YEASSSSS!
Ty
Thanks this is what i needed to be told