Answering the Question, “Is that your best price?”

Sending Out Proposals?

If you're sending out proposals, you likely get back the question about whether what you've sent includes your best price. It's a way of asking, “why are you so expensive compared to all the other quotes I've received.”

There are three things you have to know.

First, you have to know that there will always be someone out there with a cheaper price. If you send out proposals, and others are sending out proposals, you can know, with 100% assurance, that someone else is going to bid lower than you. I once had a competitor who simply told customers that their bid would always be 80% of my bid. Didn't matter the service. They would offer a better price. And to be honest with you, I was never worried. That takes us to the second thing you need to know.

Second, just because someone is cheaper doesn't mean they're offering the same service. I know you're thinking that I'm going to differentiate on quality right now. But I'm not. I'm actually talking about the actual services provided. A competitor loves to keep things at a high level of discussion so that they can offer that lower price. But the moment you list out everything you're going to do, and ask your prospect to get a list from someone else, they quickly notice that your list is longer and more exhaustive. Because you are, after all, an expert. And your list is more complete because of the depth of your experience.

Third, you have to know that your proposals should include three options, not one.  I just did a webinar on the topic of proposals and in it I talk about the need to offer three price points (slides are here). That's how you know you have the best price option in front of your prospect. Because different people want / need different things. Price conscious folks want lower prices. Others want the job done right, and want you to tell them what they're missing. And lastly, some people want results – and are willing to pay for them.

So my strategy when putting together a proposal is to put three prices in front of them.

The first is the lowest price. It says I'm willing to do about 80% of the work they wanted. I pass on saving by also passing some of the work onto their team. Often a customer can have their team do data entry, or some other effort that I can take off my plate.

The second price is the job done right price. It includes everything they asked for plus a bit more, because they always miss something. And that's ok. It's my job to remember it. So it normally comes in around 120% of the going rate. But there's clarity on why I added the things they missed and why they're important.

The third price is next year's results price. It suggests for more money, we can accelerate the results. Mind you, they didn't ask for this. And it's about 200% of the going rate. But the reason is because some people are more than happy to trade money for time. And this option, while not for everyone, is the best price for them.

My Answer to the Question about Best Price

When I answer a question about my “best price,” I do it in three parts. Here they are:

If you're looking for a cheaper price, I'm positive we can get you something that fits your budget. The quote I've put in front of you is where my team does all the work, but we're priced at a premium because of our expertise. And to be honest, if you have a team that can do some of the stuff, we can certainly adjust the quote.

When you are looking at the three options I've put in front of you, I'm assuming that you're asking about a lower price than the middle or higher price. The lower price is our lowest price because it's less work and had you doing a bit of the work. But that's our “budget” option. The middle price is includes what you asked for, plus a couple things that we know you didn't ask for, but you'll need. That third option is, as we mentioned, expensive, but it's only for a limited number of customers who want next year's results in this year. And driving faster results requires a larger investment.

You're likely going to get different prices from others. That's no problem, we welcome the comparisons. The only thing we ask for is to make sure you get a detailed list of what's being delivered for a lower price. We often see lower prices with smaller lists of efforts. This is not the same thing. That's comparing all hotels as four walls, a ceiling and a bathroom. But we all know that the Ritz Carlton and Motel 6 aren't equal.

That's my answer. And it never insults the prospect. It simply highlights the reality of the situation.