This Pricing Trick Isn't For Everyone
Not every pricing trick will be perfect for every agency. I get that. So if your average project costs less than $10,000 or more than $100,000, this may not help you when closing the deal. But if you're normally putting out quotes in the $10,000 – $100,000 range (which I know is a big range), then here's a trick that I think might help you.
Here's another way to know if this strategy is for you.
If you do a quote presentation, whether in person or over video, this could help you with closing the deal. If you don't “present” your offer and just send things over email, then this might not help.
Why Don't You Present Your Offer?
Now, before I get into this strategy to help you close more deals, I have to pause and ask why you don't present your offers, if you thought to yourself, “Why would I ever ‘present' an offer?”
Let's be honest – you aren't the only one that does what you do. Sure you do it better than a lot of others. And you value trust, integrity, value and quality (but so do a bunch of others).
So differentiation is key. And the way to differentiate (and you know I'm going to say this because of how much I write about it) is with your story. The narrative. That's the most effective way to stand apart.
When you present your offer, you get to set the context. You can tell your story the way you want to (your why, your how, and so much more). You can also start anchoring on your value and why you won't be the cheapest solution that they compare.
All of this is a lot harder to do if you simply send people a PDF with your quote.
The best agencies I know won't give me a price on a project we've talked about without setting up a time to present their offer.
So I suggest, if you're not doing that, that you do. Plus, this next trick only really works if you're presenting an offer – so that's why I'm pushing you to consider starting the habit if you haven't already.
Ok, on to the strategy for closing more deals.
This Trick Isn't New
Sales folks use this in time share presentations.
I have run a conference in Cabo San Lucas for 8 years. And I chose the place where I host it because I've been a member of that time share program for 17 years. Some people hate time share programs. I don't hate mine – but that's mostly because I understand all the different economics involved. I make it work for me. But this isn't a post about time shares.
I mention it because the first time I experienced it was in a time share presentation. And it didn't work on me. But the second time I experienced it in a time share presentation I was more ready for it, planned for it, and made use of it.
Sales folks use this in home remodeling.
Earlier this year I experienced this trick when a remodeling company came out to sell me on replacing all 43 of my windows. They made use of the strategy, and I gladly accepted it.
And again, today, a different home remodeling company sat in my home to quote us on our new master bathroom makeover. They did it again and, again, it worked.
And that's when I realized I hadn't ever written about this pricing trick that can help you when closing a deal.
So What's The Pricing Trick?
By now you're thinking, 600 words and I still don't know what the trick is. Is it making me wait? Creating anticipation? Convincing me that I should pay attention to this trick by highlighting how it's been used before?
Nope. None of the above.
The strategy that can help you close more deals is to have time-sensitive pricing.
What is time-sensitive pricing?
Time-sensitive pricing means you have multiple prices for the work you're going to offer to do. The first price is the normal price. The second (and maybe third) price is what kind of discount you can offer on the normal price, if the offer is signed now – at the moment you're presenting the offer.
What it isn't is a fake special. It's not a gimmick.
You're being up front and direct about the time-sensitive nature of the discount you can offer while you're discussing the opportunity. If not, you revert back to the normal price.
At its core, it's an incentive for the customer to close.
What does time-sensitive pricing look like?
Today's presentation was straight-forward. The master shower project would have a 12-month price (good for 1 year from today when they gave me a quote). There was a second 3-month price (if I signed up any time in the next 90 days). And lastly there was a “while I'm here” price.
Of course the last offer was the best – with a 20% discount.
If your prospect, like me today, has already made up their mind that you're the one they want to work with, the issue is getting them to close sooner rather than later. And this incentive helps them close themselves.
As you see here, you don't just have to have 2 prices (now and normal). These guys had three. But the point of the other two is to anchor me on what “normal” means, which makes the time-sensitive offer look even better.
How does time-sensitive pricing work?
The one thing I haven't mentioned about this strategy is that the 20% discount, in today's example, doesn't mean I'm paying 80% today. It simply says I'm signing the contract today.
You can determine what size of a deposit will work for you. The point isn't the cashflow. The point is closing the deal. Getting someone off the fence.
So today I didn't pay the 80%. I put down 40%. Of 80%. Because I signed today.
Think about how this might work for your next digital project.
You have already done some discovery and estimate that the project is $20,000. Now you go to present your offer.
“Listen, this quote is good for 120 days. It's for the following scope, and the cost is $20,000.
“But if you sign today, I can cut that down to $16,000. That's a 20% discount available now, but only while we're in this meeting. It's an incentive I get to offer, but only when I'm presenting this offer. There's no pressure. Just upside.
“And if you sign today, you only need to pay the deposit of $6,400. Sign today and you save $4,000.”
Like I said when I started, it's not for everyone. But if you're not using this (and you can change the discount to whatever percentage you like, and the deposit percentage to anything you like), you might want to try it. It could do wonders for your close rate.