How do you present the price of your service to your clients?

If we want to charge a “high” price we need to anchor it against the return the client is going to get back.

And, for this, we can use a quirk of how our brains work called “The Primacy Effect”. I used it on my post yesterday.

Whatever our brain sees first becomes the most important thing within that context. In Profit First this is why we talk about Sales – Profit = Expenses, not the traditional Sales – Expenses = Profit. Putting Profit before Expenses makes our brain concentrate on it.

But it also works in proposals.

If you say “the cost is £1000/month” they think “that’s a big number”. But saying “implementing this SEO strategy will increase your sales by £12000/month” you prime their brain with £12000. Then you say “and your investment is £1000/month” they do an instant comparison and see £1000 is low compared to £12000.

There’s no deceit, no manipulation, we’re just making sure the client doesn’t feel unnecessary “sticker shock”. And, when I send a proposal to a client, I get a success rate of 86%.

Check out my post about pricing the other day and see how I used the same principle.

No one will pay that much!

The trouble with raising your prices is the fear that always sits in the back of your head. I really struggle with it. One time I went to type a price on my website and my fingers literally froze. In the end I just left the price unsaid (and then, as ever, marked myself down when writing proposals).

(By the way, if you want a software project, I have strict criteria for the type of work I do and it’s £8000 for a prototype. I don’t actually do much software any more though; I’m all about teaching hashtag#profitfirst – price for that in the comments).

The thing is there’s always someone who will pay the higher price if you understand what they’re looking for. Why do some people have a mansion when a three bedroom semi would do? Why do some people own a Lambo when a Golf GTi is made by the same company? Why shop at Flannels when Primark is down the road?

If you know exactly who you target and what their problems are, you can charge more than everyone else. Because you’re not just selling a service, you are selling THEIR service. One that’s designed exactly for them.

So Step 2 of growing your business is “specialise”. Because it allows you to do better work in less time for more money. And that’s got to be a good thing, right?

How do I write my first proposal?

Congratulations.

You’ve done the hard work.

You’ve found a potential client.

You’ve listened to their needs.

You’ve explained what it is you do.

They sound really interested.

“Send me a proposal” they say.

And you stop dead.

Because you’ve not done a proposal yet.

You’ve never written one before.

What do you do?

The single most important thing to remember is you have not got the client yet. That means that your proposal is a sales document. You are still “persuading” the client that you’re the right person to work with.

And the client is going to be looking for three things:

  • Will you help me achieve my objectives?
  • Will the price you charge be worth it?
  • Are you capable of delivering this project?

So your proposal should not just say “I will build a 5 page website for this price” or “I will keyword optimise your site for this price” or “I will write a Javascript component that does X for this price”.

Because that does not answer the client’s questions.

They don’t want a 5 page website – they want more sales1.

They don’t want keyword optimisation – they want more traffic2.

They don’t want a javascript widget – they want happier customers3.

In all three cases I’ve made an assumption about what it is the client is actually looking for. It’s your job, during the course of your conversations to figure out what their objective actually is.

And then you state that, front and centre, in your proposal.

“The aim of this project is to help Client X achieve Objective Y”

Straight away, you’re answering the client’s question – will you help me achieve my objectives? Yes, it’s right there on page one, paragraph one.

Next, is the price you charge worth it?

Well, if you’re going to help them get more sales, how many more sales do they want? Is it £100/month, is it £1000/month, is it £10000/month?

If you’re going to help them get more traffic – what is that traffic worth? Do 1 in 10 visitors become customers? Do 1 in 100, or 1 in 1000 or 1 in 1000000 visitors become customers? And how much is a customer worth? You can then use this to figure out that if you boost their traffic by 100 or 1000 or 1000000 visitors per month, they are going to make £M in extra revenue.

If you’re going to help them keep their customers happy – what is their customer churn rate? If a customer stays with them for an extra six months, how much is that worth to them in subscription revenue (or however they make their money)?

Because once you’ve got a monetary value, a measure of the difference you’re going to make to their business, suddenly, you’ve got something to anchor your price against.

“According to the projections, implementing this project will raise your revenues by £1000/month”

When you then state that your price is £5000, you’re immediately saying “so you will have made your money back in 6 months” – answering question two.

Now you’ve proven that you know what they want to achieve, you’ve proven that it’s worth their while choosing you – now you just need to prove to them that you can be trusted.

The easiest way to do this is to offer some sort of guarantee.

This might fill you with terror – but remember, you can choose what the guarantee looks like.

So, never pick something that is outside your control. You can’t promise them £1000/month in extra sales, because what if their product is utter crap and no-one wants to buy it? Or a new competitor comes out with something better that’s half the price? Your guarantee just fell through the floor.

Instead, choose something you can control.

The website will be completed, to your specifications, with 3 revisions, within 6 weeks of the contract being signed.

The optimisation process will result in new website copy that reads naturally but has a keyword density of X.

The javascript widget will reduce the customer journey from 5 steps to 1 step, resulting in smoother order processing.

We guarantee that this project will meet the following criteria providing our specialist development process is followed.

And that way, your proposal answers your clients three major questions, puts their mind at ease and makes it easy for them to choose to work with you.

If you’d like to take control of your time, escape the constant firefighting and build a business that works for you, the easy way to get started is to build a 12 Week Plan. My free planner shows you exactly what you need to do.

Download your free planner now

  1. Probably
  2. Probably
  3. Probably