Getting to the bottom line…
Price are you pissing prospects off or giving them exactly what they need? Find out how to answers the price question on the phone and win more business.
Daniel: Welcome to the American Small Business Institute, The Couch. It sort of reminds me, it smells like Daily Show. The Daily Show, we’ve got a couch, and people sit on it. This is a little personal space situation we’ve got going on here.
Stephen Semple: Yeah, you defined the line.
Daniel: Yeah, being on the same couch means there are no real barriers here.
Stephen Semple: No, there really isn’t.
Daniel: I guess that means… oh God. It’s happening. I guess that means it’s sharing time.
Stephen Semple: Yeah. I guess it is.
Daniel: I’m here with Stephen Semple, Wizard of Odds partner and all-around badass, who has something to share with us.
Stephen Semple: Thank you. That’s right. Daniel, I had an experience recently, and I know you have had this as well, so I would like you to share also.
Daniel: Ah, it’s a sharing couch.
Stephen Semple: I’ve been hiring some services recently, you pick up the phone and you call them and you say, “How much is it for X,” and they-
What is the price for x?
Daniel: Oh, no. I know where this is going.
Stephen Semple: What do they immediately say?
Daniel: “It depends.” Or, “We need to know more about your company,” or-
Stephen Semple: And, “I need to-
Daniel: “I need to get back to you.”.
Stephen Semple: Maybe even-
Daniel: Oh, no.
Stephen Semple: … meet with you to discuss your project, right?
Daniel: No, no, no, no. Why? Why people, why?
Stephen Semple: So how-
Daniel: Give us a number.
Stephen Semple: Recently, you’ve written a lot of checks, billed a lot of stuff around here. You’ve been a buyer, you’ve been a person doling out lots of money.
Stephen Semple: How does it make you feel as a buyer?
Daniel: It’s so frustrating when I’m just like, look, I just need to buy this one thing. I’m going to call, “How much do you guys charge for,” that one thing?
Stephen Semple: Yeah.
Daniel: I’m in a hurry. I’ve got five minutes for this conversation. Less, actually, if I’m being honest, because I’m going to call like four other places after this. I got five minutes for all of those calls. I don’t have time to schedule a meeting with you. I don’t care enough.
Stephen Semple: Who’s our absolute best customers? People who’ve got no time and lots of cash, and what do we want to say to them, “I can’t answer your question,” because, what do I need? More …
Stephen Semple: Right. Well, if I’m going to give you my freaking more time, I might as well buy it cheap, right?
Stephen Semple: Yeah.
Daniel: Because time is far more important to me. Or I’ll spend the extra money to not have to talk to you.
Stephen Semple: Right. Here’s what I want the folks watching to understand. This was not scripted. I did not tell Daniel ahead of time what I was going to ask for. I wanted him to share this, because here’s what I want everybody to get.
Daniel: I’m feeling really uncomfortable now, by the way.
Stephen Semple: Your customers feel this way.
Daniel: Yes, they do.
Stephen Semple: Get it through your skulls. Now, here’s what I also understand. You’re all going to go, “Oh, but Steve, my service is different,” because it’s different in every case. Here’s what I’m going to do. I’m going to give you the simple way in which you can figure out how to answer this question no matter who calls. The funny thing is, Daniel, here’s what I’ve started doing with people, who give me that answer. I actually ask them these questions.
Stephen Semple: They say, “Great.” “What’s the most expensive project you’ve ever done?” They go, “A lot. It’s not …” “No, just humor me here. What’s the most expensive project you’ve ever done?” “Great. Describe that to me.” “Awesome.” “No, you’re right. I’m not doing that.” “What’s the cheapest you’ve ever done?” And they’ll go, “Well, the cheapest is not …” “Don’t care. Humor me. Tell me what the cheapest you’ve done.”
Daniel: I got something for 50 bucks from a nephew.
Stephen Semple: Right. They tell you the cheapest. Guess what, folks. They can answer these questions, because they told me the most expensive, told me … I said, “Great.” Most of the people call you. What do you charge and what do you do for them? Well, most people, because I usually find by this time they’re actually dying to tell me the average. They go, “Well, most people …” I say, “Okay, great.”.
Stephen Semple: About, “What do you charge?” “Well, there’s a range.” “Well, what’s the range?” “Well, the range is between” this and this. Thank you. Guess what, when you’re asked that question, say, “The most expensive I’ve ever done a project for is this and included this. The cheapest I’ve ever done it for is this and included this,” but most people-
Daniel: Are somewhere in the middle.
Stephen Semple: … come to me and it’s this price and here’s the stuff they get.
Stephen Semple: Done, question answered. Guess what, every time I’ve done that with people, guess what I figured out? I fit pretty much right somewhere in the average.
Daniel: Yeah, most of us do, if we’re not being assholes about it.
Stephen Semple: Yeah. In fact, if I discover that I’m right at their top end or if I discover I’m right at their bottom end, I’m a little bit nervous about working with them, because actually what I want to be is somewhere in the average. But there is not a business on the planet that cannot answer the question, what is the most expensive, what is the least expensive and what do most people buy?
Stephen Semple: If you sit there, and you say, “Oh no, people, it’s price …” Pull out your accounting, take a look at your billing. What you’ll find is, with all of the businesses, half your billing fits into a pretty narrow [inaudible 00:04:44].
Daniel: There was a car dealership in Austin that I’d worked with exclusively until the last car I got. For four cars, I’ve worked with them exclusively, and it’s because, when I went to them, the first time I went into the place, I said, “Well, what’s the price on that X?” They said, “What does it say on the car?” I said, “Well, it said this number.” He said, “That’s it.” He said, “Is there any …” No, that’s it. “Did you see it on the website?” “Yeah.” “That’s the price. We don’t change any prices at all.”
Stephen Semple: Right.
Daniel: “We don’t negotiate. We don’t discuss.” If you plug that price into Kelly Blue Book, you’ll find that it’s on the lower end of a good quality or a high quality car.
Stephen Semple: Right, but this is the price.
Daniel: But it’s right in Kelly Blue Book. You’ll find it right there. You can go on Craigslist, you might be able to it find cheaper, maybe not as good quality, but we’re not going to discuss it. That’s the price. The only reason you need to meet with us is to figure out how, do you want to pay for it, do you want any extras? That’s it.
Stephen Semple: That’s really interesting. People ask for a price break, not because they need a price break, but what they’ve been taught by the five people that you talked to previously. Is if you ask for a price break, you got one right away, so to be quite frank, if you don’t ask for a price break you’re.
Daniel: Yeah, you ask … Well, and because, how many of us think that if you don’t negotiate, you’re the sucker?
Stephen Semple: Well, because you are, in most cases.
Daniel: Yeah, so you feel like you have to or you’re not proving who you are.
Stephen Semple: Right. When I put a price in front of somebody for my services and they ask for a price break do I know how I answer them? I believe, here’s what I’ll say to them. I’ll say, “Daniel, I believe in treating everybody with honesty and respect, because I’m an up front guy and I think that’s what you want to work with. So when I put a price in front of you, I put the best price I could do in front of you right upfront. So that’s it. That’s the price because I think you deserve to be treated honestly.” Now, how do you come back on that one?
Daniel: Yeah. Okay.
Stephen Semple: Yeah. What do we all want to be done? We all want to be treated honestly, so answer the question and then when you put the proposal in front of somebody, if they ask for a deal, don’t get butt hurt about it, because they’re asking because of the five people before-
Daniel: Because it’s supposedly the responsible thing to do.
Stephen Semple: It’s the responsible thing to do and the five people before immediately rolled over and gave a deal, so you recognize that, if you don’t ask, you’re getting screwed, and then just say, “No, look, this is the price, because we believe in honesty.”
Stephen Semple: There you go.
Daniel: Thank you, sir. I appreciate it.
Stephen Semple: All right. Thanks, man.
Daniel: All right.
Stephen Semple: Pleasure as always.
Stephen Semple: Oh, I crossed the line.
Daniel: You just crossed your line. That’s it, I’m out of here. I’ll see you guys.