WHAT YOU CAN DO IF DIFFICULT PRICING CONVERSATIONS NEVER HAPPEN IN YOUR BUSINESS
The hardest changes to make in a business are the ones that involve people.
Dealing with team members, dealing with clients, dealing with the emotions that come with human interactions and the assumptions we make about how they’ll go.?
At GoProposal I’ve seen a lot of attempts to implement change in this area with what I think is one of the more difficult business interactions; having conversations with clients about fees.?
There’s a genuine fear of how these conversations will go;
What about when they say 'not a chance'?
What about when they tell us our service is nowhere near worth that?
What about when they ask how we’ve got the audacity to increase their fees?
What about when they flip the table or launch their laptop across the room?
And when it comes to trying to implement change like this, the biggest mistake i’ve seen is sticking the blinkers on, looking only at the sunny side of the situation and pretending the harder side doesn’t exist.
People attempt to chuck ideal outcomes at the problem with stories of when they’ve achieved great things and the conversation went exactly how they wanted:
‘No don’t worry about it, I had a conversation with X about their fees, increased it by ￡12,000 and they shook my hand and gave me a big hug’
The problem isn’t that the ideal conversation won’t take place very often. In fact from all the responses we’ve gathered from GoProposal members in the past, the most common outcome to fee increase conversations is a variation of ‘that’s absolutely fine’.
The problem is that responding to people’s fears of certain outcomes with stories of the ideal doesn’t give them what they need to tackle what they fear the most, so the barrier remains.?
It remains and they reject the process.?
They look for excuses about why they can’t have these conversations and why the process won’t work.?
The leaders trying to implement the change get frustrated at the gap between the dream of what they wanted to achieve and the reality they see, and the people expected to have the conversations are left unhappier than they would’ve been if nothing changed at all.?
What we’ve seen counter this at GoProposal is just facing up to those worst case scenarios head on and actively planning for what happens when they arise.?
This is the process we’ve seen work best when it comes to making this happen.?
Sell it internally
Transparency with everyone on why these conversations need to take place can seem obvious to some but this step is often missed.?
To get team members to face up to difficult conversations you need to give them the details on why.?
And it’s important to get into the specifics. If you’re leaving over ￡50,000 of profits on the table this needs to translate into things that affect them. This might look like:
‘You mentioned the stress you’ve got managing all the clients at the minute, the only way we can fix this is to get all of them paying us what they should be so we can recruit more staff/pay you more/systemise this process.
If we can sort this out in 6 months we can start recruiting for someone in your team, would that help solve the challenges you’re facing right now?’
?This is something we can all recognise in our personal lives as well as in business. The most disciplined I’ve been with my diet and fitness is when I knew I had my wedding in 8 months time. The most dedicated I’ve been training on my bike was when I knew I was going on a ridiculous cycling trip with my brother who’s way more capable on a bike than I am. It’s nothing new.?
You need to create that same connection in your team.
Get Specific
Facing up to the fear of having these conversations with specifics is probably the most important part.?
If you’re willing to shed light on this with detail you’ll start getting under the skin of what conversations people don’t want to face and what you need to prepare them for.?
If your main priority is to reprice clients you’re undercharging this exercise might look like this:?
This then forms the list of objections you need to formulate a response for as a business.?
So as an example one objection may be;
‘Why are you now basing my Bookkeeping service on transactions when it was always just a set fee before?’
And the agreed response may be;
‘As a business we have to hold our hands up as we have realised our bookkeeping services were not priced sustainably. The beauty of this moving forward is that the price will be directly associated with the work we do for you, and we’ll also have much more transparency of how your business is performing as transactions can offer some great insight into this.’
This can then become a trained response people are prepared for.?
The often overlooked benefit of this is that it removes the personal nature of the conversation. Team members can feel very exposed when they feel personally responsible for a fee change. Having an agreed response as a business can take this burden away as they feel they are representing the organisation they work for, not personally asking the client for more money.?
A similar approach can be used for upselling services, by asking the following questions;
This can then create a more laser focus on who we are going to upsell to, not just asking people to upsell generally.?
Practice with an expert
Whenever I’ve worked with businesses on trying to have repricing conversations it’s never the case that no one in the business is confident with it, it’s always that they want everyone to be able to deliver them as well as 1 or 2 people. It’s a bottleneck issue never a lack of skill within the business.?
Identifying these people to talk about what they often hear as objections, play a difficult client in role playing exercises, and helping people prepare specifically for upcoming conversations?
A great way I’ve seen this delivered in the past is to use the specific objections identified in the ‘Get Specific’ section and role play those specifically.?
Set the agenda
When it comes to how the conversations will run, a clearly defined and agreed process is your friend here. You can find a great resource on this called the bulletproof meeting agenda on our website, which is a great way to start.?
Whatever you choose to develop it should be specific as to why the conversation is happening, what the discovery process looks like at the start of the conversation, and how the conversation will close and be followed up.?
The process here becomes the safety rail people can fall back on when they are feeling nervous, rather than feeling like they have to go into it and play the natural charismatic salesperson.?
Identify the priorities and create a rhythm
All the above steps are about creating a business approach for these conversations. Now you need to get the rubber on the road and start having them.
If you can identify the priority conversations, allocate them to the team member and when the conversation takes place you can create a list of priorities that will keep you on track with how well your goal of repricing all your clients is performing.?
It may be broken down into 3 simple sections:
This should all be driven by a deadline that you set for when they all need to take place.?
Once you have that you can then create a rhythm around this process. A regular agreed weekly, bi-weekly, or even monthly meeting that achieves the following:?
Like everything else in your business you have to inspect what you expect, and this is the best way to do this.?
Where can you trip up?
When it comes to delivering this, there’s always a few things that can trip up the process which you should consider:
That's all I've got for you
None of the above is groundbreaking or particularly different to building out any other process in your business. The challenge is when something involves the emotion of fear we can avoid systemising it and shy away from facing up to it head on.?
If you get a chance to try out any variation of what I’ve outlined above reach out to me, I’d love to hear how it goes for you.?