Scope and Price
At FrogDog, sales activity composes a significant part of my CEO role.
I often encounter price negotiation.
I’m the straight-shooter, plain-dealer type. I’d rather be frank, up front, and honest from the get-go. I operate with integrity and I honor my commitments. Smoke and mirrors only get business relationships off to wrong starts.
So when people push back on price, I counter: Achieving the stated value of the work outlined requires the stated investment level.
I always give my best price from the start—I don’t inflate numbers. And my company—as with every business—must make money to succeed.
Often, people push back on price just to see what they can get. They feel they have to ask. If a prospect truly can’t afford the investment, we reduce the scope of the effort—and its expected results—to align with its budget when we can. (If reducing the scope of work means a prospective client won’t see enough value, I walk away. I want happy clients and successful work.)
How’d it look if I acted otherwise?
If I reduced my price without reducing the scope of the effort, the prospective client would think I’d given a pie-in-the-sky number in hopes he’d fall for it. Likely, he’ll question everything else I do—and that my team does.
Sounds like trouble, right there.
No one should work with someone who’d do that. (And yes, I point this out to prospects when they try to cram down price without adjusting scope.)
Frankly, I wouldn’t want to be someone like that, either.