In a recent phone call, one of the first comments out of the customer's mouth was, “This is easy. It should not take you very long.” What he really meant was, “You will be able to do this quickly so I should not have to pay much for it.”
The first time he said it, I ignored it. I was really interested in what he needed and how I could help. However, the third time he used the word easy, I could not let it continue. I said boldly, “Easy is irrelevant.” Whether it is easy or not, it is still valuable. Which means, it is worth paying money to acquire.
The customer had attempted to do something by himself. He was halfway there and got stuck (lack of knowledge, skill, time, etc.). Since he thought I had overcome this obstacle before, he believed I should be willing to help him for next to nothing.
The Real Question
The problem is he was confusing the ability to implement the solution with the value of the solution. Yes, I have the knowledge and experience to solve his problem, probably quickly. However, just because I have done it before does not mean I am willing to do it at a low price.
I have something he wants, the result of implementing the solution. He may think what he wants is the solution, but it is really the result he values. And, he has something I want — cash (price).
First, I want to understand how much value a customer will receive from the solution, the result. Then I can decide what a fair price is for the result (value) he will receive. Unfortunately, this customer (and others like him) will probably reject this idea.
The Real Answer
There is a false belief at work here. The customer thinks the input (time) is how to judge a fair price. And why not? This is how accountants, graphic designers, lawyers, web developers and the like have priced services for years.
False! The amount of time it takes to do something is irrelevant.
The amount of time it takes to do something is irrelevant.
What is relevant is the value it creates for the customer. Determine what the value is together with the customer, and then set a fair price. For example, if the result will create $25,000 value for the customer in 12 months, then a price of $5,000 is fair. Who would not spend $5 to make $25?
This is a huge mental shift for many customers and professionals. Customers have been taught by professionals for years that the way to price something is by the number of hours it takes. Professionals have been taught by their professors and colleagues to determine what their hourly rate is.
The phase “mental shift” is another way of saying belief. Changing beliefs takes effort and courage. First, the professional must invest the effort to believe how long it takes is irrelevant. Then, the professional must have the courage to challenge, professionally, the customer's belief.
Question: How would you confront a customer the next time he says, “This is easy. It will not take you very long?” You can leave a comment using the form below.