When a client Lowballs or underpays...

Any lowball offer that will not increase goes in the trash can for me.
There are enough clients out there willing to pay what you are worth, you just need to look more.

Price is usually never truly the real objection.

You have to make sure before you even get to price, you give benefits and show the value of the deal.

Then even when you get to the point of "negotiations" before you negotiate you restate all the value and benefits they're going to get by buying from you.

I recently watched a video that really hammered this point home when it comes to negotiation.

Grant Cardone Talks Attitude, Approach, and Action with Galles Chevrolet - YouTube

He's talking about selling cars, but just substitute when he's talking about a car to the services you're offering your client.

When selling cars, I know what my bottom number is on a car, I NEVER go to that bottom number. Even when I sold brand new cars, and my sales manager gave me a new number I could go back to the customer with, I still went higher than what he said.

Feel free if you like what you see, to watch the whole thing. It's actually a pretty inspirational video.

I love the points Jason brings up here. I wish more people would go out and learn to sell the right way by selling cars or similar. It is such a great learning environment.

As for price a lot of what you do in these situations depends on how you price.
Are you a one price shop? if you have one price the only way they get a lower price is by getting less. In the car world this is the classic takeaway where you mention how you have that car in the 1LT trim vs the 3LT trim and it is ______ price.

if your prices are negotiable you have built in a certain amount and should know your bottom dollar. Once you reach that number treat it like a one price. If they still want to go lower you will have to take away something.

Finally if you don't wish to take away you can walk away. I've had buyers shocked I was willing to let them walk. It's even more powerful since with what you sell you will be the one leaving. If they truly want it they will stop you.

We've found that when people lowball, it's because they are not ready and are not committed. We don't want to work with people like that. Our pricing is our pricing, and we even do personalized campaigns that are based on what the client needs. There is a certain amount of money you need to start, complete, and carry out correctly, any job you take on. Charge what you need for it, and of course, add in any experience or extras that need to be calculated. If they balk, or lowball then:

1) thank them for their time and welcome them to contact you when they are ready
or
2) offer a lower package that meets their financial needs (don't lower your price, lower your service offering to what their money will buy them).

We have numerous clients that come back weeks or months later out of the blue. Sometimes people just aren't ready, don't have the drive or aren't committed to the process. If that is the case, they will be horrible to work with as you have to constantly drag them along to keep your work going as they are expecting you to produce it. If they aren't invested, we can't make them invested.

Excellent Points. Thank you.

What if the customer was the first one to offer/quote the price?

Is it possible to "negotiate up" ?
Remind him that you will work for no less than ___?
Or is it better to revert to takeaway selling?
What's your deal on this/

The problem here is either a failure of fit with either:

a) need

b) budget

c) personality.

If the prospect really doesn't need what you offer, why should they pay you a lot of money for it? And what are you doing trying to make them buy it?

If the prospect has money problems and can't afford what you offer, or the return on their investment just isn't good enough, why should you take them on as a customer?

If the prospect is simply one of those people who takes pleasure in grinding other people down, why would you want to work with them?

Better to move on, and find prospects who have check marks in these three criteria.

If a prospect offers you a low price and you take it, whose fault is it?

That's right: yours.

I'm not sure why any customer would tell you what they want to pay for your product/service.

I think you mean (and I could be wrong) if they say "I have a budget of 3K for marketing" - if that is the case, then you work within their budget to create something that will do the job. If it costs you more than their budget you let them know and try to work to accommodate their needs, budget AND your needs to carry it out correctly.

I hope that is what you are asking. If someone gives YOU a price after you give your packages/services, then I would thank them for their time and move on, unless, of course, it was in line with what you charge for it.

We do takeaway or we walk and welcome them to return to us when they are ready (refer to my first reply). I don't negotiate up...my prices are set based on years of what needs to happen to get a job done. They agreed to meet with you/talk with you for a reason - they have a need. If they could do it themselves, they would, and sometimes we recommend that...then we hear from them down the road when they realize they didn't know what they were doing and realize the value of what we do.

If you make a quote you have to keep in mind that some people will wanna negotiate the price, i don't know if that is really lowballing.

If i want to have $100 for a job, i give them a price of $120 so there is a little bit room to manoeuvre, if the prospect comes with a counter offer of $50- then i'll tell him that the bottom line is $100 and if he doesn't like it? Fine, there will be no deal than and i'll tell them to move along.

The ball is in their court, and 90 of the 100 they take the deal as they have arranged a discount, they feel good about themselves (especially male clients lol ) , i don't want lowballers and tire-kickers as clients, i have find that this is a good way to keep them out.

Back when I started I hounded each and every prospect and took whatever I could. I was making money, but the business was not that profitable.

I had the short-term thinking of 'make the sale no matter what', it got me started but there was no bigger strategic picture.

The problem with this kind of approach which is that you get a lot of unqualified buyers, people that pay too little, people that don't fully see the value in what you are selling, people that want completely unrealistic levels of support or want everything for nothing.

These days if someone lowballs or gives me a crap offer I qualify them out right away. I don't have the time to deal with these people.

The bigger problem was that I was getting a lot of direct referrals from my low paying customers that were referring other leads of the same quality.

My strategy now is to target only the A* level industries: dentists, doctors, property investment companies, accountants etc.

These people generally won't dick you around, but the one man army HVAC guy? Much more likely to be an unqualified buyer, even if they buy your product.

To me, each acquisition should be adding up to SOMETHING, there should be a strategy behind your campaigns. For me, it's to build up a network and scale my direct referrals, each client you land is worth more than the sum of its' parts.

Humbly, I think you should always know your minimums..........When people lowball you, there is 1 of 2 things happening: Either they don't know their price is unfair, or 2) the most likely thing-they're testing the waters to see what you'll take.

By knowing your minimums you can say what you will and won't go for and it's always an option to take a lower price.

But it's your call not theirs.

2) I think you should know what the market calls for and be able to justify your price if it's significantly higher than most.

You will always hate yourself when you accept less than you should just to get the job. The client will always ask for much more than was promised, give impossible deadlines, call you too much, badger......you know the type.

Hold your ground. Some clients need educating on what a fair price is. When that's the case go for it. Let them know (then put their a**) on a mailing list so when they're actually ready to buy they'll buy from you!

Assuming you're good, remember this:

"The bitterness of poor quality remains long after the sweetness of a low price is forgotten" - Benjamin Franklin.

Also, you're in business to stay in business and you can only do that if
you remain profitable. This was brought up in another thread, but a lot of
offline advice and WSO's don't cover business "stuff" and expenses such as
incorporating, business licenses, quarterly taxes, and insurances. You have
to put that stuff into your pricing and planning as well. Having proper insurance
can open doors for you as well - many government and some organizations
require liability and workers compensation (yes, even for independent contractor
web service providers who mainly work from home) insurance. Also, in case you
ever get sued, business liability insurance and an umbrella policy are good ideas.
(I probably should have broken this into two paragraphs.)

Frankly, cheap/unreasonable clients are a pain in the ass. I fired one
after his true colors came out. He started off nice, then started
questionable actions, and then I coincidentally found out that he
was suing his previous marketing firm.

Dan

Before you negotiate with your prospects about lowering your prices, you need to know just where your price floor is for that particular service. If you go below it, then you will be operating at a loss. As much as possible,you should negotiate so as not to reach that level. You can also offer a lower service or product package, if price really is the point of objection for the prospect.