discuss value

Focus On Value And Not Price Haggling

When I first started out as a designer, I didn’t understand the place of quality, brand differentiation and more. So, I spent time haggling with clients over prices.

I would say, for example, the fee was 2,500 Naira for a logo and someone would say, “let me pay 1,000 Naira.” I would then say, “no, it is 2,500,” and then we would have this back and forth on the cost. I would many times gradually shift my fee downwards and they would steadily raise their offer upwards.

We would be talking about what I thought was business but was actually a devaluing of my brand. Eventually, I would sometimes settle for 1,500 Naira and for me that was a major win. Sometimes, it would be 2,000 or the exact 2,500 I asked for. Again for me, this was a major win. As a rule, many say it is wise to charge a rate higher than you actually do in case your prospective client decides to reduce that fee. That way it can fall within acceptable levels for you.

While this idea has merit, it is not exactly always the wisest approach on its own as it relies heavily on the idea of bargaining over your rates. That is not good. I am not going to bore you with comments about how Mercedes or Lexus car manufacturers do not bargain over their products. For starters, that makes it seem like Toyota car makers do or that people who make keke-napep (tricycles) do so.

Also, that might be far-fetched as you may not yet be offering premium services for a large fee. rather my focus is on the idea of bargaining as a whole. It is not as grand as you think it is.

One of the things I teach in my business class is that the moment you spend your time discussing prices and haggling your brand has lost it’s worth in that person’s eyes. They possibly don’t even know per se but it has.

Business is based on value, so focus on having conversations about that. If a logo is made for 2,500 Naira what is the value attached to it? Are you selling a logo or selling something more to people? What is the benefit of having a logo you made? What makes it worth that price?

Today, when someone “prices” my work, I send them a link to my website which contains my portfolio and I also explain briefly the importance of a brand identity or any other project they want me working on.
I explain how valuable it is, what they stand to gain, and this in combination with my experience and will lead to one of three outcomes:

  1. They agree and pay what I ask, either in full or instalments of 70% and 30%,
  2. They go and come back later having saved or acquired what they need to pay or,
  3. They leave and do not return.

 

Business is based on value, so focus on having conversations about that. If a logo is made for 2,500 Naira what is the value attached to it? Are you selling a logo or selling something more to people? What is the benefit of having a logo you made? What makes it worth that price?

 

The last group leaves usually because they either feel it is still just a logo or it is such a simple design. In other words, none of these people understood the value of a logo. The only other time people leave is when they feel my rates are not workable for them. Which is understandable.

I may want a Mercedes but i don’t have the cash for it. Doesn’t mean I don’t respect the car or still love and value it. Okay, that was a joke but I am sure you get my point. Your fees will not always be attractive to people no matter how much you explain to them and this is fine. Your clients exist and will get to you in time.

So, here’s my tip for you:
Sit down and draw out a small list of why you sell the product or service you do and what people gain from it. It doesn’t have to be 200 reasons. Three or four solid ones will do.

Put this list on your phone’s notepad and any other device you make use of to communicate with clients. This way, when clients come at you with a view to haggle over your rates, you tell them why those are your fees and what they stand to gain. This also makes you proactive so you do not have to think about it and risk losing a potential sale while trying to figure out what to say and how to say it.

One reason some people never make sales or make poor ones is that they don’t even know why they are selling what they do and it’s value. They simply just sell shoes, bags, chairs, books and other products and services, but are completely incapable of having a discussion on what benefits they bring. If you are one of such people, you need to work on that. Does this mean you cannot ever reduce fees or give discounts? No. But those are not meant to be an everyday thing.

 

One reason some people never make sales or make poor ones is that they don’t even know why they are selling what they do and it’s value. They simply just sell shoes, bags, chairs, books and other products and services, but are completely incapable of having a discussion on what benefits they bring. If you are one of such people, you need to work on that.

 

Do not devalue your brand with arguments on pricing. As I often say to people in business, you’re not selling tomatoes and even a tomato seller has a limit to which she brings down her fee before she sends you away from her stall.

 

Onuora Onianwa

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