Navigating Price Negotiations: How Designers Can Close Deals with Cost-Conscious Customers
In today's economy, even customers with money are saving costs.
Whenever we send a quotation, they ask to reduce this or add that, leaving designers caught between a rock and a hard place.
But ultimately, no matter how much we want to please the customer, the business must make a profit; we can't be so soft-hearted that the numbers turn negative. Let's look at how, in such situations, we can gently persuade customers to close the sale with a happy ending for both parties.
Don't Rush to Offer a Discounted Price
Customers unfamiliar with standard pricing often come with a number in mind and assume there are plenty of designers out there; your business isn't their only option. If you prematurely offer a discount that's still higher than their expectations, they might quickly shut down and choose someone else before getting to know you better. Therefore, the first step in closing a deal with bargaining customers is to set aside the quotation for a moment and have an open conversation. This increases the chances of making a sale.
Ask What Rate They're Comfortable With
Remember, in price negotiations, start by letting the customer indicate what expense they're comfortable with. This shifts the bargaining power into your hands. Think about when you go to the market and say to a vendor, "Can you reduce it to 300?" The vendor immediately realises you're comfortable with that price and might even ask for a bit more with various reasons, leading you to agree and pay up. Those who understand this tactic usually have the upper hand in price negotiations.
Ask for the Customer's Reasons
This question encourages the customer to open up about where the price is an obstacle. Often, customers with purchasing power don't negotiate just because of the numbers but also consider value for money, work quality, after-sales service, and long-term benefits. Customers with limited budgets or those who rarely use designers tend to negotiate after comparing with others. Once you know their reasons, designers can customise options for the customer.
Highlight Your Own Strengths
When dealing with customers who've seen cheaper design services, showcase your superiority with a niche expertise strategy. Use unique selling points like distinctiveness, experience, portfolio, or a policy of limited clientele. Additionally, if materials or products are involved, share about costs, quality, craftsmanship, and how rare the item is to win over the customer. Assure them they'll get results worth the price, ensuring value for every dollar spent.
Offer a Trade-Off
If you've tried all strategies to highlight your selling points and the customer still negotiates, try a trade-off. Be willing to give up some benefits to secure the new project you want. For example, maintain the original price but add exclusive freebies, discounts for the next round, flexibility in payment installments, quotas for revising work, or special services after the final payment. Offering more than just the product increases the value of the work, making the customer feel important and agree without the designer feeling burdened.
Decline with Reasons
If the customer continues to insist on negotiating to the point that selling would result in a loss, being willing to decline to protect your business interests might be the last option that's not always bad. It's recommended to apologise to the customer politely and sincerely, explaining the factors that prevent further price reduction. Emphasise that good things often come with a price, and offer to extend the time for the customer to decide again. Customers who truly appreciate the value of the designer might come back to pay later.
