We find ourselves in the middle of one of the greatest wealth transfer periods of all time. Those with wealth must decide whether they want to make transfers, and if they do, they must decide how much, to whom, when and in what structure?
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This can cost you money. Here are two common money pitfalls, and ways to avoid them:
You give your expertise away. Your prospective client has an objective: To find what you know, how you can solve his problems and how much you cost.
When you give him this information without payment it’s called free consulting. Many professionals do a lot of free consulting. You find out what the needs of the prospective client are and then say, “Let me tell you how I can fix that for you.”
Then he says to you, “It looks good. It’s one of the best presentations we have seen. You have given us a lot of really good information (the operative word here is given) that I am sure we can put to good use. Write me a proposal and I’ll talk it over with my partners.”
What you don’t know is that the prospect already has several proposals. And, since they all say basically the same thing, one of you gets beat up on price or the prospect does nothing.
You give a price too early. Prospective clients often underestimate their problems. They paint a simplistic picture of what their needs are and say, “Well, I think I’m paying too much. What can you do for me?”
The problem is that you don’t really know how much it’s going to cost until you get in and look. Generally, when you quote a price too early, that price winds up being higher after you uncover the client’s true needs. Then you have the problem of saying to a brand new client, “I know I told you $5,000, but it’s really going to be $7,000 or $8,000.” You gave in to pressure from the prospect to give a number and you came up with one too soon.
Try this instead: “Based on what you’ve told me, it sounds like this may run between $4,000 and $5,000. Now, do you know what my problem is when I give you a number like that? The problem is this is just an estimate. Typically, when I talk to people like yourself, they tell me about A, B and C. Once we get a close look, we find out about D, E and F. Chances are it’s going to be more. So I’ll tell you what: Understand that this estimate is for A, B and C, and that if there are some other things you need, it’s going to be extra.”
Yes, it’s a gutsy thing to say. But you have to remember that your expertise and service are your money in the bank. Don’t give it away. Charge what you are worth, get your price and make it stick.
Bob Bolak is president and owner of Sandler Training in Boulder. He can be reached at 303-376-6165 or firstname.lastname@example.org.