“We need to make a profit.”
I’ve heard salespeople say these words countless times when negotiating or when dealing with a price objection. They believe that, somehow, their prospective client is worried about making sure that they are profitable. They think that the customer is seeking a win-win, which is true when dealing with mature clients and not so much when you aren’t.
But the statement, “We need to make a profit,” or one of it’s many variations, like “We aren’t a charity,” or “We aren’t a non-profit,” is self-oriented. It informs your prospective client that you are worried most of all about your profit.
Before we go any further, let me be clear that you do have to worry about your company’s profitability. No business is better than business that causes you to lose money. Losing money can cost you the whole game. But you do have to be skillful in how you have conversations about money—and specifically your pricing.
The right answer is, “I am afraid that reducing the price puts the outcomes you said you needed at risk. Can I explain why this is and how we need to make sure we don’t do anything that hurts your results?”
“We need to make a profit” isn’t “other-oriented” language. It is language that suggests that by reducing your price, you have less money to invest in helping your client achieve the improvements they need. And the best part of all this? It’s true.
When you allow your client to underinvest, you do have less money to invest in producing the results they need. Without being profitable, you can’t easily make the investments your client wants, needs, or expects you to make. Right now we face an epidemic of companies underinvesting and failing to generate the results they need.
If you want to protect the margins you need to deliver for your clients, you need to remind them of the risk they take by underinvesting with you—or with your competitors.
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Filed under: Pricing