When I first started working with this particular tradie client, he used to get frustrated with clients who compared price. Over the years we have tackled various parts to this and I wanted to share with you some of the discussions we have had.
Before I get into it, I want to let you know that I am a price comparer. It was drilled into me as a public servant, minimum 3 quotes. This is particularly true if I have never used a particular service before, otherwise I am a loyal customer. I wanted you to know that I do understand why people get quotes.
In this article, I will use our drivers (fears, needs, beliefs, values, goals) to outline why clients compare prices and why we react in certain ways – all based around the relevant driver. The key is to acknowledge that this is how your industry and even your business is perceived. It’s a barrier to market and you can either ‘ignore’ them knowing that you will likely lose clients or work to overcome these barriers.
FEARS and clients who compare price
The most common fear based reason why clients will compare price is the fear of being “ripped off” or paying too much. Some will admit it and others will not.
Another fear is that they won’t get the same quality, product, or service and will ask for detailed (itemised) quotes.
Business owner fear
The most common fear for business owners is that they will lose the quote. That someone will “undercut them”. Alongside that is the fear that a competitor will end up with their detailed quote, costings, or specs. (and then undercut them)
There is a lot of fear around what is seen as proprietary information and not sharing it with competitors – especially those who are not friends, don’t refer work, or don’t share their values. Very much a dog eat dog mentality.
How to overcome these fears around comparing price
Client fears are best addressed by sharing your reviews and testimonials. I encourage business owners to share screenshots of the testimonials rather than retyping them in graphics as they can lose authenticity. Authenticity is important when you are using a review to overcome a fear or objection. Choose reviews that specifically address the common fears your business/industry has as barriers.
The next thing you can do is become a mythbuster. Writing blogs, social media posts, newsletters or recording videos that bust the common myths, fears or misconceptions can help build trust and educate your audience.
When my client fears that they will be undercut or lose a quote, I remind them that this is a good thing. A client who is motivated by price, when your business is motivated by service, is not an ideal client. In the quoting process, you should have demonstrated your dedication to quality and service and if the time arises that they need a higher quality solution, they are likely to turn to you.
NEEDS and the clients who compare price
Regular readers will know that I use Maslow’s Hierarchy of needs, those who have worked with me since 2022 will know that I use a modified version by Chip Conley. The difference is that Chip goes on to show the impact or what meeting the need results in. It’s this distinction that I’d like you to keep in mind because in the end, business owners should be considering the behaviour they want from their client as well as meeting their needs.
A reminder of Maslow’s Hierarchy of Needs: Physiological, Safety, Belonging, Esteem, Self-actualisation.
More often than not, your client will shop around based on the physical needs they have for a product or service. (I use the shopping for a toaster example).
In service-based businesses, you may also find the other needs come into play. I am particularly mindful of group services, courses, or memberships. Clients may have a need to feel safe, private, heard, see improvement, or meet specific goals or ambitions. Their “shopping list” may be quite long and will shop around to ensure value for money in completing their list.
Business owner needs
Business owners have a shopping list of needs they want fulfilled when it comes to a client accepting a quote or shopping around on price. I often find that the longer it takes for a client to get back to us, the more our fears are triggered and we move out of having our needs met.
Perhaps you have financial targets you need to meet and that helps ensure your physiological needs are met. Perhaps you’re hoping to bring on a celebrity client and that will meet esteem or self-actualisation needs.
How to address needs when clients compare price
The most important thing is to be aware that your clients have these needs. Make a list of what they are from your conversations when you quote and from their reviews. Use your marketing to show that you know some of their needs and demonstrate how you meet them. Again, your reviews can do this for you.
Setting clear expectations, of both parties, is also a great way to ensure that all parties are aware of the relevant needs to be met.
Unfortunately, there’s no guaranteeing that a client understands their needs or that they stay the same through them shopping around. There has been many a time where businesses have educated me or provided other options as I shopped around. Please know that this is your opportunity to shine and educate your prospective client.
Another thing to consider is how the customer will feel when their needs were met. Including this in your marketing shows a deeper understanding of their needs.
Be mindful of your own needs and don’t hang your hopes on one sale, please ensure that there are other opportunities out there because we don’t know what will happen in the future. (Thanks COVID)
BELIEFS and the clients who compare price
Beliefs are thoughts that we hold as truths and they’re based on our lived experiences. We can change our beliefs, provided we are given enough evidence to do so.
Do you know what your clients’ beliefs are towards your industry and/or your business?
Do they believe that your industry is only in it for the money? Do they believe that people in your industry can’t be trusted? If that’s the case, then it’s understandable why they are shopping around.
Do your clients believe that they could do the job cheaper or for the same price and that they’re just time-poor? Then they shop around on the cost of time.
Do your clients believe in buying local or small?
Business owner beliefs
What are your beliefs when a client is comparing price? Do you believe it’s about you or your industry? Do you believe that the clients are only interested in the bottom line?
Most business owners I talk to believe that a client who compares on price is “cheap” and only interested in price and is likely to find someone to undercut them. (yes, this is also their fear) Some go on to believe that they are likely to lose them regardless. (and are genuinely surprised when the quote is accepted)
How to overcome beliefs when clients compare price
At the very start, and particularly when we know money is tight generally, it’s best to remind ourselves that comparing price is not a personal attack on a business owner, it’s a considered financial decision by a client to not spend more than they need to or can afford.
Again, educating your audience (including mythbusting) around their beliefs about your business or your industry is the best way to address their beliefs. Reviews are a great way to provide a 3rd party endorsement or verification of this.
If you believe that your clients are cheap, then what are the facts around that? Do you attract the price-conscious and no longer want to (change that)? Do you undercut, advertise regular discounts or sales, or somehow promote the belief that price is a key factor in choosing to work with your business? (and do you want to change or accept that) What is your mindset about your worth, value, ability to earn, or money?
One of my clients is certain he will lose a client that shops around on price. I remind him that having a cheap price is not a core belief to his business and that any client who has that core belief is welcome to go elsewhere as he has shown his service level in his quote and they can always come back.
VALUES and the clients who compare price
Values are our compass, they help us set and keep our course. Values are universal & not dependent on our lived experiences. That means we will have shared definitions of them.
A client who shops around on price is likely to have a value of affordability or value for money. They may also value their time, how they earn the money they are planning to spend by engaging your business. They may value quality. They may also value their family if your product or service will impact on them.
Business owner values
My client, when faced with a client comparing price, often questions their value of expertise, quality, and/or affordability. It can also have them questioning how they value their time (as so much time goes into quoting).
How to overcome value issues when clients compare price
Unfortunately, a client that values affordability or value for money isn’t likely to take a business owner’s word for it, we know you have a vested interest in getting our money. Again, reviews and testimonials will help this. Another way is to not make a lot of your marketing to be around price. If the majority of your marketing is about your price, then that’s what you’re training your audience is important to your business. We teach people how to treat us and what is important to us with how we behave.
Doing our own mindset work and not relying on outside validation of the worth of our expertise or quality of our work means that we don’t rely on our clients to tell us that we do good work. More often than not, my client comments that when their clients are focused on price, then they generally don’t value the expertise or quality of the work. Don’t barter these away in your price.
GOALS and the clients who compare price
I hope by now you can see that there’s more driving a business than just achieving goals. They really are the cherry on the icing on the tippy top of the cake.
When comparing price one of a clients’ goals can be getting the cheapest price, some it’s a decent return on investment, and others it’s fitting within a budget. For some, their goal is to “just get it done”, underpinned with a strong dose of “and money is an object and does matter”.
Business owner goals
The big concern I come across with business owners is achieving or exceeding financial or sales goals. It’s likely to be the first thing that comes into a business owner’s mind when faced with a client comparing price.
Occasionally a business owner will have a goal of working with a particular client or industry and they end up being one that compares on price. This can cause concern, especially when they put a lot of time, effort, and hope into the quote.
How to manage goals when a client compares on price
More often that not, when I (or my clients) take on a client who compares and is highly motivated by price, things go wrong and that client is not an ideal client. So whilst we may wish to achieve financial/sales targets, I have now learnt that this is not the client to do that.
I respect and understand that as a client money and value are important, I can’t spend the same dollar twice and I need to be smart with my financial decisions. I also understand how nice it is to achieve financial goals and milestones. This is why I approach this one with the advice of experience and a word of warning. Proceed a client who is bargaining and comparing price with caution, especially if you want or need the money. My advice to my client is to always let them go and the client can come back to them when they are more concerned with quality or service.
Summary of what you need to know when a client is comparing price
I hope by now you can understand that business owners and clients look at situations from different perspectives (this is not the only case) and that business owners have some responsibility in creating this situation.
There are five main things to remember as a business owner when your client compares price:
- How does your marketing address your clients’ motivators (fears, needs, beliefs, values, goals) or how does it reinforce them?
- Do you have reviews or testimonials that you can use in your marketing to address your clients’ motivators?
- Do you make clear and understand the expectations around the work you do?
- Are you prepared to walk away from a client who is comparing price?
- How is your mindset around pricing?
It can be confronting when clients compare price, please trust that it’s not personal and it does get easier over time.