A participant in the Spin Sucks Community asked if other agency owners negotiate with prospective clients.
It sparked some great conversation on the Slack channel, so Chip and Gini decided to address the topic on this episode of the Agency Leadership Podcast.
Here’s the original question from an agency owner:
I just finished listening to a podcast and a question popped into my head. I’m still pretty new to this but I haven’t had any prospect or client try negotiate with me yet over pricing. I’m just curious. How many of you when you give a price for services do it anticipating that your client is going to negotiate? If so, how do you do this? Start at a certain percentage above what you know line is?….
Chip’s immediate reply was: “if they haven’t pushed back at all, you’re not charging enough.”
Of course, it’s more complicated than that. You might even say, “it depends.”
The hosts emphasized that agencies need to hold firm on pricing and not allow it turn into a bazaar where everything is negotiable.
Gini explained it this way: “I look at at at it just like you would in a restaurant. You don’t go in and say to the chef, I think I’m going to decide how much I’ll pay for this meal after I eat. It’s not how it works, the price the price.”
Instead, Chip and Gini explained that every adjustment in price needs to have a corresponding change in the scope of work. Otherwise you risk clients feeling overcharged or knowing they can always take advantage of you.
They discuss how agency owners can handle clients who want to low-ball price, when to start talking about costs with prospects, and how to hold firm even when you really want the business.