Do you intentionally make prospects take-it-or-leave-it?
That’s the effect when your professional or business services firm bills by the hour. The client has to take it or leave it.
Whether its design, legal, accounting, finance, safety training, organizational development consulting, communications, conflict resolution, and so on, the client has to say ‘yes’ to the hourly rate you quote and to an unknown final bill.
In fact, hourly pricing objections are so problematic that over 16 million sales experts have posted “How to handle price objections” online.
They know that around 52% of prospects do not take it.
Prospects and clients look elsewhere for a lower hourly rate, or they do without.
You don’t have to live like this.
When my clients adopted IMPACT Based Pricing and used the Choice Framework to make their offers, only about 6% of prospects and clients declined all three offers.
Their data show that when a prospect is offered three options, 72% choose the IMPACT option, 14% choose the IMPACT PLUS option, 6% take the IMPACT Light option and 6% decline all three.
Why does this happen?
Buyers want control.
The less control, the more likely they are to simply walk away.
Whatever they’re currently doing or not doing, they have control over it
In most cases they think “we’re making progress, we’re doing okay.”
Compared to this, your take-it-or-leave-it offer is highly risky.
You do the same when you’re the buyer.
Choice is control
Once you offer choices you have changed the dynamic. Now the buyer feels some kind of partnership with you. They see that there are desirable alternatives to their current situation, and they can choose the one they like the most.
And they get to choose what they will pay because each choice you offer is tied to a fee proportional to the IMPACTs you’ll deliver.
IMPACT Based Pricing is a system
When I began searching for alternatives to hourly billing, 14 years ago, I was focused entirely on the pricing component of conversations with buyers.
Once I’d succeeded in discontinuing hourly billing, I worked to get better at the conversations and proposals that lead to a prospect choosing me as their provider.
I practiced and rejected dozens of scripts and processes for “discovery.”
They only drove a wedge between me and the prospect. They were intrusive, focused on my needs, and always felt like an interrogation.
I also tried using various formats for proposals. One recurring recommendation was to include long lists of what the client would get. One guy told me I need “more meat” in my proposal. As if I was writing up shopping list! I disconnected from him on LinkedIn.
But the end of all this was still a take-it-or-leave-it proposal.
It was up to me to create the system that put the audience first.
That system incorporates the IMPACT Based Pricing 4-Pack.
There are 8 steps.
8 steps that take you from your initial meeting through to the Choice Framework.
It works like this:
Step 1: You begin with the 6 Questions to Find Your Great Fit Clients.
Questions 1 and 2 set a friendly tone and focus on the client.
Step 2: Question 3, the Issue Chart, allows the client to tell you the seriousness to them of the situation.
Step 3: Question 4, the Continuum of IMPACT, gives the client a simple means to describe how significant your work will be to them.
Step 4: Question 5 gives the client the time and space to ask you questions. This is a critical step towards a mutually beneficial relationship.
Step 5: Question 6 gives you the chance to ask about money. It’s so important to read the question carefully and use it as I write it.
Step 6: At the end of the conversation, you promise to send the prospect three offers (using the Choice Framework) within a day or two. You will have what you need to design these offers. I suggest the format is IMPACT, IMPACT PLUS, and IMPACT Light.
Step 7: Write your proposal. It should start with a paragraph describing the current situation, another paragraph recounting the IMPACTs the prospect told you they want. Then make your three offers. Each offer has a fee proportional to the significance of the IMPACT.
Step 8: You close with your terms and conditions, a method for acceptance, and the date for your next conversation.
People buy from people
Remember this, people buy from people.
It’s people who will deliver the life changing differences the client wants.
My IMPACT Based Pricing system and the 4 tools elevate the natural qualities of the people in the conversation, which is you, the provider, and they, the client or prospect.
How much business are you losing with a take-it-or-leave-it proposal?
If you’re uncomfortable even thinking about this, that’s a good sign you know you could do better!
When you can no longer accept losing 52% of prospective business, text IBP to 703-801-0345 or schedule a Virtual coffee.