Many items and services have become more expensive in the last few years. Auto insurance, health insurance, homeowners’ insurance, and restaurant food have all seen turbulence and rate changes.
As a coach, we often run 1:1 and group training sessions where we role-play (“real play”) to practice difficult conversations, such as raising a fee or price increase for your services and products. From medical devices to business insurance, we know firsthand how your wording and approach can make or break those conversations about billing and rates.
Some people will avoid this conversation or approach it with guilt or nervousness.
Some will come on too strong, sound defensive, and lose the customer entirely.
Some will need to build trust and demonstrate value to set themselves up for success.
Some fear negotiation overall due to a lack of formal negotiation training.
Successful Negotiation Skills Are Key
The ability to be fearless, ask for what you want or need, and know your value (or the company’s value to the customer) has a tangible impact on the quality of a negotiation and your long-term success. Also, the company depends on you to help meet the overall revenue goals.
One way to approach a rate increase with a client is to examine your mindset. Your mindset has a direct impact on the quality of your negotiation skills.
Having a mindset for success can be a primary factor in finding mutual gain and making both parties feel respected after a negotiation.
Here are some action items you can do to set yourself up for success when you need to address a price change with a client or customer:
How to Ask for What You Want
- Continuously show the value you provide the customer, not just when discussing money.
- Make your gain their gain; how can you create a win for THEM? (I suggest you ask them this)
- Think LONG TERM, not just one conversation at a time.
- Do your homework/ prework. Don’t wing it.
- Build authentic, trusting relationships. How? Be a good listener, do good work, and be helpful but not overbearing.
- Check your tone (be friendly, not apologetic). Smile. Make sure your facial expressions match your words. Listen for their tone also. Does it match?
- Follow up, get creative, and be ready to find new common ground or even part ways if needed.
Align Pricing with Your Organization’s Strategic Goals
Leadership needs to be aligned on how pricing is meant to support the overall strategy and then communicate this with sales reps and folks having these conversations. Without this alignment, any pricing planning is a wasted effort.
We can all agree that paying more for services and products makes us grumpy, but most customers have become trained to tolerate price hikes. Good communicators can have tough conversations and know they can maintain the relationships they have so carefully nurtured over the years.
