How to negotiate and come to a Price conclusion

[nradam123]

I am talking to potential clients and one question where I am not confident is the price.

Recently I wanted to build a website for a dance teacher. She asked me what the cost will be to build her a website. This is via skype chat. And I was like ... "Hmm usually we charge $499 but we can talk about pricing depending on your budget". I am still waiting for her reply.

Another potential client is a doctor. I am pretty sure that he has more paying potential than the dance teacher. So maybe I can charge him $1499 or something, but I am not sure.

How do you think I should approach this pricing issue?
Right now I want to get sales and I want to be as costly as the potential client can afford.

Recommend me a book as well to educate me with the same, that will be awesome

 

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[Guest34764]

How much time and effort will go into each website.

That is how you should base your pricing.It should be on a case to case basis.

499$ Is a good price and I'd expect quite a well made website.

However, if you know that the website will require much more effort then obviously raise the price.

If they give you details and their ideas you should be able to determine how much effort will have to go into the website.

 

[Tapp001]

I'm curious to know how the experts will respond to this question.

I had to choose an hourly rate for myself recently, and I actually did negotiate my Slowlane salary. Both times I ended up screwing myself. When I had a J** interview, they had me set a range and then offered me a salary in the exact middle. Though I was able to kick it up to the higher end I still feel like a fool for setting my range too low. I made a similar mistake this week, doing some tech work on the side. I set my rate, and the other person didn't even blink before accepting; again, too low.

In lieu of actual advice, you may find this Venkatesh Rao article on right-brain negotiating interesting. His theory is that negotiating is less about agreeing on an economically acceptable 'true' price than it is about the buyer's narrative competing with the seller's.

 

[KLaw]

I Totally disagree with all of the advice above. It doesn't mean i think it's bad advice though... do both sites for free. Collect their testimonials. Get their before and after data as it relates to number of customers or potential customers visiting their new website that u built. Be completely transparent with em. U want to solve their problem by building a website that converts customers and help their current customers schedule appts, order scripts, etc... easier. Build a portfolio. Then, command ur price. Jmo.

 

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[nradam123]

I Totally disagree with all of the advice above. It doesn't mean i think it's bad advice though... do both sites for free. Collect their testimonials. Get their before and after data as it relates to number of customers or potential customers visiting their new website that u built. Be completely transparent with em. U want to solve their problem by building a website that converts customers and help their current customers schedule appts, order scripts, etc... easier. Build a portfolio. Then, command ur price. Jmo.

I have already built my fair share of free and cheap websites, its all in my earlier TFF posts.
If I ever do free work again its going to be for a loss lead approach.

@JScott My direct competition charges from $3000 to $8000, its just crazy. Thats the bracket I would like to reach. This is because I am designing a proper website built for a niche market. I know I can reach values like that once I get a lot of customers and I do not care about losing the cheap ones.

Basically my doubt is not to know the price for a website by doing competitor research and all that, but to read the mind of my clients and see how much they are willing to pay. Kinda like what probing questions I should ask to get them to tell how much they are willing to pay. I made a website for my friend recently, so I asked him "Bro, how much are you willing to pay?". he said $XXX and that was acceptable for me. Can I just ask their budget directly to start my negotiation?

 

[KLaw]

I have already built my fair share of free and cheap websites, its all in my earlier TFF posts.
If I ever do free work again its going to be for a loss lead approach.

@JScott My direct competition charges from $3000 to $8000, its just crazy. Thats the bracket I would like to reach. This is because I am designing a proper website built for a niche market. I know I can reach values like that once I get a lot of customers and I do not care about losing the cheap ones.

Basically my doubt is not to know the price for a website by doing competitor research and all that, but to read the mind of my clients and see how much they are willing to pay. Kinda like what probing questions I should ask to get them to tell how much they are willing to pay. I made a website for my friend recently, so I asked him "Bro, how much are you willing to pay?". he said $XXX and that was acceptable for me. Can I just ask their budget directly to start my negotiation?

You said "free and cheap". I never once said anything about cheap. Could be part of ur problem.

 

[nradam123]

You said "free and cheap". I never once said anything about cheap. Could be part of ur problem.

You can be right with this one.

 

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[KLaw]

You can be right with this one.

Awesome. I'm glad u took it like that. Best of luck!

 

[marklov]

It's not what they are willing to pay it's how well your bring across your value.
.
Do the websites you create generate a positive ROI for your clients?

 

[Roli]

I am talking to potential clients and one question where I am not confident is the price.

Recently I wanted to build a website for a dance teacher. She asked me what the cost will be to build her a website. This is via skype chat. And I was like ... "Hmm usually we charge $499 but we can talk about pricing depending on your budget". I am still waiting for her reply.

Another potential client is a doctor. I am pretty sure that he has more paying potential than the dance teacher. So maybe I can charge him $1499 or something, but I am not sure.

How do you think I should approach this pricing issue?
Right now I want to get sales and I want to be as costly as the potential client can afford.

Recommend me a book as well to educate me with the same, that will be awesome

As someone who has been on the end of your sales pitch, I think I'm probably qualified to answer you

First of all your approach is not confident and feels from a client end that you are just fishing and want to charge (as you yourself say) as much as the client can afford.

This is not a good approach, think about it; if you go into a shop and ask, "how much is that?" and the answer is "how much have you got?", would you buy from them?

Of course you wouldn't, you'd be mad to.

What you need to do, is to value your work properly and give examples of what you can do for what price range.

First of all you have to put a cash value on your hourly time; how long does it take you to build a website from a custom theme? How long does it take you to build a custom theme?

Then simply divide that time by your hourly rate and voila! eg. $50 per hour - 10 hours to build from custom theme - $500

That way you can approach with confidence, this is what I do and this is what it costs, THEN if the client tries to negotiate, you have options that you can present.

Please listen to my advice, you approached me for a job I posted and I was VERY put off by your approach, the fact that you're posting here trying to rectify it, means that you are getting something you don't usually get, feedback from a prospect.

Heed it well and good luck.

 

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[nradam123]

As someone who has been on the end of your sales pitch, I think I'm probably qualified to answer you

First of all your approach is not confident and feels from a client end that you are just fishing and want to charge (as you yourself say) as much as the client can afford.

This is not a good approach, think about it; if you go into a shop and ask, "how much is that?" and the answer is "how much have you got?", would you buy from them?

Of course you wouldn't, you'd be mad to.

What you need to do, is to value your work properly and give examples of what you can do for what price range.

First of all you have to put a cash value on your hourly time; how long does it take you to build a website from a custom theme? How long does it take you to build a custom theme?

Then simply divide that time by your hourly rate and voila! eg. $50 per hour - 10 hours to build from custom theme - $500

That way you can approach with confidence, this is what I do and this is what it costs, THEN if the client tries to negotiate, you have options that you can present.

Please listen to my advice, you approached me for a job I posted and I was VERY put off by your approach, the fact that you're posting here trying to rectify it, means that you are getting something you don't usually get, feedback from a prospect.

Heed it well and good luck.

Thanks for the advice and it makes a lot of sense.

BUT

This is what i messaged you -

Hey, I just saw your thread in the forum.

I am a WordPress designer. I can develop as well but I am still learning.
If you want any help don't forget to ask.

Adam

Did you mean about this one?

This was YOUR initial requirement -

Hi I'm looking for a wp developer to partner with, you must be UK (or Europe GMT 0, no more than +2) based for ease of communication and preferably someone with a fastlane attitude.

I don't have a massive budget, but I have plenty of website ideas which I'm going to be bringing online in the coming months.
This one is going to be a casino affiliate site and I'm going to be using an off the shelf theme, I need someone who can customise this theme to the 'industry' standard, basically all these affiliates use a similar look and feel which I want to adhere to.

DM me for more deets.

So if you connect the dots, I wanted the "deets" which you never gave me. With the inputs you gave ("I want to partner with someone on multiple websites") how can i give an estimate? Because you did not have a requirement. From my experience talking to dozens of clients people with loose requirements are bargain hunters who don't value a freelancers time. Personal experience.

With all that said, I like your advice. So thanks.

Please listen to my advice, you approached me for a job I posted and I was VERY put off by your approach, the fact that you're posting here trying to rectify it, means that you are getting something you don't usually get, feedback from a prospect.

You were never a prospect mate. I approach prospects in a VERY different way.

 

[Roli]

Thanks for the advice and it makes a lot of sense.

BUT

This is what i messaged you -


Did you mean about this one?

This was YOUR initial requirement -


So if you connect the dots, I wanted the "deets" which you never gave me. With the inputs you gave ("I want to partner with someone on multiple websites") how can i give an estimate? Because you did not have a requirement. From my experience talking to dozens of clients people with loose requirements are bargain hunters who don't value a freelancers time. Personal experience.

With all that said, I like your advice. So thanks.



You were never a prospect mate. I approach prospects in a VERY different way.

Please accept my humble apologies, I confused you with someone else.

Though strange you never considered me a prospect, I define a prospect as someone who has expressed an interest in my services, how do you define one?

Anyway, like I said, my humble apologies, it was not you, I was getting a lot of similar replies and I confused yours with another.

My advice still stands though.

Plus I was very specific "This one is going to be a casino affiliate site and I'm going to be using an off the shelf theme, I need someone who can customise this theme to the 'industry' standard, basically all these affiliates use a similar look and feel which I want to adhere to."

How much more specific can I get? I mentioned multiple websites, but I specified the job I was interested in right now. The multiple websites bit, was to imply that if I like your work, I will stick with you for my future ideas and plans.

So remember to read job postings carefully.

 

[nradam123]

Please accept my humble apologies, I confused you with someone else.

Though strange you never considered me a prospect, I define a prospect as someone who has expressed an interest in my services, how do you define one?

Anyway, like I said, my humble apologies, it was not you, I was getting a lot of similar replies and I confused yours with another.

My advice still stands though.

Plus I was very specific "This one is going to be a casino affiliate site and I'm going to be using an off the shelf theme, I need someone who can customise this theme to the 'industry' standard, basically all these affiliates use a similar look and feel which I want to adhere to."

How much more specific can I get? I mentioned multiple websites, but I specified the job I was interested in right now. The multiple websites bit, was to imply that if I like your work, I will stick with you for my future ideas and plans.

So remember to read job postings carefully.

Dont apologize to me lol. Its nothing big to deserve an apology.
But yeah you were specific about the requirement, but i thought you will show me a few examples. I am actually a designer and not a developer. My friend needed a affiliate marketing website which i did not take because of the strong developer requirement. He got his order done by someone else for $4000 or something though, so that was a heavy website requirement. Did you get yours done already?

 

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[nradam123]

Thanks for all the answers.
@JScott I got what you meant and I totally agree. But "Loss-Leads" approach is a famous approach in Freelancing (And other businesses maybe) and the idea is - Can you lose a $100 now to make $1000 tomorrow? What do you think about the loss leads approach? Am i missing something here.

I posted this question in a Freelancing group, I got some replies. I hope it helps folks in here who want answers.

My Question was:
If a client ask me "How much are you going to charge me for this?", what is the best way to answer?
I wrote - "Usually we charge $499 for a website revamp but we can discuss the pricing depending on your budger"
What do you guys think about my answer and what would you have answered?

MY FAVOURITE ANSWER

Here's my opinion, as someone who isn't at all competent with the skills you're offering as your service, and who has elected to pay someone to execute them for me.
The "but we can discuss the pricing depending on your budget" would immediately make me lose some faith in your company. Immediate impressions would be, "he isn't getting much business," "he doesn't have much experience," and "he'll take what he can get... he must not be the cream of the crop."
I know it's tempting to make it clear you're willing to negotiate the price- you want her business, and you don't want your price tag to deter her. But as you've made clear, you're already selling your services at a highly competitive rate, and far below market value. You won't be able to take all the projects that come your way without sacrificing reputation and consistency in pricing. You have to learn to be okay with that if you want your business to grow, and to be taken seriously in your industry.

Here are other answers -

FIRST ANSWER

By adding 'but we can discuss the pricing depending on your budget" you are suggesting that what you offer isn't worth $499 because it is negotiable.

SECOND ANSWER

You need to be aware that you can't serve them all. You have your price which is way below market and she needs to be aware of that. And you say that you are doing it for $500 - take it or leave it.

THIRD ANSWER

I agree about staying firm on your price BUT if you REALLY want to work with someone that can't afford it then you have to have a REAL reason to give a discount otherwise you're being unfair to yourself and other clients, for example if they are a charity BOOM discount, for this dance lady perhaps you can FIND a reason for example she gives free dance lessons to underprivileged kids so since she does charity work, you tell her "I'll price you at our charity level and you can repay me the difference in referrals when we give you the value we promise" hope that helps

FOURTH ANSWER

How much value will she get from this? If a website revamp will likely bring in $10k of sales for her, a $1000 investment is a bargain, and $499 is a steal.

FIFTH ANSWER

If this is a friend or family then that's how I would respond. However if it is a regular client that you won't have follow on work with, I would show benefit and state a firm price dictating the level of effort with a disclaimer that renegotiation might be needed if there is delay or snafus that come up. If there is follow on work, then see what you can bundle. For instance could you create an app that would help the company getting paid on time by their customers or send alerts to their dancers? Is there something she is doing manual that with the website revamp she could get it automated?