How to Respond to the “What are Your Rates?” Question
It happens all the time: prospects who start a conversation with the “what are your rates?” question. In this episode we offer several suggestions for handling this question.
John Ray: [00:00:00] Hello. I’m John Ray on the Price and Value Journey. So, how do you respond to the what-are-your-rates question? I received a form of this question from a B2B services professional in an email. And in her email she said, “I was thinking over some of the things you said to me at lunch. And you said that if someone asked you about your price right away on the phone that maybe they’ve contacted you because they’ve seen you on the internet somewhere, you mentioned you may not be a good fit.” Well, she continued, “Someone came up to me at a networking event, and introduced themselves, and asked right away what I charge. I know she isn’t a good fit for a few reasons, but I just said similar to what you told me, something to the effect of it really depends on what you need or want and we need to have a conversation.” “What would you have said?” she asked, “in that situation.”
So, first of all, I told her, “You did the right thing. Your gut on this stuff is usually right.” For folks I meet face to face, I just say, “I don’t know what I would charge. We need to have a conversation about your situation and needs, and see if we are a good fit because I’m not a good fit for everyone.” If the client is willing to take me up on a conversation, then I’ll take the meeting, even if I really don’t think that they are a fit. Not everyone would do that, but I will.
First, you never know until you have the conversation, right? They may surprise you. And second, if they are taking me up on my terms, which is having a conversation about their needs, then I need to fulfill my part. I’ll schedule them at some time and place that’s easy for both of us, so that if it’s not a fit, as I anticipate, then I’ve not lost a lot of time.
I told her that her gut is usually right about her judgment, but that’s not always the case. We all make mistakes. Further, even if our initial judgments are confirmed, there’s nothing lost in being kind and meeting with someone who is just starting out in their business, for example, but can’t yet afford your services. This meeting may be an investment in a future client. It could be an investment in someone who will refer you to another client, which just happened for me. It could be that you are just taking a few minutes to be kind, to listen, and to offer a few helpful suggestions to a new business owner. For me, that’s part of giving back.
Now, I also say that no one client of mine has the same price because every client is completely unique with their own needs. And this reinforces the need for a conversation. If it’s someone who’s calling me on the phone, I thank them for calling. And I say, “First, how did you get my name? If you’ve been referred by someone, I want to thank that person.” If they’re a referral, then I need to engage with them and stay on that. We need to have a conversation track with them. Now, if they got my name off the Internet somewhere and their first question is about my rates, my experience is been that it’s largely a waste of time for me to spend much time on someone who finds me that way and calls with a first question of, “What are your rates?” If that’s what that client leads with, then my response is something like, “I don’t know what I would charge until we have a conversation about your needs. First, we need to determine whether I’m even a good fit. And if I’m not, I’ll try to help you by referring you to someone else. If we are a fit, then we can discuss different options. I can offer to meet your needs.”
Now, if the client insists on getting my “rates,” I’ll let them know that they seem to be more interested in a transaction than a relationship. And I invest my time and energy in relationships with clients, clients that are interested in relationships. It’s important for us as B2B professionals to focus on prospects who are willing to discuss their needs upfront and in some detail. You’ll end up with clients whose needs you’re meeting and who are a good fit for you. You’ll also end up working for a price which is appropriate for the value you are providing.
I’m John Ray on the Price and Value Journey. Past episodes of this series can be found on your favorite podcast app. We’d be grateful if you would subscribe to the show on your favorite podcast app. And if you’d like to give me feedback or to connect with me with a note, you can send that to John@JohnRay.co. Thank you for joining me.
About The Price and Value Journey
The title of this show describes the journey all professional services providers are on: building a services practice by seeking to convince the world of the value we offer, helping clients achieve the outcomes they desire and trying to do all that at pricing which reflects the value we deliver.
If you feel like you’re working too hard for too little money in your solo or small firm practice, this show is for you. Even if you’re reasonably happy with your practice, you’ll hear ways to improve both your bottom line as well as the mindset you bring to your business.
John Ray, Host of The Price and Value Journey
John Ray is the host of The Price and Value Journey.
John owns Ray Business Advisors, a business advisory practice. John’s services include advising solopreneur and small professional services firms on their pricing. John is passionate about the power of pricing for business owners, as changing pricing is the fastest way to change the profitability of a business. His clients are professionals who are selling their “grey matter,” such as attorneys, CPAs, accountants and bookkeepers, consultants, marketing professionals, and other professional services practitioners.
In his other business, John is a Studio Owner, Producer, and Show Host with Business RadioX®, and works with business owners who want to do their own podcast. As a veteran B2B services provider, John’s special sauce is coaching B2B professionals to use a podcast to build relationships in a non-salesy way which translate into revenue.
John is the host of North Fulton Business Radio, Minneapolis-St. Paul Business Radio, Nashville Business Radio, Alpharetta Tech Talk, and Business Leaders Radio. house shows which feature a wide range of business leaders and companies. John has hosted and/or produced over 1,300 podcast episodes.