Referrals and Pricing
A story on referrals and pricing, and how best to refer your fellow professional services providers.
John Ray: [00:00:00] Hello again. I’m John Ray on the Price and Value Journey.
John Ray: [00:00:04] Referrals and pricing. Recently, a friend, I’ll call her Elizabeth, she asked me to recommend two or three professionals in a particular services segment. I gave her three names of individuals who I know do outstanding work. One of them was a professional I’ve known for a long time. I’ll call him William. I’ve worked with William on his pricing, and I disclosed that fact to Elizabeth when I included him on the list of names that I gave her.
John Ray: [00:00:36] Elizabeth also asked someone else, and I’ll call him Bob, the same question, and I found this out because Elizabeth forwarded me what Bob had written about his recommendations. She was confused because Bob had commented that William was probably “less expensive” than the other professionals Bob had recommended. What Elizabeth naturally wanted to know was how William was less expensive if I’d been working with him.
John Ray: [00:01:09] Now, I had to smile at that comment. I told her that Bob, frankly, had no idea what he was talking about, and I wouldn’t have either, for that matter, I told her, if I’d made any comments about William, or anyone else on my list, or Bob’s list, for that matter. Because he recommended him, I assume Bob was trying to help William, but that help came at a cost that Bob didn’t grasp, however. Bob could have hampered William’s ability to land the business because he placed a potentially unfair preconception in the mind of the prospect.
John Ray: [00:01:50] Now, here’s the point. When you refer someone, assuming you really care about them and want to see them succeed, never reference the level of their pricing. Unless you’re sending out their invoices for them, you have no idea where they are on their pricing journey, and it’s unfair to prejudice the mind of the potential client with any of your value judgments about their pricing.
John Ray: [00:02:17] Further, it’s highly unlikely you know the scope of the project the person asking for the referral has in mind. In this case, I had little information on the specifics of what Elizabeth wanted. Finally, I had no sense of how Elizabeth might value the outcomes that William or the others I’d recommended could deliver. I’m 99.9% certain that if I didn’t, Bob didn’t either, yet Bob was providing editorial comment on William’s pricing. If you make any sort of comment on someone you recommend, couch that recommendation solely in the value they provide, reference their quality, their timeliness, their insightly advice, whatever, but just don’t get into their pricing. If you’re really trying to help, don’t be Bob.
John Ray: [00:03:12] I’m John Ray on the Price and Value Journey. If you’d like to connect with me directly, you can send me a note, email@example.com. And past episodes of this series can be found at pricevaluejourney.com. 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 1,100 podcast episodes.