How to Respond to the "What are Your Rates?" Question
August 23, 2018
Here’s a question I received earlier this week from a B2B service professional:
I was thinking over one of the things you said to me at lunch a few weeks ago. You said if someone asks you about your price right away on the phone you mention you may not be a good fit.
[At a recent networking event] someone came up to me at the end, introduced herself 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 it really depends of the clients wants/needs.
What would you have said in that situation?
Just to clarify, the situation we were discussing over lunch referred to someone whose first question in a call about her services is “What are your rates?”
Here’s a slightly edited version of my response, with some additional comments (and some specifics of her business omitted):
First, you did the right thing. Your gut on this stuff is usually right.
For folks I meet face to face, I say that "I don't know, we need to have a conversation about your situation and needs and see if we are a good fit . . . 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 they are a fit. First, you never know until you have a conversation, right? They may surprise you. 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 not much time is lost.
Yes, 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 initial judgments are confirmed, there’s nothing lost in being kind and meeting with someone who is just starting out with their business, for example, and 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 has happened for me. It could be that you are just taking a few moments 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.
I also say (which is true for me) that no one client of mine has the same price because every client is completely unique with their own needs. That reinforces the need for a conversation.
If it's someone who's calling me on the phone, I thank them for calling and say, "first, how did you get my name? If you’ve been referred by someone I want to thank that person." If they are a referral, then I need to engage with them and keep on the "we need to have a conversation" track. If they got my name from the Internet and their first question is about my rates, then I just go straight to the "I don't think we're a good fit because you want a transaction and I work with relationships" tack.
On the latter, my experience has taught me that it’s largely a waste of time to spend much time someone who finds me online and calls with a first question of “what are your rates?” If that’s what the 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 can determine whether I’m even a good fit, and if I’m not, I’ll try to help by referring you on to someone else. If we are a fit, then we can discuss different options I can offer to meet your needs.” If the client insists on getting my “rates,” I let them know that they seem to be interested in a transaction more than a relationship, and that I invest my time and energy in relationships with my clients.
It’s important for B2B professionals to focus on prospects who are willing to discuss their needs up front and in some detail. You’ll end up with clients whose needs you are 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.