By Andrew Neitlich

How to handle a classic objection to value pricing

By Andrew Neitlich

Many of you know that the best way to improve the profits of your Web design/development business is by getting good at value pricing. Value pricing means that you don’t trade time for dollars, but rather explore the value of your solution with the client, and charge on that basis. For more information, check out Million-Dollar Consulting by A. Weiss, SPIN Selling by Rackham, or my manual at itprosuccess.com.

Value pricing is a whole different mindset, and so requires a whole different approach to talking with prospects about what you do. It also means handling a new set of objections.

One of the most common objections you might get is, “Why should I pay so much money when this takes you so little time?”


Let me give you an example from one of the world’s most famous consultants. He shared this story with me when we met for lunch one day.

This consultant has a program where he charges $100,000 to meet once a month for a year with his client, for about half a day per month. The outcome he provides is simple: He will work with his client to change one, and only one, behavior in how that person manages or conducts him/herself at work.

He can get away with this type of fee partly because the Wall Street Journal named him one of the top 10 executive coaches, because he’s a well-received author and speaker, and because he’s done all the other things you need to do to position yourself as a leading expert.

Still, $100,000 for about 6 days of work?

I asked him point blank, “What do you tell prospects who ask you how you get away with charging so much for such a small amount of time?”

How would you respond to this objection?

Answer next time…..

  • simple – clients will make an informed decision themselves

    like one of your previous posts

    q.) what is the right price to charge a client for a product/service?

    a.) whatever the client is willing to pay.

    it’s simple market dynamics – if people are willing to pay 100k for a service – then so be it.

    the amount of time is not what is important – the deliverable is what’s vital

    so, if the service is that valuable – time is irrelevant.

    to pawn a well used but often abused phrase

    “it’s quality not quantity”

  • It all ends up with the same. The customer is paying for your time. What you actually ask is how to charge the customer much more for your time then you currently charge.

  • jason

    i’d like to see some guidelines or tips to sitting down with the client and discussing the value of the solution. i’ll check out those books.

  • Ealameda

    I would guess he points them back to the personal value that they gain for that service.

    Eliminating or correcting one limiting or self-defeating behavior could very easily result in significant financial gain for the client. And at the executive level where he has positioned himself those types of gains are in the hundreds of thousands of dollars.

    So you pay $100,000 for one year, but the end result is that you now earn at least $300,000 more each year for the rest of your life. Faced with those kind of results, the issue quickly changes back to the value that the consultant can bring

  • IlliasD

    I’m guessing he uses risk reversal, putting all the risk on him self, by doing things like no-fee cancellations, money back gurantees and what not.

  • I would have to agree with Ealameda. It’s not the amount of time the they are investing in, it is the perceived results.

  • not given

    Regarding trading time for money, some prominent experts claim you don’t have a real business if you can’t leave it for a year and it still keeps running.

    Ref: Robert Kyosaki, “Rick Dad Poor Dad”
    Ref: Michael Gerber, “The E-Myth” (great book!)

    Just depends on what you want.

  • jgoddard

    easy, I’ve had numerous similar discussions with clients who question me charging “too much” because they can get a web site for $500… you explain the value of your service as opposed to those other guys, I’ve had that talk with a couple clients, and each time the client has still decided to go with me.

    Sometimes it’s good for them to bring it up because it does give them peace of mind about my service… sometimes I add that to the pitch depending on the budget and reactions of the client as well…

    I think you should always justify your price. You can charge whatever you want as long as you can justify it.

  • I would say this:

  • Gil

    Reputation, perceived value, and ROI are what justifies a price based on value. If this coach meets with CEOs of Fortune 500s, then $100,000 is a drop in the bucket compared to the millions of dollars that could be realized as a result of this one behavior change (which, corrected by a leader in the organization, infiltrates and influences the rest of the company).

  • “You’re not paying for 6 days of work. You are paying for 40 years of experience.”

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