A reader recently wrote to ask if I share numbers (e.g., price estimates) during an initial conversation with a prospect.
I told that them I do not. And except in some unique cases, I strongly recommend against it.
A few reasons.
First, what’s the absolute worst that could happen if you give a price on the spot on the phone?
Well, you could end up…
- Leaving money on the table
- Underestimating the work required
- Ending up with a less profitable project
Not great things, tbh.
So, how do you overcome this?
First, you must never forget ‘The First Rule of Negotiation’: Don’t give out the first number until you have enough information to anchor your price.
That means before you share a price, you want to make sure you have answers to these questions:
- Where do they need help?
- What’s their current situation?
- What outcome are they looking for?
- What are they looking to invest in a solution?
Because until you have a solid understanding of those elements, you don’t have enough information to estimate (e.g., guess at) a price.
And! Even if you’re on your initial call with a prospect and you get all of that information, you still shouldn’t give out the first number on that call.
Not for any nefarious purpose.
Not for any reasons of psychological trickery.
Just for one simple reason: you should think through the project before you give out a number.
- What seems challenging?
- What seems easy?
- What seems risky?
Once you’ve thought through the project and started to understand both what the client is looking for (e.g., their expectations) and what will go into the project (e.g., your work), you can share a price.
At that point, the information you’ve collected will help you anchor your price quotes.