On an online business discussion forum someone recently asked how to deal with potential customers questioning the hourly rate.

This was my reply :

If someone questions your rate they are asking for more information about the benefit they will receive for that payment. It’s a request for information.

Imagine them going back to their spouse or business partner and having to justify the rate they are paying you.

Have you provided them with enough short sharp explanations of value so that they will be easily able to defend their payment ?

It’s not a conflict/debate between you and them, it’s them asking for your help in justifying the expense to themselves and others.

There was a psychological study where people’s willingness and satisfaction with allowing people to cut in front of them in a line was measured. Amazingly the reason the person cutting gave didn’t effect the satisfaction of people being cut in front of, but it was crucial that they gave a reason, any reason.

For example, people lining up to use a photocopier were much happier to let someone cut in front of them in the line if the person said “Excuse me, I have to make a photocopy”. Obviously everyone had to make a photocopy, but the fact that a reason was offered is enough to make people feel respected.

If someone questions your rate and you have a well thought out explanation of the value you add, perhaps even an A4 sheet you can hand them that lists the value you offer, they may feel more respected, they may feel more reassured that they are not making a bad decision.

Obviously social proof is another strong reassurance, letting then subtly know that you are working at this rate for others.

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“$90, that’s a little steep”

“We’ve been working at that rate for the last six months. Just so you’re clear on what we’re offering there is a fact sheet listing our service at www.blah.com/facts/”

Or if in person, hand them the sheet
_hand_sheet_

“As you can see we offer a 60 guarantee on the work,

we’re fully licensed with our software so there is no risk of bad stuff getting on your system,

we have extensive experience with problems A, B and C, which looks to be the trouble your having,

and we can start straight away and be back here quickly if anything happens down the track.

We can let you think about it and give you a call in a few days if you prefer”

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If you’re not a web savvy netizen (or is that a net savvy webizen, something like that anyway ) this post may not be for you.  It’s aimed at people familiar with Google Analytics, the free and rather spiffy tool that Google provides for free to webmasters.

Google Analytics makes it easy for a webmaster to know where his visitors are coming from.  Which keywords visitors have typed into search engines, which websites are referring people, which web pages are most popular.

Google Analytics gives the webmaster the ability to make fact based decisions.  He doesn’t have to focus his attention on a particular page or section of his website because he thinks that’s where his audience is interested, he know, he knows for a fact where they are interested because he has the statistics on which pages they visit, how long they stay and where they came from.

The beauty of analytics for websites is that they are essentially free.  Often free in terms of money but more importantly free in terms of time.

Since the data collection is automated the webmaster can simply sit back and let the information accumulate.  In many cases it actually takes more effort to not collect this information since it’s collected by default.

The “brick-and-mortar” business world doesn’t have it so good, not by a long shot.  Asking customers where they heard about your business takes time, recording the answer takes time, collating all the different information from different staff members and different sites takes time and organisational effort.  So most businesses, every though they know they should, do not systematically record the facts about their customer interactions.  This is a real pity because this is exactly the information they need to grow their business.

We created CustomerCradle to try and make it easier for business operators to collect the key information about their customer interactions.

After much discussion and feedback we decided on three key pieces of information.  Where did the customer hear about the business, the Customer Source, how did the staff member respond to the customer enquiry, the Action Taken and finally did the enquiry result in a monetary transaction, the Outcome.

We will talk more about the philosophy of CustomerCradle in future blog posts.  As always, we would love to heard any feedback or suggestions you have.