This is the fourth in an eight part series on how to resist price concession requests. Each two new tips will be posted each weekday for eight days.
Studies show that 74% of price cuts are started by sales people, not customers. In legal services, that percentage may be much higher! Lawyers agree to discounts on their hourly rates, often without a hint of a prospect’s objection to the hourly rate. Here are some proven strategies for resisting discounts and increasing profits.
7. Offer value added incentives in place of price concessions. Access to special or customized services can tip the balance in some decisions. Instead of cutting price, offer more value in the firm of specialized research projects, customized software or other value added services. Often, what you do to win the client can be leveraged to win other prospects as well. One firm I know addressed pricing pressure by offering access to a proprietary study of wage and hour decisions in district courts throughout the country. The analysis was useful in setting case strategy in each district and proved to be a significant value added service that pushed the prospect to engage the firm.
8. Make price concessions too costly. Price concessions are negotiations. All terms are in play, most importantly those that have already been offered. The costs of providing services are always the fully loaded costs of those services. This means that terms such as late fees, interest on outstanding balances, research fees, unbilled services or meetings, the mix of attorneys and other elements of the original proposal are fair game to re-negotiate.
It goes without saying, if you would like to talk about training your lawyers in resisting pricing concessions, please give me a call. It costs nothing to talk.
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