Say the Number Plainly, Then Stop Talking

Listen to an owner say her price and you will hear the floor, or the absence of one. The owner without a floor says the number quickly, with a softening word on either side of it. "It's around five thousand, but we can look at that." "It's normally two hundred an hour, although for you." The number is wrapped in apology before anyone has objected to it, and the customer, who was about to say yes, hears the wrapping and starts to negotiate, because the owner has just told him the price is not the price.

The owner with a floor says the number and stops. Not rudely, not as a tactic, but because she knows what it costs to deliver, what margin the business needs, what her time is worth and how many of these she has to sell this year. The number is not an opinion she is nervous about. It is the output of a model, and she can explain every part of it if asked, which is why she does not feel the need to explain any of it unless she is. Then she waits, and most of the time the customer says yes, because a number said plainly sounds like a number that is correct.

The difference is not confidence in the ordinary sense. I have met confident people who could not hold a price and quiet people who held it without effort. The difference is information. The owner who has done the margin sums knows that the price is fair, knows the floor below which the sale is a loss, and knows that a no at this price is not a disaster because the model says how many yeses the year needs and this is one conversation of many. The owner without the sums is pricing by feel, and feel is negotiable.

I have sat in rooms where the price of a company was being decided, and the same thing is true at that scale. The side that knew its numbers held its position. The side that was hoping gave ground on the first push.

The response has three parts, and the first is to let the model set the price rather than your nerves.

Take the margin sum for the product. Add the margin the business model says it needs. Check it against what the best customers on your list have already paid, because they are the evidence that the market bears it. That is the price. If it is higher than the one on your website, it is higher because the website was priced on the roof. Raise it. The customers who leave because of it were, by the margin sums, the ones the business could least afford to keep.

The second part is to practise saying it. This sounds trivial and is not. Say the number out loud, on its own, with a full stop after it, until it comes out without the softening words. Then stop talking. The silence after a price feels long to the person who said it and normal to the person who heard it. Fill it and you have reopened a negotiation that was closed.

The third part is to separate the price from yourself. A no to the price is a no to the price. It is not a no to you, and it is not a verdict on the business. This is them deciding how to spend their budget, which is their decision, and the model says you need a certain number of yeses, not every yes. The owner who hears a no as rejection drops the price. The owner who hears it as information goes to the next conversation.

One last point, and it is the one that makes the other three possible. Price so that losing any one customer would not change your life. If a single no would put the month at risk, you will never be able to say the number plainly, because too much is riding on the answer. The model tells you how many customers at what price make the business safe, and once you are there, the price stops being a plea and becomes a statement. Tomorrow, the quietest way margin leaves a business, which is the discount nobody asked for.

Continue reading: The Discount Nobody Asked For →

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