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How you share the value surplus with your customers is key to maximizing your throughput.
Service providers, such as consultants, aim at maximizing the value created through their projects. Their customers would like to keep a certain part of this value surplus with them, and accordingly arrive at the price they are willing to pay.
How do you negotiate the price with the customers? Most service providers try to get a price higher than what the customers are willing to pay and end up in long stretched negotiations. Is it the right thing to do? Or is it akin to killing the golden goose?
My experience suggests that you should quote a price which is slightly lower than what the customer is willing to pay! Sounds counter-intuitive? Let’s see the impact.
The first impact is an instant delight for the customer, as he is saving some money that he was willing to pay. The second impact is getting his confidence that you are reasonable and not here to fleece him. The third impact is even bigger than these two. For all future projects, he is going to consider you as the first choice over all the other options.
This mindset of leaving some extra value with the customer increases the lifetime value of this customer and results in a much higher throughput for the service provider!