Only 15 percent of people buy solely based on price, which means 85 percent of people take price into consideration but it’s not their only or even their most important consideration. The best thing you can do for your practice is identify those true “price shoppers” early on in the consult and quickly refer them to your competitors because they are nothing but trouble.
It’s almost never about the money! When people focus on the price, it’s rarely about the money—it is almost always about your failure to show them enough value. You need to emphasize how the price is reasonable compared to the value you are bringing to the situation.
Be ready to challenge people when they bring up price as a major objection. When a prospect brings up price, especially early on in the conversation, directly ask them, “Is price the major factor in making your decision?” Most will quickly answer, “No, but it is something I’m going to consider.” You can then respond, “Certainly, but what are the other factors you are going to use in determining who to hire as your attorney?”
Once they list the other factors you can use them to show how you can meet or exceed those criteria. If the prospect says, “Yes, price is the most important criteria I’m looking at.” Then you have a decision to make—do you want to be the low cost provider by charging the lowest price?
If not (and I don’t recommend it unless you are truly desperate for business), then respond with something like, “then we are probably not the best fit for you. We pride ourselves on doing excellent quality work at a fair and reasonable price, but if you’re truly only interested in getting the lowest price then I would be glad to refer you to someone else. In fact, I have the names of the three law firms in town who are known for charging the lowest rates. Of course, they also have the least amount of experience and get more than their fair share of client complaints, but here are their names.”
More often than not, people use this objection as a negotiating tactic to see if they can get a better deal. Don’t play into their hands. I like my clients to be on the high side of where the market is priced. You can always negotiate down, but you can never go up.
Is it OK to tell clients “it depends” when they ask how much their case will cost?
Setting appropriate expectations and being transparent about pricing and the expected costs to handle a legal matter is key.
Here is what I tell attorneys: if you ever use the phrase “it depends” in your answer, you must immediately follow up with “and here are the major factors it depends on….” For example, if a prospect asks you how much will it cost to handle their divorce you could say: “Well, it depends and in my experience of handling over 1,200 divorces in the last decade here are some of the major factors it depends on:
Are there children involved and if so, how old are they? If there are young children involved, it usually costs significantly more because of all the decisions that need to be considered along with the emotions surrounding them.
How much conflict is there between the couple? If each side wants out of the marriage as soon as possible, then it can be easier, but if a major fight erupts every time both parties are in the same room, then chances are it’s going to cost a lot more.
Which attorney did the other person hire? Every town has a few divorce attorneys with a reputation for dragging things on forever and needlessly racking up legal bills. If the other spouse hired one of those attorneys, it is going to get messy really quick!
Knowing the factors that typically impact your case fees or settlement awards and being able to articulate them are important when it comes to talking to prospects about pricing and fees.
Want to Learn More? Attend a Rainmaker Retreat!
Pricing strategies is just one important subject we cover during our two-day law firm marketing and development seminar, the Rainmaker Retreat. Here’s what some 2015 attendees have had to say about their time spent at a Rainmaker Retreat:
“Impressive tour de force law firm marketing, from no-brainers to profoundly researched insights. If you leave the seminar the same, there is something wrong with you.” –Kojo Bentsi-Enchill, Energy & Natural Resources, Accra, Ghana
“The most straight-forward, no-nonsense marketing seminar I have yet attended. Colorful, memorable, practical advice, including explanations of the mysteries of the Internet.”-Bill Cook, Solo, Personal Injury, Anchorage, AK
“I was already doing a lot of social media and so I was looking for a few nuggets. Stephen gave us a map to a virtually untouched gold mine.”-Stephen Garner, Solo, Personal Injury, Bremen, GA
Join us at one of our upcoming sessions this summer to jumpstart the second half of 2015:
You can register online for a Rainmaker Retreat or call 888-588-5891 for more information. National Trial Lawyers members receive a discount. Please contact National Trial Lawyers at 866-665-2852 to receive the discount code.