3 Price Negotiation Tactics When Your Prospect Says “You Are Too Expensive.”

“The economy is bad.”

“The market is too competitive.”

“My clients are asking me for lower pricing.”

negotiation tactics


These are common words my prospective clients typically say before we start talking about pricing.

Do you dread these kinds of conversations?

Of course, you could always lower your product prices just to get in the door. Knowing that your prospective clients are already working with someone else, you might think… “Maybe I could lower my price just to get this business…. I can then increase the price later.”

I made this exact mistake when I started my first sales job. I worked with many agents in South America, and pricing was always their main concern.

Every single day, I would hear the agents complaining about our pricing. After a couple of months, I caved in, and decided to slash the price, knowing that it would upset my manager.

I lowered the price to the lowest in the market. I prepared nice marketing materials and distributed the price cut to every single agents I worked with, including the ones who complained about the pricing.

Did I get any business from the price cut? Zero. Nothing. Nada.

I could not believe it!!! How could this be possible??? After all, these agents kept telling me that pricing is the issue.

Looking back, I was grateful to have gone through that experience. Because I learnt:

It is never about pricing.

Plus, if you ever get a client because of price, this client is likely to leave you when they obtain a better price elsewhere.

Do you want to constantly get into a price talk? 

Since my past experience with not getting the sale after reducing the price, I never made the same mistake just to secure a client. Instead, I began to realize that pricing is never the main issue.

So, what should you do when your want business with a specific client, and they tell you that you are “just too expensive”?

Here are 3 simple price negotiation tactics you can use. 

Negotiation Tactic #1: Is It Really About Pricing? 

negotiation tactics

100% of my prospective clients would talk about price. But, not everyone meant it. What does this mean?

Here are some hidden reasons why people say, “you are too expensive,” or, “we do not have the budget.”

People are always looking for discounts or better pricing, but it might not be their priority, or, it might also be just an excuse for them to stop you from selling to them. Before you try other negotiation tactics, ask this first:

“Hi _____, I understand your concern. You are also a business person, so I know you appreciate that there are costs related to doing business. For me to deliver quality service, there are associated costs involved. I hope you can understand…. (Pause….)

Remember to pause. Pauses give people time to respond. If the person continues to insist that pricing is the main issue, be sure to verify that pricing is the only issue for you to do business with them. 

“Just so that we are both clear, if money is not an issue right now, would you work with me immediately?”

The last thing you want is to lower your price and the prospective client still decides not to work with you.

Negotiation Tactic #2: Give Me More Business. 

I love to attribute high pricing to high costs, because this shifts the focus from you charging a high price to it simply being the cost of doing business.

So, if you have tried negotiation tactic #1 and have identified that pricing is the only issue, then proceed with the second tactic.

Client: “I would definitely work with you if you could reduce your price.”

Me: “I am very happy to hear about this. Since we are just starting to know each other, the quote is based on the short-term project we talked about. I think there is definitely an opportunity to reduce the price if you could ______. 

Then, you can make a price connection if your prospect is willing to:

  • Increase the number of hours they want to work with you.
  • Make a long-term contract with you.
  • Agree to refer you clients.
  • Add another project with you.

This way, the price negotiation becomes a different conversation about more business. 

Negotiation Tactic #3: Talk About Creative Pricing

If after trying the 2 previous negotiation tactics your prospects still insist on continuing the pricing conversation, you need to determine whether you still want to work with this prospect. If the answer is yes, then the next step is to talk about creative pricing.

“Hi Tom, I would be willing to lower the initial cost. Depending on the results, I will be asking for a bonus after the end of our project.”

There are many ways to be creative with pricing. Some examples include:

  • Bonus structure: Receive a bonus based on the performance of the project.
  • Commission base: Similar to the bonus, you would receive additional commission based on pre-determined results.
  • Payment terms: You could discuss various payment terms that could be more advantageous to your business.
  • Referral: You would be willing to reduce the price if the prospect agrees to refer you to more business.
  • Tiered service: You can re-structure your services to offer a lower-priced option to your prospect.


So, are you ready to give this a try?

Next time, be excited when your prospect starts to talk about pricing, and try out some of the negotiation tactics mentioned here. Please make sure to let me know which negotiation tactics worked for you.