While visiting Australia, I passed a dry cleaner in Sydney - and noticed a scary sign (pictured right). "All prices are negotiable," it said . Do you tell your agency's clients, directly or indirectly, that you will lower prices for anyone who asks? Stop selling yourself! You're hurting your own profit margins, and your salespeople are probably doing the same. Let's define "selling to yourself," examine why it's bad, see how you might treat your sales prospects, and review how to stop. I've also included three "before and after" scenarios to illustrate how to fix the problem. What is "self-promotion"? Self-promotion is a sales mistake that hurts your profit margins -- when you voluntarily drop prices without cutting back on the range of what you're delivering. Self-promotion is often a combination of low self-esteem, weak sales improvisation skills, and an inability to actively listen (and bite your tongue). This is the "unforced error" exercise in the version of sales, the mistakes you do n't make, but the easily avoidable mistakes you make. example of self-promotion You're promoting yourself when you tell potential clients that you'll be charging less -- probably less than the minimum budget you know your agency needs to get results for the client. You: "Our minimum participation i
." Outlook: "We want to keep our budget at $10,000." You [knowing that charges under $20,000 always leave customers unhappy]: "You know, we can do something for $10,000." In the sections below, I'll share the "after" version of how to maintain dignity. I learned that a client would offer a "friends and family" discount to just about anyone. He also once gave a non-profit a discount to an organization that was not a non-profit, and the client did what to earn the industry mailing list against yourself" is not a markdown sale -- markdown is an intentional selling technique where you recommend a smaller, lower-priced option because the cheaper option is more suitable. It's also not about choosing to strategically make something for free -- you choose to discount it (and say it out loud) because it helps you too. Why "self-promotion" hurts your profit margins You're lowering prices without cutting scope -- which means you're reducing revenue without reducing the labor involved. No matter which pricing model you use, this is a profit-killer problem: Hourly Pricing: When you underestimate your hourly estimates, you're less likely to do the work you expected. Milestone pricing: When you lower the price of a milestone without cutting scope, you force your team to keep working on the milestone after the budget runs out, or encourage people to take shortcuts on quality. Value-Based Pricing:
In theory, your value-based price is much higher than what you get on a milestone basis, but you could miss out on performance payments...or definitely lose profits with a lower value-anchored price. Your day-to-day choices add up - if last year's net profit margin was below 20-30% and your year-to-date margin is also trending low, it's because you made a series of bad decisions along the way. As an institutional owner, low profit margins are ultimately your fault - but you also have the right to fix the problem. Let's review what the problem might look like and see how to fix it. how you might market yourself today It's normal to feel nervous in a sales environment, but it's dangerous when nervousness leads to abandoning the farm. Don't drop the price right now Here's how instant markdowns work in sales conversations: You: "Our offer is $50,000." Prospect: "Wow, that's a lot of money!" You: "Uh, what if we made $45,000?" In the section below, I share the "after" version that can help you keep your $5,000 bottom line. Selling to yourself is desperate - some potential clients will choose to take advantage of this further by offering to ask for further price concessions. Offering a low-cost option is fine, but tell potential clients that you need to consult with your