Understand Your Buyer > How To Convert > The Fixed Price Effect
What is it?
The Fixed Price Effect is all about removing risk and unknowns for a buyer, to make their buying decision easier, by presenting a fixed price rather than something variable.
Why does it work?
It works because many industries operate a variable price model where the amount of time or resource needed to complete something will dictate the cost of the work. By taking a fixed price approach, you firstly differentiate yourself from the competition which is important to seize attention, but secondly to this, you will exude confidence, certainty and expertise as you are willing to shoulder the “risk and unknowns” of the project by committing to a fixed price.
It’s the transition from not knowing what something might cost, to having a defined and fixed cost that can make all the difference for your buyer, and that’s why operating a fixed price model (if it makes financial sense for your business) is well worth considering.
How can you use it?
Depending on your offering, consider how you could create a fixed price version of your current offering. It’s important that if you are fixing the price of something that by its definition could vary, that you do your homework to make sure you don’t end up losing out financially.
For example when I began Clear Sales Message™ I offered fixed price consultancy with fixed deliverables delivered in a menu style system. I knew that if any of the work got our of hand and it didn’t make sense I could always change my offer, but it worked well and continues to work well to convert buyers as they have a much lower perceived level of “risk” and know exactly what my work will cost.