Pricing is an art, not a science, just like negotiating.
So, how do you tell a client, a tenant, a customer what the price is for your product or service, especially if it’s a high price, say, much higher than they are expecting?
Maybe it’s a commercial lease renewal and you are upping your price (by a lot). How do you do that without losing the client/customer/tenant?
Well, here’s what I suggest:
In commercial leasing, you throw out there a range of comparables that are as high or higher than what you are asking for your space–you get your prospect thinking much higher right off the bat. Then, when you tell them your price, there’s a sense of relief that it’s not as high as they were fearing it might be.
Hopefully, their budget is close to the range you’ve set or the price you’ve asked for.
Next, you talk about the extra benefits– perhaps, better property management, better signage, less deferred maintenance, better marketing for the whole building, better internet and wi-fi, improved signage…
Lastly, you ask them (never tell anyone anything, ask!) to check out their alternatives themselves; maybe there’s a better space or a less expensive one?
When they weigh the cost and disruption of moving against the cost of staying in-situ plus the value of the added benefits, maybe they talk themselves into staying…
This structure for presenting a price increase or negotiating an agreed price in the first place works well in my experience in many fields, not just commercial leasing.
Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD
Real Estate Investment and Business coach
ROYAL LePAGE Performance Realty broker
Ottawa Senators founder
MAKING IMPOSSIBLE POSSIBLE
FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE
FEHAJ, FOR EVERY HOME A JOB
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