Should You Cut Your Prices to Win a Project? - Ask Evan

Hi, I'm Evan Carmichael, and welcome to another edition of Ask Evan. In today's video, I'm going to answer a question from one of my readers, Gideon, who is trying to win a whole bunch of projects, and when he's bidding on them, he's often asked to cut his price. And the problem is, if he cuts his price, he might win the project, but his profit's going to be really reduced. So he's asking for my advice on what to do. So, Gideon, my advice for you, first of all, make sure that you are competitive. If you're coming in at 20 times more expensive than everybody else, it's going to be hard for the customer to say yes. So make sure there is some competition there. The second thing though is I don't encourage you to be the low-cost provider. It's really hard to build a sustainable business on being the cheapest offer because somebody's always going to come in and try to undercut you. Instead, what I'd encourage you to do is try to find other ways to add more value to the deal. So it could be through better service, or you're adding different products, or features or benefits that your competition can't add. So you need to find a competitive advantage besides price that can help differentiate you and make customers want to work with you, because for that they're going to pay a premium for. So whenever I'm bidding on projects, I'm never the low-cost provider, and I'm always trying to add other services and benefits on top of it because they're working with me instead of somebody else. The last thing is, if you are bidding on a project and they are— they do ask to take money out, never just take the money out. Always try to take something else out of the deal. So if they want to cut, you know, X number of dollars from the deal, say, "Hey, we can accommodate that, but we have to take out these pieces of the deal." So that way it doesn't look like you're really flexible on your pricing and that you do offer a lot of value, and it helps with the negotiation. So they may end up with a better deal, it may cost them less, but it's also not costing you as much to put into the deal as well. So try to work out the different components of the deal, and anytime they're asking to take money out, always take something else out on your end of the deal as well. So it's not just cutting the price. I hope that helps, Gideon. If you guys like the video, please give it a thumbs up. I'd also love to hear your thoughts and feedback if you want to leave a comment below, and stay tuned for the next episode.