The Advantages of a Fixed Pricing Structure

It’s no secret that the world, in large part, revolves around money. The sales industry is no exception; often the hardest part of closing a deal is negotiating all the little details and associated costs. How is your current pricing structure serving you in that regard?

fixed pricing structure

What if I told you there was a way to eliminate the headaches of negotiation in your business? And that it would not only make your life easier but increase your business? Could a fixed pricing structure be the right move for you?

At my company (Skillway), we have a fixed pricing structure for our services, and frankly, it’s been amazing. In some ways, this is the ultimate closing technique.

Maybe One Size Can Fit All

We were partially inspired to make the move by Elon Musk’s now-famous letter to all Tesla employees reiterating their fixed pricing structure. He stressed there was a “no negotiation and no discount policy” for family, friends, or celebrities (or even himself). Musk called this the “Tesla same fair price principle.”

Streamlining and aligning that experience for every single customer can be done easily when everyone pays the exact same price. People love to think they’re getting a good deal. But a fixed pricing structure eliminates both the need for negotiation and the potential for bruised feelings. It can seem intimidating to roll out, but it can actually make the operation of your business substantially less stressful.

Think about it: If your prices vary from day to day and person to person, how is a client ever going to feel like they’re getting your best effort or the best “deal” possible? They may feel like they’ve overpaid if they discover someone else got a lower rate. Or if they negotiate a discounted rate, you may find that you don’t feel compelled to provide them the same level of service as someone who paid full price.

When you have a fixed pricing structure, though, these issues don’t arise. Instead of having pricing conversations, you’re able to have budget conversations. You’ve stated clearly upfront what your product or service costs. So what you can talk about instead is their budget and how to work together to stay within it.

Consider this example: You’re in construction, and a client says they have a $250,000 budget. Rather than cutting your prices to pack everything they want to do into that number, you can sit down and have a discussion with them. Determine which items are the least important to them, and trim back your services to reach that budget number. It becomes about tailoring the service rather than reducing your profit margin.

It’s a Win-Win

This kind of pricing also assures the client that they’re not just a number or a commodity to you. It reinforces to them that your product or service is unique and specialized, that they can trust you to fulfill your end of the agreement, and that they’ll be extracting maximum value from your partnership.

It might surprise you, but we haven’t received any significant objections to our fixed pricing model. When you’re absolutely confident in the quality and value of your product and service, shifting to this kind of pricing could be an important step forward for your business.

It makes things easier for you, and it makes things easier for your clients. Every single person who chooses to work with you will know upfront what they’re paying for and what they’re getting. They’ll also know they’re getting the best possible deal, and it will completely remove the stress of negotiations.

Until next time—go sell some stuff!

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