Pricing: Hit ‘Send’ and Hope for The Best
A face-to-face request is 34 times more successful than an email, which begs the question, why do we persist in conducting our primary price negotiations by email instead of face-to-face or at the very least, on the end of the phone?
There are at least two possible explanations, one charitable, one not so. Many will argue that the principal explanation is that we are all time starved and under pressure and it is much more efficient and cost-effective to belt out an email with a pricing proposal and await a response. This assertion has legitimacy.
A more brutal perspective might put it down to a less flattering dynamic – we’re just ‘chicken’. We will do anything to avoid that visceral conversation, something we have written about recently in ‘We’ll Have a Chat at the End: A $20 Billion Black Hole’.
In a sense though, neither of these really matter. A more useful question would be to ask whether the current prevailing practice of engaging with clients on pricing by email is the most effective. In our view, the answer is an emphatic ‘no’.
Harvard Business Review recently reported on research conducted by Vanessa Bohns and Mahdi Roghanizad at Western University, published in the Journal of Experimental Social Psychology.
Their research revealed that despite the reach of email, asking in person is a significantly more effective approach; “… you need to ask six people in person to equal the power of a 200-recipient email blast. Still, most people tend to think the email will be more effective”.
As part of the research, participants were tasked with asking strangers to complete a brief survey. Aside from the fact that email was demonstrably only 3% as effective as a face-to-face request, what really took the researchers by surprise was the fact that those sending emails were just as confident as those making the face-to-face request as to the level of acceptance.
Participants in the face-to-face condition guessed that on average 5 out of 10 people would agree. Participants using email were even more confident, guessing that on average 5.5 out of 10 people would agree. The emailers were wrong by a factor of 34! … Click for Full Article