OnDemand WTP Pricing Research

When Clients Push Back on Pricing: 5 Strategies for Advisors | ThinkAdvisor

Most of the securities business seems to be priced based on assets under management. You can make a good case, explaining how everyone benefits. Online trading and robo-advisors are getting warmed up in the opposite corner. It would appear clients can get everything for nothing. What now?

Strategy Three — Discounting

The client insists on a lower pricing structure. You realize 80% of something is better than 100% of nothing. You agree to a discount.

Discounting is prevalent in other industries. You get a great rate if you shift your phone from one carrier to another. You transfer a credit card balance to a new card because of the great introductory rate on balance transfers. In both cases the time period for the preferential pricing is clearly specified.

Now here’s an amazing thing about our industry: The client wants a discount. You give them one. For some reason, this can stay in place for decades! We got the account. Problem solved. The discount is rarely revisited.

Approach:  Consider granting a discount for a year or two on the understanding you will be revisiting it down the road. This gives you the opportunity to demonstrate how you add value to the relationship. If the client bonds with you and transfers lots more assets in, maybe sticking with that discount is the right thing to do.

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When Clients Push Back on Pricing: 5 Strategies for Advisors | ThinkAdvisor.

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