Chapter 9: Mastering Pricing Conversations

Many consultants struggle with pricing discussions. These frameworks make the conversations more comfortable and effective.

What You'll Learn

The three pillars of successful negotiation
The give-and-get framework
How to handle price objections
Tapering concessions strategically
Alternative compensation: equity and success fees

The Three Pillars of Negotiation

Master negotiators excel at:

1. Gives and Gets

Never give concessions without getting something in return.

2. Value Selling

Focus on ROI and business outcomes, not features.

3. Strategic Options

Present choices that guide the conversation toward value.

The Give-and-Get Framework

When clients ask for concessions, always get something in return:

Top "Gets" for Consultants

When They Ask For...	Ask For...
Discount	Faster payment terms
Lower price	Reduced scope
Extended timeline	Case study rights
Additional features	Testimonial commitment
Free pilot	Referral introductions
Delayed payment	Extended contract term

High-Value "Gets"

Value Audit. Quarterly reviews where client documents value received
Case Study Rights. Permission to share success metrics publicly
Referral Commitment. Introduction to 2-3 peers after successful delivery
Testimonial. Written endorsement upon reaching milestones
Extended Timeline. More time for delivery in exchange for lower price
Direct Stakeholder Access. Regular meetings with decision makers
Success Metrics Definition. Client commits to specific KPIs upfront
Payment Terms. Earlier payment in exchange for discount
Logo Rights. Permission to use their brand in marketing

The Reverse Pricing Technique

Instead of starting with a price and justifying it, start with value and work backward:

The Script

"Based on what you've shared, solving this problem would save you $X per month."

"Typically, projects of this nature deliver a 5-10x return on investment."

"Given that potential return, an investment of $Y makes sense for the value received."

This approach frames the conversation around ROI rather than cost.

Example

Step	What You Say
Establish value	"You mentioned this costs $200K/month in lost efficiency"
Project outcome	"Our solution typically reduces this by 60-70%"
Frame investment	"For $50K, you'd save $140K/month—nearly 3x return in month one"
Create urgency	"Every month of delay costs another $200K"

Handling Price Objections

Price objections are normal. Here's how to handle them:

"We need to think about it"

"I understand this is a significant decision. What specific aspects would you like to think through? I'm happy to provide additional information. Also, what would need to be true for you to move forward confidently?"

"It's more than we budgeted"

"I appreciate your transparency about budget constraints. Let's talk about the ROI—you mentioned [problem] is costing [amount]. Our engagement would address this in [timeframe]. Would it help to explore a phased approach or different payment terms?"

"We're exploring other options"

"That makes sense for a decision this important. What criteria are you using to evaluate options? I want to ensure you have all the information for a fair comparison. What aspects of our approach resonate most?"

"We might build this internally"

"Building internally is always an option. Have you calculated the full cost including salaries, time to market, and opportunity cost? My clients typically find that engaging an expert accelerates their timeline by 6-12 months. What would that acceleration be worth?"

Tapering Concessions

How you give concessions signals your negotiation position.

Poor Pattern (Signals More Room)

First concession: 5%
Second: 10%
Third: 15%

This pattern increases with each concession, telling them to keep pushing.

Better Pattern (Signals Finality)

First concession: 15%
Second: 5%
Third: 2%

This pattern decreases, signaling the negotiation is ending.

The Rule

Always taper your concessions to indicate diminishing flexibility. Each concession should be smaller than the last.

When to Walk Away

Sometimes the best negotiation move is declining:

Walk Away When...

Client can't articulate what's at stake
Budget is dramatically below your minimum
Timeline is unrealistic
They want free work "to prove yourself"
Red flags in how they treat you

How to Walk Away Gracefully

"Based on what we've discussed, I don't think I'm the right fit for this engagement. I'd recommend [alternative] for your needs. If your situation changes, please reach out."

This preserves the relationship for future opportunities.

Price Anchoring in Conversations

Before discussing specific numbers, set the range:

"The final pricing would be anywhere from $50K to $200K. Based on the business case we co-create, we can pick a point in that range that justifies the value we bring."

Why This Works

Gives budgetary guidance without committing
Keeps focus on value discovery
Prepares them for the range before you present options
Lets you adjust based on what you learn

Moving Value Instead of Dropping Price

When budget is truly constrained, move elements between tiers:

The Script

"If budget is a concern, what would it take for the current price to make sense? Perhaps we could include some elements from the premium package that address your specific needs."

Example

Client balks at $50K advisory package.

Instead of dropping to $45K, ask what they need. Maybe: - Help with technical writing - Assistance conducting final interviews for an AI role - Access to your expert network for a specific question

Include these from your higher tier rather than reducing price. You maintain pricing integrity while addressing their concerns.

Equity Compensation Structures

For early-stage companies with limited cash, equity can be part of your compensation structure. This works best when you genuinely believe in the company and want a longer-term relationship.

"For early-stage companies, my 'option three' sometimes includes becoming an advisor with equity compensation—typically between 0.22% and 0.25% of the company for a one-year engagement."

When Equity Makes Sense

You believe in the founder and the business
The company has clear traction or a path to fundraising
You want ongoing involvement beyond the initial engagement
Cash constraints are real, not negotiating tactics

Structure It Properly

Define the vesting schedule (typically 1-2 years for advisory)
Specify your expected time commitment (e.g., 2-4 hours/month)
Get proper legal documentation (advisor agreements)
Combine with some cash component when possible

Don't Substitute Value for Hope

Equity should be a bonus on top of reasonable compensation, not a replacement for it. If a company can't pay anything, that's a red flag about their viability.

Success Fees Tied to Fundraising

When working with startups raising capital, you can structure deals where part of your compensation is contingent on their successful fundraise. This aligns your incentives with their outcomes.

"I aim to structure deals as '$20K upfront, $90K when you raise,' knowing that when $15 million lands in their account, paying $90K feels very different."

Why This Works

Reduces their immediate cash outlay
Creates aligned incentives
Makes your fee feel smaller relative to the capital raised
Builds trust by sharing some risk

Beyond Startups: Portfolio Deals

This approach scales beyond individual companies. Private equity firms and venture studios often need consistent expertise across their portfolio.

"A private equity company reached out and said, 'We have 25 companies, we all need AI... We'll give you 30 grand for every implementation.'"

Portfolio deals create predictable revenue streams while giving you exposure to multiple companies. The per-engagement fee may be lower, but the volume and consistency often make up for it.

Structuring Success Fees

Component	Example
Upfront retainer	$15K-25K (covers your minimum)
Success fee	$50K-100K on close
Trigger event	Funding closes, acquisition completes
Timeline cap	Fee expires after 12-18 months

Always get the upfront component. Pure success-fee deals rarely work out—founders get busy, priorities shift, and you've invested time with no return.

The Simplicity Test

Check Yourself

Ask clients to explain your pricing back to you. If they struggle, it's too complex.

Good: "$30K/month for AI-powered sales automation that typically generates 5x ROI"

Bad: "$500/hour plus 15% of compute costs with a minimum of 40 hours/month and additional charges for model training"

Simple pricing closes faster.

Action Items

Create your "gets" list. List 10 things you can ask for when clients request concessions.
Practice reverse pricing. Write out the value-first script for your main offering.
Prepare objection responses. Write responses to the 4 common objections in your own words.
Define your walk-away criteria. What are the red flags that mean you should decline?
Simplify your pricing. Can a client explain your pricing back to you in one sentence?
Evaluate equity opportunities. Define your criteria for when you'd accept equity—what stage, what traction, what minimum cash component?
Design a success fee structure. If you work with startups raising capital, draft a template that includes upfront retainer plus success fee.

Key Takeaways

Never give concessions without getting something in return (give-and-get)
Start with value and work backward to price (reverse pricing)
Taper concessions (decreasing amounts) to signal finality
Know when to walk away—some deals aren't worth taking
Set price anchors early to prepare clients for the range
Move value between tiers instead of dropping price
Simple pricing closes faster—if clients can't explain it, simplify
Equity can work for early-stage companies, but always include a cash component
Success fees tied to fundraising align incentives and make large fees feel smaller

Next: Chapter 10: Qualifying Buyers →