How to Help Clients ‘Buy’ Your Fees

Matt Homann of the [non]billable hour posted last week about the psychological impact of pricing, and suggests that if you want clients to believe your fees are close to your actual cost, you shouldn’t price in round numbers. Matt’s suggestion is based on an article from Scientific American by Wray Herbert entitled “Why Things Cost $19.95” which discusses the findings from a study performed by two University of Florida marketing professors.

One of the things that these professors looked at was a comparison of list prices and sales prices of homes in one Florida county. What they found was that sellers who listed their homes with a more precise price (as opposed to a round number) consistently got closer to their asking price. In short, buyers negotiated less when the home was listed at an odd number. Herbert concluded that, “one way to deal with a buyer’s market may be to pick an exact list price to begin with.”

Does that psychology translate to law practice? Why not experiment with it and find out whether you encounter less fee resistance if you change your pricing to more exact or odd numbers, rather than round figures? If you price a service at $1500, why not try pricing it at $1497 and see what happens?

*Hat tip to Lisa Solomon of Legal Research and Writing Pro for alerting me to Matt’s post.