Discounts: Keep Your Clients and Your Wallet Happy
When I’m shopping for something, discounts can play a big role in what I wind up purchasing. Whether I’m looking for a host for my website or a graphic designer to put that website together, I’m more likely to choose an option that offers me a discounted price. I’m not the only one who makes purchasing decisions that way, either: depending on your clientele, you’re likely to pick up at least a few new clients with a discount.
Discounts and sales offer motivation for potential customers to buy now: if they want to take advantage of the deal, it’s necessary to act immediately. You can also use discounts to motivate your customers to do all sorts of things, like pay early or try out new services that you’re offering. The right discount can help bring in more money from new projects, if you take a long-term view.
A Few Discounts Worth Considering
The exact discounts your clients will be interested in depends on just what type of freelancer you are, but there are some basic discounts that can work no matter what services you’re offering.
- Customer retention discount: You know the punch cards that many businesses offer to customers that allow you to earn points towards free stuff — as long as you’re a loyal customer? Those businesses reward customers because it’s a relatively simple way to retain customers long-term. You don’t need to offer a full rewards program, but mentioning that you give a discount to clients that keep coming back can help you keep your current clientele.
- Quick payment discount: You may have had the experience of walking into a store and finding two different prices: one for cash and one for credit. If the storekeeper gets money that he can turn around and spend immediately, you get a better deal. Credit represents more of a risk and a longer wait, so the price goes up. You can take advantage of a similar idea by offering clients a slightly reduced cost if they pay up immediately (rather than net-30, net-60 or whatever lengthy terms might be their first choice).
- New service discount: If you’re adding a new service or product to what you offer your clients, you may find that your good work in other areas works against you. If you’ve become their go-to-guy for web design, they might not jump on your offer to take over their copywriting needs. Offering a discount can make a big difference in how soon your clients will give your new service a chance.
Of course, discounts can’t solve all your problems. If you offer too deep a discount, you can’t afford to complete the project and still eat. And if you continuously offer discounts, you’ll convince your clients that your discounted rate is your normal rate, making it harder to change your rates in the future.
You have to be sure that you can afford to offer a discount before you even start thinking about how it will work with your own freelancing services. However, considering the fact that you can offer as small of a discount as you want, it’s probably worth moving your standard rates to the point where you can give discounts when you want to. That’s not a suggestion to raise your rates ridiculously, but building in padding to allow for sales and discounts can also provide padding if a client is late in paying or similar situations.
You will find that some clients will shop around, constantly looking for bargains. You can offer a new client discount, but in my experience, that just encourages a client to jump ship if he finds a cheaper deal for his next projects. Instead, I try to use discounts in such a way that they encourage clients to keep bringing me business or to convince new clients that a long-term arrangement will pay off.