How Low Should You Go?
Recently a client of mine tried to low-ball me. She knew our standard rate for the project in mind, but asked if I would consider going lower–of course, just this once.
And I’m sure I’m not the only freelancer that this has happened to. After all, our global economy isn’t so hot. Some people are trying to get something for nothing, while others are honestly having a tough time. As a freelancer trying to keep business afloat, where does that leave you? Is there a way to deal with a prospect or an existing client who wants a discount, or an unreasonably low price? Is it better to do a one-time job on the cheap rather than “spoil” an existing client relationship?
Here are some points to keep in mind when a client asks if you can “go a little lower.” Hopefully they’ll help you assess whether or not you want to reduce your rates, and if so, what the future ramifications of that could be.
Gauge the Client
I think it helps to try to assess the situation a little before you turn your head and steam off at the thought that your rate could be negotiated. The truth is that everyone has a price, and if times have been tough for you, you may think about offering a discount. But, naturally, you want to do it in a way that ensures you won’t get walked on—and, in many cases, that you won’t have to offer the lower price again.
For me, the best way to know if I want to drop my rate is to get a clear picture of the work involved, to think about who and what the client is, and to look at how steep the requested discount is. For an existing client who gives me strong business and referrals, I am more likely to consider giving them a one-time discount. But even that can be tough because they may expect that deal again in the future. Or they may use my services now and find someone who will do it at the discounted rate the next time they need help, which leaves me in the dust.
Unfortunately, there are no black-and-white answers in these sorts of situations. But the first step is absolutely to evaluate the situation and then trust your instincts. A discount is one thing but if you’re constantly negotiating pricing with someone, the client may not be worth the hassle.
Be Polite—But Firm
Whether you say yes or no to the markdown, it’s important to be kind in doing so. And also to be firm. If you say no, the client will most likely walk away and insist he or she has a million other people who will do the job at a reduced rate. It may be time to sell yourself and state your unique value proposition. Or it may be time to tell them to close the door behind them on the way out.
Even if you do accept a lower rate, set the specifications of the project—and be unyielding about them. This is where you may drop your rate for the project, but be more stringent on the number of revisions you’ll include in the price, for example. You may even not want to include a revision process in your cost and let the client pay additionally for edits.
Explain to the client that you’ll do this “favor” for them, but it’s a one-time deal. The terms are all up to you—and this part of the process offers you the chance to build in protections for yourself. Once you know what you want to do, be polite about it and be firm. If the client is trying to get away with something, they may be less likely to try in the event that you’re steadfast. You also don’t want to give them any wiggle room in the future to say they “thought that was included, too.”
Consider a Trade-Off
Let’s say that you decide to give your client a break. Is there anything that can sweeten the deal for you? The client should understand that you’re doing them a favor, and it’s okay to politely remind them of that. Maybe they can pay the full amount upfront instead of only half. Maybe they’ll pay for revisions at an additional hourly rate instead of including them into the price (if you do that). Maybe they’ll let you do the work off-site so you can save on commuting costs. They may offer a discount on their services for you. That sort of thing.
If you’re considering a rate reduction as a one-time deal, definitely let the client know that this is a one-time thing—and think about how you can get an added benefit, too. You may have more pull on what you can get if it’s an established working relationship and they know you’ll do a great job. But you may be able to strike a trade-off or a deal with a brand new client, too.
Be Prepared to Walk Away
Everyone has a price; if the client or prospective client is pushing too much, there’s nothing wrong with declining a skimpy offer. They can get someone to do the work at their price, but you and I both know that it may not be done to your standards—and that’s their loss, not yours.
It’s hard watching a client—and a paycheck—hit the road, but sometimes you have to stand up for what you’re willing and not willing to deal with. Did you lose a gig and you’re bummed about it? Spend some time searching for new work. At least that way, you’ll know that you’re putting yourself out there and something is bound to bite soon!
I know… you want one-size-fits-all answers, but I don’t have any. My best advice is to assess the situation and use your knowledge of a client, the scope of the project and your existing financial situation to see if you want to, or can, discount your rates. And if you do, do it in a way that lets the client know upfront what the deal is, what you’ll need from them, what their expectations should be—and most of all, that while you’re a kindhearted person, you’ve got to pay the bills, too.
Hopefully they’ll appreciate the favor and wind up giving you more work and more referrals in the future…at your standard pricing, of course.
Kristen Fischer is a copywriter living in New Jersey. Visit her website at www.kristenfischer.com.
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If you do go lower; make sure you remind them at the project completion, that you did go lower for them. Don’t want clients to get complacent!
And perhaps then ask them for some recommendations to other business owners that they know. You might as well get some referrals for your lowball antics.
Good post Kristen, it i shard to know what to do at times, I had to turn down a job a few weeks ago when a client expected me to do the job for less than 50% of the quoted price.
I found it hard to do but you need to stand your ground sometimes.
Would you ever consider a trade-off of services? A friend’s magazine traded advertising space for free medical services when required – you still get a similar value when they don’t have it in cash.
It happened to me. Somehow I protected myself going further. Thanks for sharing Kristen.
In my experience, you should never go lower without taking something away from the project. Say something like, “well, we could reduce the cost by 20%, but we will only do a single mockup instead of two, and only one round of revisions instead of three.”
To do otherwise is to say that those services have no value and you were ‘overcharging’ from the start.
I also agree completely with walking away if you can’t reach an agreement or if they’re asking too much.
I had a similar enquiry as David Henderson’s problem where a client wanted me to do a job at less than half the price I’d quoted and he’d also expanded on the original requirements that I’d quoted for.
I politely declined the work and also suggested to them websites which may be able to help them (i.e. students looking to bulk up their portfolio with cheap work for example) which they were really greatful for.
I also made it clear that you get what you pay for and that if there were any projects in future that they required things like standards compliant code, cross browser compatibility, SEO, accessibility and usability in mind then to get back in touch and I’d be happy to give them a quote.
I don’t mind negotiated my rates a little bit especially for regular clients but there has to be a line drawn and think it would be an injustice to myself to negotiate the same rate as someone using a WYSIWYG editor to create a webpage compared to myself who has 10 years experience.
If you have a “brand name” or you are know in market because of your quality, you can try to go lower with one client (should be a special and very good client) asking him not to say that it is your work/brand/product.
I mean, I allowed one agency to make a very strong offer to a client that was not in my quality range. I told them to do it but forced them to make a page in their website changing pictures and the name of my hotel. The point was that I didn’t want to be involved into a war price with properties of lower quality than mine.
Of course i did as you say “Explain to the client that you’ll do this “favor” for them, but it’s a one-time deal”
It worked fine and that agency has brought me lots of good clients.
Best
There are two major cases in which I’ll agree to lowering my rates:
1) The code written for the project (I do software development) will be placed under a Free/Open Source license. Aside from me being a big believer in FOSS, working on this sort of project is great as a portfolio piece (“If you want to know more about this project that I worked on, you can download the full source code and try it out for yourself.”) and it also means that I’ll be able to reuse pieces of it in future projects without needing to worry about IP issues.
2) Long-term moderate-to-high volume work. I’m kind of torn on this one, as an hour worked is an hour worked, but, on the other hand, I don’t currently have enough work coming to me on its own that I can count on having all my work hours filled without doing any active marketing. 30 hours at $x/hr plus 10 hours of non-billable marketing pays the same as 10 hours at $(x * 3)/hr plus 30 hours of non-billable marketing. A few months of decent (if not great) income without having to be constantly beating the pavement for new clients tends to be a tempting proposition.
I really like the idea of trading services, you give them a discount and get something from them, or you give them a light product of yours. Those are really great ideas. Then it’s not really a discount, it’s something both sides can feel good about.
Otherwise those deals mostly backfire. A right, working for less, we knew that, why should we pay him more next time?… People expect you to jump for that low price again and again or they will threaten you to leave. Always be polite, but be proud of your work and know what you are worth.
Being prepared to walk away is definitely something you have to be able to do, and you have to understand that this may be one of the hardest things to do. I’ve had to walk away from a client due to him continuously demanding complete site-wide revisions (with little notice). But, this opens time and resources for other, better clients.
Nice article.
These frequently happens with freelance bidding websites.
and I like what Timothy just said, be prepared to walk away to open time for new and better clients.
I’m stunned that there hasn’t been more mention of this simple fact: you should never reduce your fee without a commensurate reduction in value. Jeff White has it right; I’d go further than he does and say that the second you cut your fee without some trade-off, you forever destroy your ability to charge what you used to. Clients will feel that you can be bargained again, will expect to get the same value for less money, and will look for another provider if they can’t. Google Alan Weiss or Summit Consulting here. It’ll be the most valuable link you click on this week.
Also, research by Robert Cialdini suggests favors get stale like bread – they don’t age like wine. The fact that you dropped your fee “just this once” as a favor will mean essentially nothing to your client six or twelve months down the line. Read “Influence” or “Yes!” for more.
The real way to fight that is to have an abundant stream of clients to deal with. If you have ten or twelve clients that are a couple calls from a job, then you needn’t discount things for them.
What I did was establish a discount policy. “Hey, I’ll be happy to discount things for you, but in exchange I’ll need this, this and this to get started.” The “this,” is a bonafide referral to 5 people, cc’d to me. I’ll give up discounts all day long for that.
I only a discount to regular customers. Afterall they are saving me the hassle of going out to hunt down new projects. I also give discounts if I have nothing on for a few days or a week. I feel that it is better to earn something than it is to earn nothing. I ensure that clients who I discount are aware that this is a one off discounted fee.
Always get something in return if they want to pay less. The deal must be mutual and can end up benefiting you in the long run. I run down the following list:
1. Offer less for a lower price like Jeff White posted i.e. single mockup instead of two, and only one round of revisions instead of three.
2. Barter for equipment/software/font purchases (make it part of the project agreement/contract) I got my tablet, office equipment and some fonts this way.
3. They provide you an equivalent service for a lower price. What can their business do for you. I usually never get to this one because they are quick to agree to the first 2 options.
If they are unwilling to negotiate a mutually beneficial deal, neither should you be, say thank you and walk away.
You could also consider keeping your rate the same, but extending your payment terms. I had this happen recently, and since i knew the client well, we talked about it and decided she could pay me my full rate if i was willing to take the payments over the course of 6 months. So i got 1/2 up front, as normal, then split the remaining 1/2 over the next 6 months. That way, she was able to budget for it and pay out smaller increments, which suited her cash flow. I kept the client and kept the full rate for the project.
My company steps around this issue all together by not having a “rate.” I work on a per project basis where the total cost of the project is screwed into wood with a project agreement. The client and I fill out the project agreement. 50% is paid before work begins and the last 50% is paid on approval of the finished project before it goes to print. Print production costs are not included in the project minimum and are added as a line item on the invoice for the last 50% of the project (also stated in the project agreement and singed off on by the client).
Per project estimates (never give quotes) are based on time spent on similarly completed past projects and on the perceived worth of the project to the client. I close by asking the client, “Is’nt it better to spend a little more than you had planned, than to spend less than you should?”
Great subject, and one that hits home with just about all freelancers right now.
I think Kristen was on track with “…be more stringent on the number of revisions you’ll include in the price, for example. You may even not want to include a revision process in your cost and let the client pay additionally for edits.”
That’s the way to go. Rather than drop YOUR price, talk budget with the client and discuss what they can receive within those parameters. Some things may have to come off the table.
What I absolutely do not do is the same amount of work at a lower rate. If we have to do less work together temporarily, then I use the freed up time to increase the marketing pace and add more clients.
I also do not extend payment terms. If I can’t afford something, then I have to do without it – both in business and personal. That is the reality that our clients must also face. What happens if they don’t meet the extended payment schedule? An awkward situation ensues; you become resentful and may even have to withhold deliverables. The client may become angry and start bad-mouthing you and your business. You’re ultimately doing damage rather than any favors here.
So, my bottom line is no rate cuts and no changes in payment terms. But I’m happy to try and find ways to work within the client’s leaner budget. Do the right thing for both of you.
One thing that has worked well for me is a value added approach. Tell the client I am unable to do “xyz” for any cheaper than what was quoted, however I am able to add in “a” which normally runs $ per month for no additional charge. It isn’t usually much extra work to include “a” but if you pitch it right it adds a world of value to the project.
When faced with the lowballers, my default reaction is to walk away. Why? Because I’ve found that these people aren’t worth my time and energy.
The only times I’ve ever been asked to lower my rate are for two situations:
1. Non-Profits. I’ve worked with a couple non-profits who have little to no budget. So, as charity or for good Karma, I’ve lower my price to fit a budget.
2. Company in Distress. In this economy, it’s obvious some companies are going to have some troubles. If they have been a good client and I want to help, sometimes I’ve lowered my rate. It has to be a good friend or client, and I have to believe in the company to do it.
Though, people asking me to lower my rate for no reason, does nothing but piss me off. I had a car salesman (go figure) try to tell me I could do the design and development for free, since ” I enjoyed what I do, it wouldn’t be work”. They could pay me for hosting the site.
This sleezball even went so far as to tell his boss in a meeting that I said that!
I am new at this freelance thing, but I had a recent deal where the client asked for a discount rate, and I offered them 10% discount per paying customer they threw my way up to 30%. I ended up making more money from the paying customers than the discount I gave her, she was happy and I was even happier. It was actually a great way to get my name to more people with no effort in marketing myself. I may actually make this a business model till the economy turns for the better *crosses fingers*
The other thing I always do the few times I’ve discounted a rate is to state the full rate on my invoice, then show the reduction on a discount line with an explanation for the discount. That reinforces the full value of the work and the fact that I’ve done a one-time favour, or reduced services to reduce price.
My personal policy is that I only discount for established clients who have built up some favours in the favour bank. New or first-time clients who ask for price reductions immediately get a revised terms of service, or a very polite referral to another source for freelancers.
I agree with many of the commenters above that if you do reduce your price, you should make sure that you either get something of equal value in return above and beyond the low payment (to keep the value proposition equal), or you should make it clear that you will also have to cut back on the service (for situations like this, I make sure that I have alternatives to offer…doing fewer revisions or editing a CMS template rather than building the website from scratch).
Very timely article!
well, I am new to this freelancing so I know I charge low to begin with but even I had times when people ask for me to charge less or if they can pay at a later date.
you know what? I much rather keep up with a part time job then go any lower. with a part time job I can work on personal work that I want and with clients that know the price Im charging is already low for the work I do.
besides, its not like we can ask our supplies to have a discount “just this once” so I dont see why a client feels like they’re ‘friends’ enough to dare ask for lower price.
I charge the same for family too. It keeps them from continually asking me for free work.
Between this and clients not paying on time, those are the two situations I dislike the most. I have a client who not only wants a reduced rate, but they also pay late and then complain about paying late. Telling me that follow up invoices aren’t professional and that they have given me lots of work, and yadda yadda yadda.
I’m seriously considering walking away, because the headache they cause just isn’t worth the time.
Great article Kristen, stop by graphicdesigntwist.com and lemme know what books you love.
Cheers!
Based on my experience, when customers are serious, they will find the money to pay. And they try to low ball you, they are not serious customers.
Good article, I have come across this situation a couple times before. I think a number of things factor into a decision like this. First off, it depends how low they are trying to lowball you, if you are charging hourly and its only a couple bucks less per hour and you need the work then it might be worth it. But if it’s significantly less than what you normally charge I would probably pass it up. Secondly, if you think this is a client that will keep coming back to you for more work in the future and they are just asking for a discount this one time then that’s another thing to consider. Finally, the client might just be testing the waters to see if you will bite at the price they put out. You can still try to negotiate for a price maybe a little lower than what you had in mind but a little higher than what the client has told you.
Good advice. I think the knee-jerk reaction to the low-ball is to get angry and stand your ground. If you take the time however to see how you could actually benefit, maybe with a trade-off or very strict terms like you say (or even bartering), then this can be a good business situation.
Whew–you guys were nice. For some reason when I was writing this piece, I was worried I’d have to duck and cover. The topic of lowering rates just ticks some people off, but I think it’s different than the debate of people regularly working for low wages.
Glad you guys like the article. I think it’s timely and practical and wish you all the best in your businesses:)
This has just happened to me!! So funny to read it here. But I took the job anyway BC I know it was going lead to more work and its great exposure for this type of work…everyone is always taking advantage of designers!
Awesome post, and awesome comments!
I like the suggestions for trading services, adjusting the work done to match the discounted rate, etc. But I also agree that lowballing can be a sign of a client you don’t want in the first place. I guess it’s a case-by-case thing. I’d say: If it’s an established client, see if you can work with them without gouging yourself. If it’s a new client trying to get a lowball deal and/or you’re getting that how-much-can-I-get-out-of-you feeling, better to walk away.
I’ve had this happen to me recently. I accepted the lower price because I knew building a relationship would be beneficial to me in the long run. I just happened to be right, luckily. It’s easy to get angry when being lowballed but sometimes it’s worth it in the long run to suck it up and go for it. Just as long as your not being taken advantage of. Sometimes it’s beneficial to research your clients.
It’s so important not to have that all-or-nothing mentality. Some people gasp at the words “lower” and “rate” in the same sentence, but if you wind up winning in the end, that’s nothing to gasp about:)
My rule of thumb is to get a favour or deal back in return. If its logo project I always call the shots, so I dont include revisions and ask the client to really consider what I think would work best, reducing any headache room and getting a good piece worth putting in the portfolio (because I designed it my way
).
I have a sad but true story. I went through the whole negotiation process and lowered the price. Not only did I lower the price, but I waived the 50% deposit. Then when the project was due, the client asked for a 15 day grace period to make the payment. To make a long story short, still haven’t received any payment or compensation. Was it a mistake? Probably. But the client was referred to me by someone I know well, so that made it tricky.
Oh well, life goes on. The quality of our service is still high and we pride ourselves on first class service.
We all learn from the lessons of experience.
This is a hot topic. My experience has always been that the cheapskates give your grief. They are usually the 20% of clients that business mentors and advisors will tell you to get rid of.
I recently quoted for an e-commerce system, and was asked to reduce it to 1/7th of the price. Was dumbfounded, especially as it was a big corporation and I already have good discounts to other close competition.
Thanks for posting Kristen, will help me out soon I expect
I only saw one comment that touched upon the following:
When the choice is between no work for several weeks (e.g., because another steady client had reneged on/postponed a promised project) or offering a discount to a client with a project ready to be assigned, this situation is a no-brainer as far as I am concerned.
Awesome post as this is the new reality we all face.
Personally, I was able to overcome the problem (I should say in process of…) by raising my prices. I realize that raising your prices earns you respect, and the more you raise your prices, the more you will attract high paying clients. It is a rough turn to take but I’ve had more positive responses this way than by giving away my pants.
P.S. And the funniest thing is that, you’ll start getting more expressions of gratitude since people start to see whatever you deliver as something of high value as opposed to just a pretty drawing.
Cheers and good luck everybody!
Google Alerts told me my name was being cited here, so I took a look. I’ve written “Value Based Fees,” “Million Dollar Consulting,” and 30 other books on consulting and management. Having said that, NEVER lower fees without reducing value commensurately. Most consultants over under-charging and over-delivering because they have massive self-esteem issues.
Bear in mind, you have to deal only with true buyers, those with budgets, and never middlemen, never HR, and never training departments.
You can negotiate terms, but never fees. Always give a buyer options, different value for differing fees.
Alan Weiss
http://www.contrarianconsulting.com
“Just this once, would you mind paying me extra for this project?!”
I love Neil’s comment about asking for more money as a favour. Very good and right on the spot.
One option that hasn’t come up is to try to keep the same rate but offer extra services or value as a one-off.
“Yes, we’ll write the 1,000 word article. Rather than a one-off discount, I’d rather offer you a one-off additional bonus service. What I’d like to suggest is that I write a 100-word bloggable version of the article. [Or whatever service you might add.]” This defends your price point but gives you a chance to showcase additional services that you can do for your clients. Who knows? Maybe in the future they will start paying for these additional services so it is more like advertising.
On the whole, in a recession, it is better to do less work but defend your profit margin. It leaves you in a better position for when the recovery comes and also gives you more free time for marketing to new clients and developing new services.
As other readers have commented, cheapskate clients who habitually quibble, negotiate and try to get more work for less money (e.g. unnecessary extra rewrites) are often clients you don’t want. There’s no point working just for cash flow. You need to be working for a profit. Let your competitors have the bad clients.
In my experience, it’s always best to try to come up with some kind of predictable, fixed pricing mechanism, such as a rate per word or price per slide. If you establish that up front then it’s much easier to respond to discount requests by saying ‘we can’t reduce our rates but YOU can reduce the scope of the project.’ You want a 20% discount, okay, how about an 800 word article instead of the usual 1,000 words.
In short, add value but don’t reduce price. Remember, if you give ‘free’ work to you clients, you’re using up time that you could spend finding new clients or improving your skills. And, in the long run, unreciprocated discounting is a slippery slope.
I had a client trying to squeeze more and more for the same money – to the point it was stressful just contemplating a discussion with them. However, we worked something out as a compromise and it was fine … until a couple of months later when it happened again and an ultimatum was issued on a deal that was really pretty poor. I walked away, politely of course, and let them get on with it. That was about 8 weeks ago and an insider tells me they still haven’t found a satisfactory replacement … And, yes, I do miss the money … but we writers are lifestyle business people rather than genuine entrepreneurs most of the time so the lifestyle decision was well worth taking … !
OFFER A CREDIT ON THE NEXT PROJECT!
I don’t know if anyone maybe mentioned this, as I didn’t take the time to read all the posts…
I’ve had clients try and get a lower rate, before the start of a project, or even during the production. Sometimes, if you’re willing to give a little (provided there’s a really good reason to) , I proposed you give them a credit for the next project. This almost acts as a ‘coupon’. This way you don’t lose out first hand and you encourage the client to come back when he needs more work. This is especially a good tactic during a dispute.
I was really bad about caving in to these kinds of requests when I first started my design business 5 years ago. Took a lot to finally learn to say no and even now its tough for me to turn down business. Normally the clients who ask for cheap rates are the ones who are going to be the most trouble.
I recently cut a couple of my clients breaks on their bill in exchange for referrals and more promotional space on their websites for my company and services. Make sure the discount is reflected in the deal somehow like others have mentioned. It’s nice to trade some work out, barter, etc. once in a while if you’re a freelancer. Especially in today’s economy, a lot of companies are having trouble just paying their existing bills. The majority of them really appreciate it, but make it worth your time as well. I usually only cut breaks for people that I’ve worked with in the past or are good friends of existing clients.
Don’t be scared to walk away from a low-baller.
I’ve made it a policy to only agree to a lower rate in exchange for something from the client. Otherwise, why would they ever pay full price? Even if what I get in exchange from them is not of value to me, and even if the rate is one that I’m comfortable with, I never want a client – new or existing – to feel that my usual rates are gouging them. As Kristen suggested, I generally ask for better payment terms – money upfront, which is not usually something I require, plus a part-way-through payment. I may also ask to work offsite. Or I may ask for extra visibility, etc.
Sometimes, I take a different tack, suggesting that the client do some of the work. I’m a freelance writer and editor, so when I’m working with corporate clients who want a break, I might suggest that they write a rough draft of a document, or an outline of content. That way, I can maintain my rates and still stay within their budget.
The customer is always right. Live by it or die by it.
The consensus from the more successful freelancers is if you’re going to give a discount, get something of value to you in return. And do it immediately. This is a principle of negotiation and it’s something psychologists like Cialdini have studied as Aaron mentioned. Give the concession and ask for something immediately. Do not say “it’s a favour” and leave it to be called on later. Do it immediately. Favours go stale and get harder and harder to get call back. Some suggestions that I’ve put together from others in the comments here. I’m sorry I haven’t left credit intact:
“Always get something in return if they want to pay less. The deal must be mutual and can end up benefiting you in the long run. I run down the following list.
1. Offer less for a lower price like Jeff White posted i.e. single mockup instead of two, and only one round of revisions instead of three.
2. Barter for equipment/software/font purchases (make it part of the project agreement/contract) I got my tablet, office equipment and some fonts this way.
3. They provide you an equivalent service for a lower price. What can their business do for you. I usually never get to this one because they are quick to agree to the first 2 options.”
You can also ask for better payment terms (all payment upfront), or whatever you have in mind. Reduce services as a last resort.
“I had a recent deal where the client asked for a discount rate, and I offered them 10% discount per paying customer they threw my way up to 30%. I ended up making more money from the paying customers than the discount I gave her, she was happy and I was even happier. It was actually a great way to get my name to more people with no effort in marketing myself. I may actually make this a business model till the economy turns for the better *crosses fingers*”
My note again: Yes, this is a pretty good way of doing things. You’re essentially paying your clients a referral fee that way. Instead of a discount, you can also offer a credit for future work, pay the client a cash referral fee, or just send them a nice gift as a thank you like a bottle of wine or good maple syrup. Do your research, great wine can cost 20 bucks and is indistinguishable from much higher priced wine unless they’re like a top 5% expert.
Always, always, always, always incentivize referrals in some way. Referrals are the lifeblood of the business of most freelancers. Always ask for referrals, too. Always, always, always. When the project is over or even during it: just asking one line “do you know anyone who might be interested in my services?” consistently can increase your clientele very quickly. Then call/email whoever they tell you and mention who you got your info from. Turns cold calls into much warmer calls and much easier to get new business.
For those of you who are a little antsy about being perceived as charging too much and you’re unsure of your prices, consider this:
“A penny saved is a penny earned.” Do you agree with this? This is a very useful model that works wonders in many cases. For example, I won’t work an hour to save a dollar cause my hourly is much higher than that. Now consider this: your potential client is saving and EARNING whatever the discounted amount is…off of you! There’s no need for indignation, but if they’re earning something from you, you may as well get some sort of value back for it. That way, you can actually think of it as buying something from the other person that is of value to you (future business, referrals, goodwill, barter, etc), instead of losing money or charging less.
You can get really creative with this sort of thing: in exchange for lower cost, you can ask to be included in their next round of advertising, or on their website. If they’ve got an email or just regular customer list, ask for it and advertise that list if appropriate.
Enjoy!
Lol @ “Just this once, why don’t you pay more more?”
You’ve got to ask yourself “What do I have to gain?”
Would it be okay for YOU to ask the client for a raise…you know…just this once?
Sure, discounting your rate may help you keep the client, but I’ll call it what it is: MANIPULATION. Leveraging your existing relationship with the implied threat of dissolving that relationship in order to get over, err, I mean, continue the relationship. Why should you do the same quality of work at a discounted rate, especially if they already knew your rate? Maybe if it was a brand new client, then yes the rate would be negotiable. But if a current client’s insistence on a discount implies you may lose their business forever then, frankly, you shouldn’t be working with that client. I won’t allow myself to be manipulated like that. Your services are not a commodity, so you don’t need to discount anything. If they can’t afford to pay freelancers what they’re worth because of a down economy or whatever, then that’s their problem. You’re not selling food, water, or medicine.
This discussion isn’t about getting something equal in return (in that case, you don’t really lose), it’s about doing the same work for less just because the client asks you. I say you’re better off without them. Manipulative people are not good to be around. That is, unless you don’t mind being manipulated. To that I say good luck, sucker.
YouTube video “The Vendor Client relationship – in real world situations”. Great illustration. Had to circle back and share. Enjoy!
http://www.youtube.com/watch?v=R2a8TRSgzZY
I have never had a positive experience when doing a job for less. The issue to me is AFTER the job is done. As a web developer I have been sucked in to the “there’s going to be a lot of extra work once this project is done” mentality. The issue is, if I do something for (let’s say) $2500 but then down the road they need 12 hours of additional development, the sticker shock alone of that second effort sends them packing. I have found very little value in ever doing something on the cheap as it only hurts me/my company.
we can improve our personality for marketing by reading this kind of articles,i think you are a good man with your clients.
My problem lately has been not getting a response after I try to list my price. Not a single “that’s a bit high, can we negotiate it?” I know for certain in one case they went and found someone who was willing to work for really cheap. I have a pricing guide, and other professionals on forums like LinkedIn agree with these prices, but even when I knock off 50% or more from a base price, I still have emails ignored because I ask for more than $100 for high-quality, photo-realistic work that’s going to be mass-produced by the client.
In the instances I’ve cut rates in the past I have still insisted in something in return, even if it’s just getting the client pass out business cards to her client or getting a link on a site.