The Art of the Discount: Never Lower Your Rates Again
Ever have a customer or client that wants you to lower your rates, give a bigger discount, or ask for a lower price for a product or service?
We’ve all had it happened to us once or twice. Working with clients I’ve experienced more times than I can count. Maybe they asked for a bigger discount than you were planning on?
Tammy Munson works with Entrepreneurs and Small Business Owners to maximize their efficiency through systems and processes in order to increase their bottom line, work fewer hours, and live their ultimate lifestyle.
It usually goes a little something like this: After a lengthy initial call and discussion with your prospective client about what they are looking for and their needs, you feel enthusiastic about working with this client.
You create what you consider is a fair proposal or contract for the work needing to be done. You hit send on that email.
Instead of a resounding YES, your potential client responds with, “That sounds great, but I can’t afford it. Your rates are too high!
What do you do?
For so many entrepreneurs, their first reaction is to lower their rate.
After all, they reason, she really does need my help and I need clients. Plus, it is good karma, and she’ll talk about me with her friends, and refer even more business to me later.
Maybe she will … and if she does, that is wonderful! However, that is not usually the case.
More likely than not, what you end up with is a client who takes far too much of your time, for less money than you deserve. You end up working lots of hours for less pay, resenting your client, and wondering why you aren’t earning the living you know you’re capable of.
It’s a Trap!
Sound familiar? Don’t fall for this tactic.. stay true to what you are worth.
As one of my favorite business coaches, Christy Wright says, “Set your prices like a PRO, Your work is more than what you might think! “
Stay true to the professional that you are. If you have the skills and talent to warrant that rate, then don’t lower it to meet the needs of a client. The right client, one that will value your worth, will find you. Not everyone will be the right client for you and your business.
The bottom line is that your expenses will still be the same, the time you spend working for her will be the same, however, your client income will be less.
I want you to make a promise to yourself right now that you will never again lower your rates to appeal to a client. There is no reason to lower your rates to meet the needs of a potential client.
Simply put, discounting and lowering your rates is just not a good business practice.
By lower your rates, all it does is devalues your services, makes the client less likely to follow through, and worse, makes you feel terrible later.
Now, I’m not saying you can never offer special deals for your clients. After all, It’s your business, you can do what you want to do. That’s why you decided to start your business.
However, I do want you to change how those offers are made.
Here is what you do:
Let’s just say that your coaching package includes:
- 1 45-minute call per month
- an email discussion per day
- 1 in-person meeting per quarter
- attendance at your annual mastermind retreat per year
The Art of the Discount
If your potential client claims she can’t afford your asking price of $1,000 per month, rather than offering to reduce the price, you offer to reduce the price and the package.
Now the offer you make to her now includes everything BUT the mastermind retreat. Or everything BUT the in-person meeting every quarter.
You have not lowered your rates so far that you feel used, but at the same time, you’ve worked with her to create a plan she can afford.
It’s a true win-win for both of you.
The same technique can be used for any type of coach or service provider unless you’re charging strictly by the hour. If that’s the case, take a look at how you can reduce the number of hours you need to invest while still providing value.
For example, rather than offering four one-hour calls, change your plan to just two calls, with email follow-ups. She’ll still get plenty of value, and you’ll free up some time by inviting email questions rather than blocks of time on the phone.
Next time you’re asked to reduce your rates or pricing, take a closer look at how you can also reduce the work you’ll be doing. That way you’ll never feel as if you’ve been taken advantage of, and your clients will still get a fabulous service or product.
If you have specific questions on how to do this or what to say, please leave a comment below.