You have a set fee for a project, and your client asks “Is there a chance you could lower it a bit?
“It’s a bit above my budget …..”
We’ve all been there, I’m sure.
When you’re faced with such a scenario, should you reduce your fees?
The short answer, in my opinion, is a firm “No”! But that’s after many years of getting it wrong.
When I asked some friends and colleagues how they respond when they’re asked to lower their fees, here’s what they said.
Your Fees are your Positioning
“No, it’s your positioning – you can reduce the scope / reduce the work delivered to fit the budget… never ever reduce fees! As someone once said to me, low fees attract HELP clients – they have High Expectations but are Low Profitability… the clients who really genuinely buy into your value-add, appreciate the effort and skill you invest I’ve found also pay on time and are less general hassle.
When I can’t afford someone’s services I tend to say things like “how can we do something like what I need but within this cost?” or “what can we strip out to bring the costs closer to my budget?” etc… because I’m aware that I would not want to undervalue / underpay them but need to reduce scope / effort to make it affordable!”
Your fees are your positioning in other words, where you fit in relation to the competition.
If you’re willing to charge bargain basement fees, then that’s how your clients/customers will perceive you. Think Harvey Nichols versus Poundland. There’s no comparison!
Don’t compete on price, but on value.
Bundle Services/Offer Extra
“Free’ advice can be found on our websites. I don’t generally lower fees, unless it’s for someone I already do lots for. Better to offer a freebie of some sort to add value.”
“I don’t reduce my fees, when I was a makeup artist I was often asked to offer a better price, I politely pointed out that this was my livelihood, it can get tricky. We don’t ask supermarkets to reduce their prices because things are ‘tight’ so why should you drop your prices. I suppose another way to look at it would be to offer a different package, or remove a certain element of the work.”
You can and should bundle services. It’s a far more profitable way to earn as a service provider.
Not only is it a great way to show the difference between you and your ‘competitors’ (not that they really matter, to be honest, you’re unique YOU, that’s all that matters), with packages, it’s far easier to see where you’re offering value.
“Because I coach clients in negotiating skills I always expect someone to negotiate for my services. A win-win negotiation is a great way to get the biz and a satisfied client. I will often discount for more fee days or 100% payment for a fixed term project – the discount may not be a fee but on extra time for diagnosis or expenses or additional time to do the job – whatever is a ‘win’ for you – low-cost to you and high value to the client. Negotiating is good.”
The other thing to remember about negotiating, is that it doesn’t have to be a haggle on price. So whether you throw in something extra (although be careful about throwing in too much), or whether as Tony said, you negotiate on providing additional time to do the job, whatever is a win/win for the both of you is good.
What do you think – would you and should you reduce your fees? What tips would you add?
photo credit: kaboompics.com