Rates do not only show the amount of money which you charge for your services. The price of your services is one of the most important decisions.
It’s proven that customers tend to think that the more things or services cost, the more they are worth. But at the same time customers always want to get discounts. Rates are related to your service quality and to the value of your brand, never ever forget this!
There are a lot of potential clients who will ask for discounts and it is hard to imagine a situation when a customer doesn’t try to negotiate the price. There are five reasons why discounting is bad for your business.
- Giving discounts will create an expectation to your clients that everything can be negotiated. If you ever give a discount to a new customer, they will expect to negotiate the deadline and other things. And when they come to use your services again, they will ask for the same discount again, because you gave it the first time.When a client asks for a discount, there’s no need for you to explain all the reasons why you can’t give them a discount. Steve Jobs once said, they come to you because they know your value so you don’t have to tell them yourself. And if they don’t know the value of your business, you don’t need them as customers.
- It will make your business look less professional. Customers who have business experience know that quality services can’t be cheap. If you have experience and good skills, don’t undermine yourself. Price is not the most important to customer purchasing behavior.
- Most customers lie about additional work to get discounts. A lot of customers are using the old trick when they are trying to convince you that this is only the first assignment of a long and profitable collaboration. If they demand you to make big discounts for the first job and they suggest they will give you more orders in the future, offer for them to write up a contract.
- When you work as a freelancer, you work to serve every customer’s individual needs. You are not a factory and can’t produce identical pieces. Good quality custom-made services can’t come at a low price. Remember this: as a freelancer, you always create unique products or services. As a freelancer you have even more reason not to give discounts.
- Your business is not a charity. Don’t ever give discounts and let yourself get into financial problems because you think that increasing your price won’t be fair. When you earn less, you have to spend less on your basic needs, your working tools, courses or books for you skills improvement. Also, you never know when you will need the extra money for unplanned situations.
You may feel like you are working your butt off but you don’t see much profit. That’s because your price is already too low. What is your attitude towards discounts?
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