The Art of the Discount: How to Never Lower Your Rates Again
It’s happened to every entrepreneur, business owner and service provider at one time or another—probably more than once and it will keep on happening until you know how to deal with it.
Picture this scenario. You’ve met the client, you’ve had coffee/ lunch/ dinner. You’ve listened to their needs and you know that you can help them achieve their business goals. You’ve got a tremendous track record, you’re awesome and they are loving everything that you share with them.
What could possible go wrong?
You offer a proposal or contract, only to have your potential client respond with, “That sounds great, but I can’t afford it.” What do you do? For a lot of business owners, their first response is to lower their rate. After all, they reason, she really does need my help. Plus it’s good karma, and she’ll talk about me with her friends, and refer business to me later…
Maybe, but 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 wind up resentful, and wondering why your business isn’t as profitable as it should be, and you cannot have the car MOT’d or a holiday this year, meanwhile the client is swanning off to Florida to see Mickey Mouse.
I want you to make a promise to yourself right now that you will never ever, ever again lower your rates to appeal to a client. Doing so devalues your services, makes the client less likely to follow through, and worse, makes you feel terrible later. In fact this strategy in business makes entrepreneurs feel so worthless they decide to quit business and go and get a job.
Now, I’m not saying you can never offer special deals, of course you can. But what you can’t do is devalue yourself to the point of wanting to quit.
Let’s change how those offers are made. If a potential client cannot afford you, and you want to work with them, ask them what part of the package they’d do without to make the deal happen.
Here’s how it works:
If your coaching package includes:
- 4 45-minute calls per month
- 1 email per day
- 1 in-person meeting per quarter
- and 1 mastermind retreat per year
Your potential client claims to not be able to afford your asking price of £1,000 per month. Now, without giving her a financial audit on the spot and demanding to see her bank statement, you offer to reduce the price and the package.
So the offer you make to your client 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, and abused 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 and you can now afford the same trip to Florida.
The same technique can be used for any type of entrepreneur or service provider.
What if you’re charging 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 45 min 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 for anything, take a close look at how you can also reduce the work you’ll be doing.
This way you’ll never feel as if you’ve been taken advantage of, and your clients will still get great service, and who knows, she may be able to upgrade to the full package a few months later.