I’m in a constant battle of wanting to give a discount on my services to friends and family, yet needing to cover bills and build my savings. I can often see the potential in their vision and want to do what I can to support it, but I have to be efficient with my time and resources.
I’m getting better at refusing projects that don’t benefit my mental and/or financial growth. I may still provide a discount to friends and family (depending on who and what it’s for), but I’m definitely at the stage where I will turn down a project that devalues my services. It’s the only way to ensure my mental and physical health: I can’t be of service to anyone if I’m not okay.
That’s why I love this article by business etiquette expert Jacqueline Whitmore entitled “Why You Should Drop the Client Who Demands You Drop Your Fee”. It is a brilliant read for any entrepreneur that offers products and services. We can’t always give the family discount, and those who really care about you will support your growth by paying you what you’re worth.
When you’re passionate about your job it feels as though you could happily work for free, but let’s face it, working for free can’t pay the bills. Neither does working for a discount.
Discounting your services makes sense from a marketing and sales perspective when you need to attract new business, but you may wind up driving yourself out of business if you continually give away your services or undercut your competitors.
The article has seven really great points, but I’d like to highlight my tope 3 of the bunch:
1. You devalue your products or services.
Because I want to see everyone win, I struggle with this constantly. Yet, I now realize that if I continuously give discounts to all of my clients, I’m essentially devaluing my time and services. Time isn’t infinite and I have enough responsibilities as it is.
I learned about the loss leader strategy in college: selling a product or service below market cost in order to stimulate the sale of the more profitable products or services offered. It’s what Apple does with iTunes: to stimulate the sale of iPods, iPhones and MacBooks. If you choose to offer discounts, you must have other products that will make up the difference. Otherwise, what’s the point?
2. You forfeit future bargaining power.
I understand the need for discounting when you’re building your portfolio, but your rate should reflect your skill level and track record once you’re established. If you discount too much, you will forfeit the ability to demand the rates you deserve, hurting yourself in the long run.
3. You really don’t want or need bargain-hunter clients.
If I charge someone $150 to design a website that’s really worth $1500, I will get more clients than I can handle. However, those clients will expect to also receive a $1500 site for that same low price of $150.
I’d rather have 3 clients paying $500 each instead of 10 clients paying $150. While my output is significantly less, I will have much more time to produce quality work while maintaining my sanity.
