Hi Friend,
Raise your hand if this sounds familiar:
You’re in the middle of a great Zoom call with a potential client. You’ve clicked nicely and seem to be in alignment on the project. You’re starting to think the client is ready to work with you when suddenly they say those two sentences every freelancer hates to hear:
“We don’t have the budget to meet your quote. Would you be willing to do the work at a discounted rate for this project with the promise that we’ll work with you in the future at your regular rate?”
You become paralyzed, as though a wizard has just cast a spell on you. Your brain tells your mouth to continue smiling, because what else are you supposed to do?
Before you know it, you’re saying yes. After all, they’re promising to work with you in the future. And all it will take is this one project to prove to them you’re worth the money. Once you’ve wowed them with your first project, they’ll be thrilled to pay you what you’re worth next time.
This is one of the awful and uncomfortable positions freelancers are put in all too frequently. And though it’s tempting to say yes, there are many, many reasons to stand firm on your price.
The first project requires a lot of extra work
One of the reasons freelancers love long-term clients is it gives us a chance to get to know the client. With time comes a greater understanding of the client’s voice, their brand and their needs. We get familiar with their communication style and sometimes even develop a shorthand with our longest clients. We become quicker and more efficient at helping them as we get to know them better.
The first project is filled with a ton of extra work where you lay the groundwork for future projects. You have more meetings to build relationships and get clear on the expectations. You spend time creating processes and workflows, and sending documents and clarification back and forth. You’re doing more research on them and their product or service.
The hardest work is during that first project when you and the client are getting to know each other. Taking a pay cut during that project not only means you’re getting paid less for your work, but you’re getting paid less for doing more work.
You get too comfortable with negotiating your price down
One of the hardest habits to form is standing firm on your price. This might be a bit of imposter syndrome sneaking in (“Who am I to charge anyone that price for my work?”). It might be discomfort talking about money, it might be people pleasing, or it might come from a scarcity mindset (“If I don’t take this work no other project will ever come my way again”).
Whatever the reason, many freelancers (especially new ones) find it difficult to stick to their price in the face of someone asking for a discount. Giving into that temptation and allowing a discount only makes you more comfortable doing so and makes it more difficult for you to confidently stick to your price.
You don’t ever want to get in a position where you feel comfortable saying yes when clients ask you for a discount. If you want to feel comfortable saying no to clients, this scenario is a great time to do it.
You undervalue your work
The value of freelancing isn’t just in the time it takes you to write or edit a document. It’s in the time you spend getting to know the client and their needs; the research you do to understand the industry; the expertise you have in an industry or niche.
There’s a lot more that goes into your work than the words on the page. When you offer a new client discount, you not only undervalue yourself and your skills, you teach your clients to undervalue your work.
Just because they’ve set a certain budget doesn’t mean they can’t afford you
Often, the companies asking for a discount can afford you, they’re just using this as a negotiating tactic, because why not? We’re told time and again that there’s no harm in asking for something, and the worst you’ll say to them is no, so why wouldn’t they ask for a discount? Chances are they have the money, they just don’t want to use it on this.
There’s no guarantee they’ll come back and pay your full price
Even if they pinky swear on it (cross their heart with a cherry on top!), there’s no guarantee a client will come back after that first project. Some situations may be out of their control: they’ve deprioritized content, someone new is in charge of marketing and they have their preferred freelancers they work with, or they simply don’t need anything else for the next year.
Whether their intentions are good or questionable, giving them a discount on their first project is no guarantee they’ll come back to you with their next projects.
Even if they do come back, now that they’ve paid a lower price for your work they’re likely to want to negotiate again because they’re used to paying less. You’ve already set a precedent of lowering your price when they ask you to, so why wouldn’t they try again? There’s no downside to it for them because they lose nothing by asking.
Your work isn’t scalable
Because you can only physically work on one document at a time (unless you’ve figured out a way to grow multiple heads that operate independently of each other) you can only work on so many documents in one day. Sure, that number may go up if you work longer hours or become an expert in a niche, but there’s still a maximum amount of freelance work you can complete in a day (unless you get into subcontracting, which is another thing entirely).
Because you can’t scale your work, the only way to increase your income or reach your goals is to ensure you’re paid well for the work you do. That means not giving discounts on your work.
Your job isn’t to subsidize them
When you’re asked to do work on a discount, you’re being asked to subsidize their company. You’re taking a loss on your income because they don’t want to pay you what you’re asking for. You’re not an investor in their company, nor are you required to help them financially so they can grow their business.
Your job is to earn enough money to ensure your business is sustainable, but by giving a new client discount you’re effectively taking a pay cut with no guarantee of future returns.
In this week’s insider tips, I’ll share some tips on dealing with requests for a “new client” discount.
Here’s to your ongoing business success,
Heidi