Typical entrepreneur’s desk (Photo credit: fensterbme)
It’s happened once again, folks.
A client has asked for a discount on her very first project — claiming that she’ll make it up by giving me more work in the future.
Oh, and this person asked for a discount after I’d finished editing her work and bringing it in under the amount we’d first agreed upon.
Should I give a discount to my clients?
What’s wrong with discounts?
- The client wants to try YOU out. There is no benefit to you.
- There is no guarantee of future work and, even if there was, why shouldn’t you make your usual rate? If a client wants your work, shouldn’t you be compensated fairly for your time? Again, no benefit to you.
- Discounts mean you will make less than your fee. Now, that’s OK to offer a client who’s been with you for a while.
There’s an interesting wrinkle to this story.
When I first bid the project, I bid a flat rate. The client actually sounded relieved that it would only cost that much.
When the client came back with some additional requests, having approved what I’d video edited, I gave her a price on each one, explaining exactly how long it would take me and what my hourly rate is. I charged her in 15-minute increments for this new work. I believed mine to be a thoughtful and money-saving response. Which also took me at least half an hour (unbillable) to write out for her.
Discounts: Perception is everything
Apparently some clients, especially ones who live in a small town, go berserk when they become aware of a fair hourly rate. They expect everyone around them to make $25 to $50 per hour, not $100 and over — even though living in a small town is usually no less expensive than living in a major metropolitan city except for, perhaps, the expenses of gas and car wear and tear.
So, yes, this woman really reacted strongly to my hourly rate, $100. Even though it had saved her money so far.
Even though I spend most of my time in a small town, the government, my hardware and software vendors, and utility companies really don’t care where I live when they charge me for products and services. I pay the same as any big- or small-city business person for health insurance, self-employment tax, computer and software expenses (roughly $3,000 per year), office supplies, office overhead, continuing education, and many other items and hours that I can’t bill directly to anyone.
So, I wrote back right away, explaining that I couldn’t give a discount at this time. Did she still want me to proceed, and on which parts of the project?
I haven’t heard from her, and it’s now been more than a week. I consider this more than rude. It took more than a month to hear from her, and I wasn’t able to help her out at that time.
So, yes, I did get to try out this client before engaging in a larger project. Thank goodness.
I’ll leave you with this thought. Would you ask your plumber, lawn care service, or Lowe’s for a discount that wasn’t offered initially? So why do so many people believe it’s OK to ask someone with a computer and mad skills for a discount?
Somewhere, deep down, these folks believe that they, their nephew, or neighbor’s cousin’s girlfriend can do the same job you can — or at least one that’s very close. Some callers even say as much. And to that I say, then why did you call me?
The process of educating people never ends, but I may need to leave it to the locals and return to the Big City.
