You’ve just had a great phone conversation with a potential client. You’ve typed up a proposal that summarizes everything that the two of you talked about and you’re anxiously awaiting the results–but things look really good. You feel like the proposal is just a formality.
Finally, it arrives–the answer to your proposal that you’ve been waiting for. You’re sure you’re about to add another client, and then you read the reply.
The answer looks something like this:
“We really love your work and would love to have on this project. But since we’d like to do a lot of business with you, I’d like to see your wholesale rate. What do you charge for clients who do frequent business with you?”
What went wrong? Should you cave on your prices, or do you say “no” to this potential client? In this post, we’ll examine the common freelancing request for discounted freelance rates. I’ll provide eight reasons why you shouldn’t discount your freelancing rates and four reasons why you might want to.
8 Reasons Why You Shouldn’t Offer a Discount
Are you thinking about discounting your freelancing rate? Read this first:
- Prospects who claim that they will give you a lot of business often don’t. The promise of future work is a well-known “carrot” in the freelancing world that often never materializes. The client takes your work at the lower rate, and then changes his or her mind about offering more work in the future. This is often a bigger problem when there is no contract.
- Discounting rates sets a bad precedent with the client. If you don’t stand firm on your rate, the client will expect that everything you offer can be changed. If you tell the client you need a week to complete the project, they’re likely to think that’s just a guideline and ask for it four days. You may end up haggling over every project.
- You’re not a commodity. Your work is created individually for each and every client. No matter how much work the client gives you, there are still only 24 hours in the day. You’re not a factory that mass-produces freelance results–you don’t have a bunch of completed projects sitting in a back room that you can just ship out when a client asks for them.
- Clients who request discounts are often difficult to deal with in other ways. This is an odd fact, but in my experience it’s proven to be true. You’d think that a client who asks you to work for less than your going rate would be more likely to cut you some slack on your projects, but often they are the most demanding and the most critical clients you will have.
- You may start to resent the client for paying less than you feel you are worth. It never fails. If you agree to a contract at a reduced rate, another prospect will materialize who is willing to pay your full rate. But now your time is committed to the low paying client. You either have to over schedule yourself or turn down the better paying client–not a good choice.
- The client may view you as less professional. The client may think of your work as substandard if you charge less than other professionals in your field. This happens even when your work is top-notch. The more someone pays for advice or a project, the more they tend to value it. Don’t devalue your worth by charging less than you are worth.
- Accepting a lower rate may cause financial problems for you. Let’s face it, you’re trying to earn a living. When you charge a lower rate, you earn less. When you earn less, you have less to spend on your living expenses and less to put aside for emergencies. And you never know when an extra expense might occur. Don’t let yourself be sucked into financial problems because you don’t charge enough.
- Your rates are probably already too low. Many freelancers, even those with experience, charge far less than they are worth. Sometimes this is because the freelancer really doesn’t know what to charge. Sometimes it happens because the freelancer lacks confidence. Other times, the freelancer undercharges for a project because they underestimate the amount of time and effort the project will require.
If you’re tempted to offer a client a discount, look at the preceding list and think again. Still, there might be some instances when you really do want to discount your freelancing rate.
4 Reasons Why You Might Want to Offer a Discount
We’ve presented some pretty compelling reasons for sticking to your freelancing rate, but there are always exceptions. Here are a few:
- The project is something you really want to do. You’ve never done anything like this and you just know that the project would like great on your portfolio.
- The client is one you really want to work with. Adding this prestigious company to your portfolio will enhance your reputation and attract other clients.
- You don’t have any work at all. You’re desperate for work and you don’t have any income coming in. (Although, you also need to adjust your marketing strategy.)
- You’ve already done a lot of work for this client. You know this is a good client who pays well and on time. You’re willing to help them out on this project.
Did I miss any reasons? Share your reasons in the comments.
You’ll find another helplful post on freelance rates on FreelanceM.ag, 7 Pricing Resources to Help You Set Your Freelancing Rate.
Image by ericskiff/